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Tough Suggestion For Airlines:
Think About a Rule 75 System.
It's That Or DOT Will Make A Mess of Things.
Summary: The airline industry is under fire for a range of supposed consumer outrages. One is the inability to rebook passengers when a flight cancels - particularly at ULCC day-of-week operations. The result is stranded customers, and that needs to be addressed by the industry, or Buttigieg will do it for them.
The Secretary of Transportation has just come out, deputizing state attorneys-general to participate in the DOT’s crackdown on consumer outrages on the part of the airline industry.
He literally stated that airlines are routinely abusing customers – not occasionally, but systematically.
He mentioned instances of airlines cancelling flights and forcing consumers to pay more for alternative transportation, including making them wait days for another flight. The accusations were clear: this is being inflicted daily by nasty airlines, and DOT needs the help of the state AGs to take action.
Innuendo And Half Truths. Or Worse. This is totally in line with the famous hootenanny airline industry press conference he put on with Biden last year, which was peppered with inuendo and actual lies about how airlines were treating passengers, such as cancelling flights and then charging affected passengers for replacement options.
Political game-playing and outright misinformation are cornerstones of Buttigieg’s approach. But this is the reality facing airlines. A reality that they in fact helped create. Not intentionally, but the fact remains that there are air travel failures, real and imagined.
It’s time airlines took a harder look at situations that feed into these misconceptions.
But let’s move on to Buttigieg’s latest stunt. And that is the allegation that when a flight cancels, consumers are often charged more for an alternative flight, and it might be days away.
Actually, this is one area where the airline industry has left an opportunity for a soapbox stunt wide enough for Buttigieg to taxi a 777 through. Technically what he outlined does happen. Particularly within the ULCC day-of-week scheduling model.
‘Course he assumes that in the event of a cancellation there is always another flight available, like, conveniently for the aggrieved consumer. Maybe at DTW or DFW or LGA. But not at LAN, or SPI or dozens of other small airports. But reality and facts are not in play here. Grandstanding is the name of the game.
A System With Little Resilience for Service Problems. But there is often the issue of no capacity for a day or two, or no flight at all for a day or two on the affected airline – particularly day-of-week ULCCs. The airplane breaks, and, yup, there are no alternatives, as the carrier’s next flight is on Tuesday, and by golly, it’s booked full.
(We should toss in the fact that some of the customer service at ULCCs is farmed out to entities where staff have the subtle touch of a Visigoth. And that gets press. Heck, the one event where an agent in FLL used to F word to a boarding customer has gotten days and days of coverage.)
So when a flight cancels, in addition to having to deal sometimes with staff that would make the DMV seem friendly, the consumer has the option of trying to unilaterally book on another carrier – usually at a huge cost compared to whatever refund the ULCC will offer – or stick around hoping to get out three days later. So, there is dissatisfaction.
But it’s not a sinister plot as the DOT implies. It’s just the reality of the ULCC model that delivers lower costs and lower fares. And along with it, the increased challenges in off-schedule operations, whether at GRI or at LAX.
This is the area where Buttigieg has the advantage.
There Once Was A Rule. Today, when Spirit or Frontier or Allegiant must cancel a flight, network carriers aren’t an option the ULCC can shift the passengers onto. Interline ticket acceptance isn’t in play.
But for those who remember ancient times – i.e., pre-deregulation – the tariff rules airlines operated under included what was originally called “Rule 75” and later “Rule 240.” When United cancelled or had an operational problem, passengers could be re-booked on another carrier under this rule, the ticket was shifted/endorsed to the receiving airline without the passenger being charged additional.
The customer got home. And for the airlines involved, there was the interline billing. Remember, back then a giant percentage of passenger journeys involved connecting between airlines, with joint fares agreed upon, and billed accordingly between them.
Under Rule 240, the accepting carrier then billed the original airline usually at the full “Y” published local fare, which sometimes approximated an amount just short of the German War Debt.
Everybody was happy. The customer got on an alternative flight without additional cost, the carrier with the problem got the passenger out, and the receiving airline made a bundle.
But with deregulation, all these fare rules, interline fares, points-beyond ticketing, agreed prorates and other inter-carrier voodoo went 86.
However, if such a system could be re-established it would toss a very wet blanket on the doggerel being churned out by Buttigieg and his consumerist rooting section. Now that everything is electronic, it might be easier than it looks.
To be clear, the day-of-week model delivers air service that would not be possible otherwise. And there is no hard reason that the ULCC be required to take the financial hit of shifting a $79 passenger to another airline that might bill the ticket back at $300 or more. Except for the hard reason that it fixes a huge problem and can deter unnecessary regulation.
Indeed, as Hyman Roth told us in the Godfather, this is the business that ULCCs have chosen, and that business comes with situational realities.This is one of them.
The model is incredibly vulnerable to customer dissatisfaction in the event of off-schedule operations.
Plus, unless this is tackled, plan on Buttigieg and friends continuing this jihad.
They’ve already started. It won’t be good for the airline industry or for the flying public.
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