August 15, 2012

August 15, 2012
What's Wrong With Air Travel?

Welcome to another day in my life. Today is Wednesday and we have almost made it through the middle of another work week. I hope you are having a safe and great week so far. It is another busy week for Dab the AIDS Bear and me.

With the bear doing over 150 events a year, it is a necessary evil to use airplanes for most of the travel. While some of the trips on some of the airlines go well, there are many trips where there are problems of one kind or another.

What is your biggest airline problem?

That is a question I ask almost every day, and it is coincidentally one that a new Transportation Department panel is trying to answer.

The Advisory Committee for Aviation Consumer Protection, created by the latest Federal Aviation Administration reauthorization bill and established in May, is charged with reviewing current aviation consumer protection programs and recommending improvements, if needed. It has held one public meeting so far, with another scheduled for early August, so it still has a long way to go before determining where passengers hurt the most.

Charlie Leocha, is the consumer representative on the committee. Leocha maintains that the single biggest fixable problem is price transparency, or knowing how much your ticket will cost.

During presentations to the committee, other advocates for air travelers have made compelling cases for different causes, including making it easier to sue airlines and adopting tougher regulations concerning safety and tarmac delays. If I would made my own pitch, I would have argued that air travelers are most frustrated by the impression that airlines seem to be able to make up their own rules with little oversight.

So who is right?

To find out, I looked outside the Beltway, asking consumer advocates and service experts to name their top airline problem. If anyone knows where air travelers are hurting, they should.

Edward Hasbrouck, a San Francisco based consumer advocate and author of "The Practical Nomad: How to Travel Around the World," says that air travelers want to know what they are buying. Airlines could do a far better job of disclosing so called code share agreements and revealing what is included in the price of a ticket as well as the ticket terms. Air carriers are not currently required to reveal any of those details on your ticket. "I think those are the big issues," he says.

Mitch Lipka, who writes a consumer advocacy column for the Boston Globe, says that passengers are frustrated with new airline fees and charges that give the false impression that they are spending less for their flights when they are actually spending more.

Most recently, news that some airlines are reserving more aisle and window seats for passengers willing to pay a premium prompted angry complaints that families with small children would not be able to sit together without paying extra. "That seems to have irked a lot of people," Lipka says.

Richard Laermer, a marketing expert and commentator for the public radio show "Marketplace," says that air travelers are weary of being hammered by fees. "Fees for legroom, fees for seat reservations, fees for being first on board," he says. "Worse, instead of passengers knowing what the price of a ticket covers, they are growing more confused as airlines come up with new surcharges." Laermer wants to see the end of "us vs. them."

So, that is three votes for price transparency.

Look a little closer and you will understand why. These new fees and surcharges affect almost every passenger's wallet in a direct, measurable way. A decade ago, the price of an airline ticket included checking two bags, confirming a seat, paying with a credit card. If you wanted to check an overweight bag or change your ticket, you paid a little more. Today, some tickets cover none of those things; they are, to use a term popular with the airlines, "unbundled."

It is not the unbundling itself that is problematic, but the way it has been executed. With only one or two exceptions, airlines have quietly removed integral components of the ticket from the base price and then buried the disclosure on their website. That has allowed them to continue quoting the low fares that passengers want. It has also let them profit from the public's assumption that those fares continue to be more or less inclusive, which they are not.

The money that airlines make from these extra fees is referred to as "ancillary" revenue, and the airline industry is awash in it today. In two years, worldwide ancillary airline revenue jumped 66%, to $22.6 billion in 2011, according to a recent survey by IdeaWorks, an airline consulting company that specializes in ancillary revenue. The industry leader, United Airlines, collected $5.2 billion in ancillary fees last year. But United is a big airline. The real ancillary revenue leaders are the so called "low fare" carriers, which pile on the extras. Spirit Airlines, for example, reaps about 33% of its revenue from fees, making it the world's most aggressive air carrier when it comes to extras, IdeaWorks says.

Air travelers have plenty of problems. But this one -- the issue of ticket price -- keeps bubbling up in discussions.

The fix seems pretty easy: Require airlines to release all their data regarding fares and optional extras and to publish those fees everywhere they sell their tickets. At the moment, they are not required to do so; current regulations say only that their fares must include mandatory fees and taxes. Obviously, it is not enough. The optional fees are the ones that surprise consumers and hurt their wallets.

The advisory committee should recommend that the Transportation Department adopt a rule requiring airlines to put every component of their fares on the table, for every passenger to see, regardless of how and where they are buying a ticket. That would quickly close a shameful chapter in the airline industry's history, in which it deceived passengers into paying more for their tickets and earned billions based on its subterfuge.

No government should allow a business to lie to its customers, even if that business is a beloved airline.

Hope you have a beary safe and great Wednesday!

Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab