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RITA-2011-0001 - Reporting Ancillary Airline Passenger Revenues


 

House Aviation Subcommitee Hearing on Airline Fees - July 14, 2010

OST-2016-0208 - Refunding Baggage Fees for Delayed Checked Bags
OST-2016-0204 - Exploring Industry Practices on Distribution and Display of Airline Fare, Schedule and Availability Information
OST-2017-0007 - Transparency of Airline Ancillary Service Fees - Supplemental Notice of Proposed Rulemaking


Reporting Ancillary Airline Passenger Revenues

RITA 2011-0001

Issued July 7, 2011 | On File at Federal Register July 15, 2011

Notice of Proposed Rulemaking - Bookmarked

As Published in the Federal Register - July 15, 2011

The US Department of Transportation is proposing to collect revenue information in a more detailed manner regarding airline imposed fees from those air carriers meeting the definition of a large certificated air carrier. Many air carriers have adopted a la carte pricing with separate fees for such things as checked baggage, carry-on baggage, meals, on-board entertainment, internet connections, pillows, blankets, advance or upgraded seating, telephone reservations, early boarding, canceled or changed reservations, transportation of unaccompanied minors, pet transportation, third-party services such as hotel rooms, car rentals, and pick-up and delivery services, et cetera. The Department wants to make airline pricing more transparent to consumers and airline analysts. This action is in response to a Departmental initiative and responds to recommendations of the Government Accountability Office. Also, the Department is proposing to change the way it computes mishandled baggage rates from mishandled baggage reports per unit of domestic enplanements to mishandled bags per unit of checked bags. Fees for checked baggage have changed consumer behavior regarding the number of bags they check, skewing mishandled baggage rates. Finally, the Department is proposing to fill a data gap by collecting separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities.

By: Anne Suissa


September 13, 2011

Comments of the Air Transport Association of America and the Regional Airline Association

This rulemaking proceeding should be withdrawn. Congress deregulated the domestic operations of airlines over three decades ago. The Department's proposed reporting requirements would far exceed what businesses in other industries must provide to the federal government. Burdening the US airline industry with excessive regulatory requirements would inhibit the industry's ability to generate jobs, which is an Administration priority. Moreover, the NPRM does not explain how its proposed reporting requirements would programmatically aid the Department or better inform airline passengers. Lacking these justifications, the NPRM fails to follow the Administration's policy of avoiding unnecessary regulations.

Counsel: James Casey, 202-626-4000 for ATA / Roger Cohen, 202-637-1170 for RAA

 


September 13, 2011

Comments of Airports Council International - North America

With respect to proposed changes to baggage reporting requirements, ACI-NA supports the Department’s proposal and believes the proposed changes will provide more accurate information for air travelers and consumers. Since the airlines first implemented fees for checked baggage, the number of checked bags and subsequently mishandled baggage reports have decreased substantially. While the airlines already report the number of mishandled bags relative to the number of passengers flown, more passengers are choosing not to check bags to avoid fees, decreasing the number of checked bags overall. Reporting all checked bags would be a more useful comparison by allowing air travelers to compare the number of lost or damaged bags relative to the number of bags handled by the airlines.

Counsel: ACI-NA, Greg Principato, 202-293-8500


September 13, 2011

Comments of Allegiant Air

The NPRM, like all pending federal regulatory proposals, should be evaluated against the standard articulated by President Obama last week. It is readily apparent the NPRM’s proposal for carriers to break out and report to the Department some two dozen categories of ancillary revenue has no bearing whatsoever on public health, safety or security. Indeed the NPRM identifies no public benefit that would result from the submission of such data, referring instead to the supposed needs of “policymakers and regulators.” Even if such needs exist – as opposed to desires or wish-lists – they clearly are unrelated to public health, safety and security.

The proposed expansion of mishandled baggage reporting fares little better under the President’s analytical touchstone. The NPRM opines that revised reporting “would better inform passengers of their chances to retrieve their checked baggage and belongings in an acceptable and timely manner” – a vague concept at best – and that such reporting would “create an added incentive for air carriers to treat [wheelchairs and scooters] with greater care” – as if the Department’s strict-liability regulation at 14 CFR 382.131 and its vigorous enforcement of the Air Carrier Access Act were not incentive enough. In any event, here again, the supposed “benefits” are unrelated to public health, safety and security. And, the NPRM’s unsupported speculation about these “benefits” is legally insufficient to underpin a new rule in any event.

Counsel: Garofalo Goerlich, Aaron Goerlich, 202-776-3974


September 23, 2011

Joint Reply of American Airlines, Delta Air Lines, United Air Lines, and US Airways

There is unanimity among all airline commenters that the Department’s proposal to expand the reporting categories for ancillary revenue is unduly burdensome, complex and unjustified. Legacy carriers, large LCCs, small LCCs and regional carriers alike oppose this portion of the NPRM. Form 41 reports already provide extensive information on sources of carrier revenues, and, as admitted in the NPRM, there has been no attempt to quantify the benefits of additional reporting categories against the proposed regulation’s very substantial costs.

Imposing a major new regulatory burden on a distressed industry in a struggling economy is contrary to the Obama Administration’s jobs initiative. As President Obama has stated, “We should have no more regulation than the health, safety and security of the American people require. Every rule should meet that common-sense test.” The unnecessary, costly and unwieldy proposal here does not meet that test. At a time when carriers are reducing service, decreasing staff, and deferring capital improvements to conserve cash, it would be detrimental to airline employers, airline employees, the traveling public, and the U.S. economy to impose an expensive new regulatory mandate that is unnecessary and unsupported by any quantifiable public benefits.

Counsel: American, Carl Nelson, 202-496-5647 / Delta, Alexander Van der Bellen, 202-842-4184 / United, Thomas Bowling, 312-997-8068 / US Airways, Howard Kass, 202-326-5153


September 6, 2011

Comments of the American Aviation Institute

We respectfully request that DOT either withdraw the NPRM, or suspend further consideration until it has prepared and issued a formal Preliminary Regulatory Impact Analysis to allow industry and consumer feedback on costs, benefits and alternatives. The PRIA should, in compliance with applicable Executive Orders, establish the economic justification for the new rules with the required analysis components. The public is entitled to an opportunity to comment on DOT’s economic justification. Indeed, relevant federal standards and guidelines mandate such an open exchange of information.

The proposed rules are overly burdensome to the industry and the level of detail proposed is not needed by DOT or the public. We view changes to baggage reporting metrics and collection of scooter and wheelchair data as unnecessary, confusing and likely to drive significant compliance costs.

For the proposed Schedule P-9 and P-9.1 to collect ancillary revenue data from airlines, we recommend that DOT formalize the eight ancillary revenue categories it has already defined:

  • Baggage Fees (currently account 3906.2 on Schedule P-1.2)
  • Seating Assignment Fees, Scheduled Service (3901)
  • Seating Assignment Fees, Non-Scheduled Service (3907.1)
  • Rebooking and Cancellation Fees (3919.1)
  • On-board sales of food, drink, blankets, pillows, and entertainment (4898)
  • Transport of pets as cargo/belly freight (3919.2)
  • Transport of pets in cabin, scheduled service (3901)
  • Transport of pets in cabin, non-scheduled service (3907.1)

This approach will minimize compliance costs. DOT has not justified more detailed reporting than the broad categories above it already uses. We urge DOT to be reasonable and mindful of airline compliance cost, since each regulatory burden that the agency imposes directly translates to higher costs. These higher costs in turn result in higher fares for the American consumer.

Counsel: Aviation Institute, Darryl Jenkins


September 8, 2011

Comments of The American Society of Travel Agents

ASTA supports the proposed change in the matrix for mishandled baggage so as to measure it against a unit of checked bags rather than against a unit based on the number of mishandled baggage reports, for the reasons stated by the Department.

Similarly, the rules should be expanded, as proposed, regarding data about all wheelchairs and scooters, as well as other mobility devices. The reporting changes should, to the extent possible, be done all at once so that the airlines have to adapt their systems to one set of changes rather than a moving series of changes.

Counsel: ASTA, Paul Ruden, 703-739-6854


September 13, 2011

Comments of The Association of Retail Travel Agents

ARTA is also concerned that Department may be seeking to collect ancillary fee data to create an economic case for taxing these non-air transportation options. As the IRS has previously determined, these options are not air transportation, nor a mandatory condition for air transportation. Any attempt by the Department to tax these options will only cause consumers to suffer unnecessary increases to overall travel costs and additional work for travel agents in taxing, collecting, exchanging and refunding these options or individual components of these options.

Moreover, the data dissemination and distribution of these fees must not be used as an attempt to force airlines to provide such fee data to global distributions systems. ARTA is concerned that any such mandate would create substantial economic harm to travel agents by interfering with the normal negotiation process between airlines and GDSs, the lack of which, usurped by Government intervention, might give rise to costs imposed on travel agents to pay for such data which might otherwise have been provided free of charge to travel agents through the course of airline/GDS negotiations.

ARTA requests that the Department delay any action to require additional ancillary fee reporting by air carriers until such time as a complete set of facts, including clear economic and consumer benefits, are provided to enable proper and responsive public commentary.

By: ARTA, Bruce Bishins


September 13, 2011

Comments from Consumer Action, the Consumer Federation of America, Consumers Union, and the National Consumers League

We believe there should be complete pricing transparency for all airline bookings, inclusive of all fees, through all booking channels and ticket sellers. This is consistent with Department actions in recent decades to ensure unbiased and accurate pricing displays in global distribution systems and other booking channels. And such protections are particularly critical for airline passengers since the airline industry has long enjoyed federal preemption, which severely limits consumers from redressing complaints through the usual state and local venues.

However, we additionally note that with this influx of checked baggage fees, the industry also has seen a dramatic increase in baggage and other personal items checked at the gate. We believe the Department also should ensure that airlines include such mishandled baggage in their monthly reporting.

As the Department rightfully considers methodologies to ensure greater consumer transparency of airline pricing and fees, all of our organizations also urge the Department to ensure that all reporting and analysis of airline performance data be conducted in a consistent and sensible fashion.

By: Consumers Union


September 13, 2011

Comments of Consumer Travel Alliance

What data rules will apply to a flight with a DL, US, UA or AA designator that originates overseas on a foreign carrier? The questions are legion and there is more than only data collection involved here. Other customer service issues will be affected by this ruling such as what airline is responsible for the customer when it comes to baggage sizes and rules that differ from airline to airline and from country to country and that are not uniformly managed or enforced from airport to airport. Perhaps, defining whose balance sheet receives the fee may lead to a definition of which alliance or codeshare airline has responsibility for the customer in terms of their contracts of carriage and DOT regulations.

DOT needs to begin to assess the impact of their antitrust immunity rulings and develop rules that can provide reporting based on some kind of common criteria. This becomes more important within the domestic market when more than half of domestic departures are on “regional” carriers under legacy carrier flight numbers and internationally the creation of joint ventures have muddied the waters.

Domestic regional airlines often fly for themselves as well as for several other legacy carriers, which makes the collection of meaningful data even more difficult. Having regional airlines report separately from the airline under whose colors they fly is misleading and deceptive. DOT needs to spend more time examining the ramifications and consequences of these codesharing issues.

By: CTA, Cahrles Leocha


September 14, 2011

Comments of Donald Pevsner

  1. Categorizing ancillary fees is an academic exercise that may facilitate future Federal taxation on them. However, limiting DOT action to this one pertinent issue does the consumer no good whatsoever.
  2. Prior to deregulation, there were very clear DOT precedents that provided that all airlines in air transportation as well as foreign air transportation provide reasonable free baggage allowances. Today, virtually all airlines except Southwest and jetBlue are charging $25 for the first (often-essential) checked bag on domestic routes. This is an outrage that must be curtailed, using any relevant statute or other basis for such action, immediately.
  3. Similarly, when change penalties were first introduced by the airlines, they were fairly low and fairly reasonable. Today, such penalties are usually $150 on domestic routes and $250 on international routes. This writer is about to see a $156 domestic ticket become worth a $6 future credit as a result of this totally-unjustified price-gouging. Again, swift regulatory relief is urgently required to stop the gross mulcting of the consumer.



September 21, 2011

Comments of FlyersRights.org

The hidden fees are a deceptive way for airlines to give passengers the illusion of a lower fare, hide the truth of the total cost of a flight and avoid paying the 7.5 percent excise tax that feeds the vital Airport and Airway Trust Fund. As documented in a study sponsored by the Federal Aviation Administration Air Traffic Organization Strategy and Performance Business Unit, through its National Center of Excellence for Aviation Operations Research, overscheduling and infrastructure inadequacies are the two greatest contributors to air travel delays. Depletion of the Airport and Airway Trust Fund is materially accelerated by the airline practice of migrating more and more of a ticket’s actual cost to the category of “fees.”

By: FlyersRights.org, Kate Hanni


September 13, 2011

Comments of Paralyzed Veterans of America

PVA strongly supports the proposed requirement that airlines document incidents of mishandled mobility devices. While this is proposed as part of an ancillary revenue regulation and tied to mishandled baggage claims, we urge the Department to consider expanding this requirement or relocating it in its ACAA regulations. Checking of wheelchairs or other mobility devices is not a source of revenue for airlines, and reporting these problems under this provision is unlikely to give an accurate accounting of the problems.

PVA strongly supports the Department’s plans "to publish the data it receives from the carriers which would increase public awareness of the issue, provide passengers with disabilities a means by which to compare the overall mishandled wheelchair/scooter rates by carrier and create an added incentive for air carriers to treat these mobility devises with greater care." PVA occasionally receives questions as to which is the best airline for a wheelchair user to fly; this data would provide an objective basis for comparison.

Counsel: Bob Herman, 202-416-7699


September 13, 2011

Comments of Southwest Airlines

To more accurately inform the public, DOT should collect and publish mishandled baggage statistics based on the number of checked bags carried by each airline. This ratio will provide meaningful information to the traveling public on each individual airline’s performance, in the absolute as well as in relation to other carriers. This change is long overdue and will impose no greater burden on the industry than current reporting requirements. It should therefore be adopted without delay.

In implementing the proposed changes to mishandled baggage reporting, it is important for DOT to use a straight-forward metric in which all passengers’ checked bags have equal value (i.e., one checked bag equals one checked bag). Southwest therefore disagrees with ATA’s suggestion that checked baggage, if it is adopted as the MBR denominator, should be counted on an —enplaned? basis rather than on an —O&D? basis. Under ATA’s proposed formula, a single bag would be counted as two bags if it makes a connection, on the theory that it is more difficult for an airline to connect a bag than to fly it nonstop. However, this approach overlooks the fact that a passenger is equally inconvenienced by a lost or delayed bag regardless of its routing or the number of times it changes planes.

Counsel: Southwest, Robert Kneisley, 202-263-6284


September 13, 2011

Comments of Spirit Airlines

Spirit notes that the Department does not quantify any of the alleged benefits. There is no established link between the increased use of ancillary fees and the decline in revenues flowing to the Airport and Airway Trust Fund. The decline in traffic following 9/11, the burdensome security screening process, the poor economy and higher fares compelled by rising fuel costs are much more likely the causes of the revenue decline. Indeed, to the extent Spirit can lower fares and let customers select which ancillary services they need, it is likely stimulating the market and generating more trust fund revenue.

Counsel: Kirstein & Young, Joanne Young, 202-331-3348


September 13, 2011

Comments of Virgin America

This proposal, rather than being "consistent with" Executive Orders 12866 (Regulatory Planning and Review (Sep. 30, 1993)) and 13563 (Improving Regulation and Regulatory Review (Feb. 4, 2009)), fails in several important respects to meet the important regulatory requirements contained in these Executive Orders, particularly the preparation of a searching and thoughtful cost-benefit analysis to support what is an expensive and burdensome recordkeeping proposal. Moreover, in this the 33rd year after passage of the Airline Deregulation Act of 1978, the NPRM is precisely the type of public utility-type regulation that the Congress intended to eliminate and replace with a system that relies upon competition and market forces to determine air transportation services in the United States. Finally, much of the ancillary revenue information is already captured by existing DOT reports (albeit not at the remarkable granular levels that would be required by this proposal), and the Department has not provided any, much less sufficient, justification for requiring the airlines to separately collect and report such extensive and detailed revenue information, particularly when domestic fares and fees charged by airlines have been largely deregulated for decades.

Counsel: Virgin and Zuckert Scoutt, John Gillick, 202-973-7939


 

Issued April 23, 2012 | On File at Federal Register April 26, 2012

Notice of Public Meeting

As Published in Federal Register April 27, 2012

This document announces a public meeting on a Notice of Proposed Rulemaking issued on July 15, 2011. The NPRM proposed changes regarding reporting of airline ancillary passenger revenues, computation of mishandled baggage rates, and collection of separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities. During the public meeting, DOT staff will provide a summary of the proposals in the NPRM and seek input on costs and benefits associated with the implementation of the proposals.

By: Pat Hu

 

May 17, 2012

Transcript of Public Meeting

The public meeting convened in the Oklahoma City Room of the US Department of Transportation offices at 1200 New Jersey Avenue, Southeast, at 9:30 a.m., Robert Monniere, Moderator, presiding.

Members of Public in Attendence

 


 

September 4, 2012

Statement of Delta Air Lines

  • Ancillary Services and Fees are a Positive Development in the Airline Industry
  • Airlines Have No Incentive to "Hide" or "Withhold" Ancillary Services or Fees From Consumers
  • Market Forces, Not Government Mandates, Are the Best Way to Insure That Ancillary Services and Fee Information Reach Consumers Using the GDS/Travel Agent Channel
  • Existing DOT Rules Assure Ample Disclosure of Ancillary Services and Fees
  • Ancillary Services and Fees Are Not Suitable for "Apples-to-Apples" Comparison Shopping on GDSs
  • Many Ancillary Services and Fees Are Not Transactions That Occur at the Time of Booking
  • Any Proposal to Require Airlines to Provide New Content to GDSs Needs to Be Considered in the Context of Existing GDS Market Power

By: Delta


 

September 24, 2012

Supplemental Comments of Delta Air Lines

There is no business need to collect ancillary fee and mishandled baggage information in the manner and at the level of detail proposed in the NPRM. Because Delta and other airlines do not currently maintain the information, the underlying notion that the NPRM will be fairly simple to implement and impose minimal costs is fundamentally flawed. Carriers cannot report the proposed new information with just a few minor programming changes. Major new investment would be required to capture and report the information proposed to be collected by the NPRM. In Delta’s case, the initial cost of compliance would likely exceed $20 million. The rules relating to baggage reporting would also create ongoing operational costs and passenger inconvenience.

Counsel: Delta, Alexander Van der Bellen, 202-842-4184


 

Issued October 18, 2016

Final Rule

As Published in the Federal Register, November 1, 2016

The Department of Transportation is issuing a final rule that changes the mishandled-baggage data that air carriers are required to report, from the number of Mishandled Baggage Reports and the number of domestic passenger enplanements to the number of mishandled bags and the number of enplaned bags. Fees for checked baggage may have changed customer behavior regarding the number of bags checked, potentially affecting mishandled-baggage rates. Finally, this rule fills a data gap by collecting separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities and transported in aircraft cargo compartments. An additional topic covered in the proposed rule, the reporting of airline fee revenues, remains open and is not addressed in this rulemaking.

By: Anthony Foxx


 

Issued March 2, 2017 | On File at Federal Register March 20, 2017

Final Rule

The Department of Transportation is amending its regulations by extending the compliance date of its final rule on reporting of data for mishandled baggage and wheelchairs in aircraft cargo compartments from January 1, 2018 to January 1, 2019. Under that final rule, the mishandled-baggage data that air carriers are required to report changed, from the number of Mishandled Baggage Reports and the number of domestic passenger enplanements to the number of mishandled bags and the number of enplaned bags. The rule also requires separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities and transported in aircraft cargo compartments. This extension is in response to a request by Airlines for America and Delta.

By: Judith Kaleta


 

December 5, 2017

Notice of Withdrawal of Proposed Rulemaking

The purpose of this rulemaking was to make airline pricing more transparent to consumers and airline analysts. Although we believe there would be benefits of collecting and publishing the proposed aviation data, the Department also takes seriously industry concerns about the potential burden of this rule. The Department is withdrawing this rulemaking proposal. The withdrawal of this rulemaking corresponds with the Department’s and Administration’s priorities and is consistent with the Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, January 30, 2017.

By: Elaine Chao


 

OST-2017-0007
RITA-2011-0001

December 19, 2017

Comments of Sixteen State Attorneys General

The Transparency of Airline Ancillary Service Fees rule, proposed in January 2017, would have made it far easier for consumers to understand the true cost of their airline tickets. When a customer books a ticket, the baseline ticket price is typically all that is shown. Carry-on baggage fees, checked baggage fees, seat fees, and more are not disclosed until booking is nearly complete – or even after tickets have been purchased. According to a 2016 study, travelers paid an average of $100 in fees per round-trip on Spirit airlines, $97 on Frontier and $86.92 on United. We regularly hear reports from consumers in our states who are confused and frustrated by these fees, which significantly alter the total cost of travel.

As airlines increasingly charge separate fees for basic services rather than building them into the cost of their tickets, transparency in pricing is more important than ever. In addition to baggage fees, some airlines charge for printing boarding passes at the airport, allowing passengers to select seats and even for providing assistance to children traveling by themselves, all of which were previously considered standards activities covered by the price of a ticket. It is critical that consumers are able to quickly and easily determine and understand the full costs of their travel to make informed choices.

We are committed to working collaboratively with your Department to protect consumers and ensure that America’s transportation sector is able to grow and thrive in a truly competitive environment that benefits our citizens and our economy. Unfortunately, this decision by your Department works against those goals, making it harder for Americans to be informed consumers when they travel.

By: Josh Shapiro

 

 

 


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