The World’s Airlines Have Gotten Together To Demand Less Consumer Protection

World airline lobby shop IATA, the International Air Transport Association, is advocating for a reduction in consumer protections. Their main arguments are,

  • The problems in air travel aren’t just airlines! Governments or privatize services are often at fault, for instance airport runway capacity and air traffic control. They also cite “strikes by non-airline workers.”

  • People trust airlines to treat them fairly (“73% were confident they would be treated fairly in the event of operational disruptions”).

Since delays have increased since European EU261 compensation, the airline industry argues that the financial incentive in imposing costs for delays doesn’t reduce delays. That’s a bit rich, though, to argue that an increasing number of passengers needing compensation for airline flight delays proves it’s unnecessary to pay? The incentive isn’t the only reason!

  • Compensation is meant to compensate those who purchased a product but didn’t receive what was purchased, and were inconvenienced.
  • And maybe people trust that they’ll be treated fairly because of what they’re entitled to under these rules? (IATA doesn’t break out survey data to show where passengers are from who trust the airlines most. Show us the crosstabs!)

The Biden administration has proposed that airlines should pay out cash when they delay or cancel flights though this is largely a campaign issue rather than real policy change. And it’s true that an administration actually concerned with airline reliability would focus on air traffic control reform and infrastructure reform, so that the administration would stop creating bottlenecks.

Poor management at the FAA, and a failure to drive technological investment, limit throughput in the skies. And there are too many chokepoints in building airport facilities, especially runways, to increase air travel capacity.

It’s absolutely true that airlines are often held accountable to things outside of their control, but the ‘whataboutism’ involved – air traffic control is bad, so we should be allowed to be bad too! – is… exactly what you’d expect from a lobbying organization advocating the interests of its industry.

In the U.S. we’re stuck with a regulatory system that’s very much a second best. The Airline Deregulation Act has taken away the right of consumers to sue airlines based on common law principles of duty of good faith and fair dealing. We’re left relying on the Department of Transportation for consumer protection. Surely IATA wouldn’t trade reduced regulation for… tort liability. So bureaucrats are charged with ‘getting it right’.

IATA has for nearly 80 years presented itself as a standards setting body that raises the bar in the industry, advocating and training for safety. But it’s increasingly become an organization that lobbies for government subsidies and protection from costs.

Willie Walsh, IATA head and former head of British Airways parent IAG, says “The best guarantor of good customer service is consumer choice and competition.” So surely IATA will start lobbying for a dismantling of subsidies and protectionist rules. For instance, airlines would have to pay congestion pricing at airports instead of being granted slots (a property right to takeoffs and landings, given free by governments). Airlines would have to compete with foreign carriers in their home markets. That’s coming at next year’s IATA general meeting, right?

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @ Gary — The last time the airlines banded together for something, it was to demand government handouts ‘cuz COVID. They got an obscene amount of free money, and now (surprise, surprise!), they are screwing everyone over left and right with bad service, devaluations, etc. Now they want consumer protections dropped? This bs needs to stop. The US government should have extracted MORE consumer protections when they handed over the loot.

  2. The fact that airlines are pushing back means we’re on the right track. More consumer protection is needed.

  3. I do agree that it’s not just the airline’s fault. Ageing aviation technology, staffing issues at the FAA, neglected infrastructure, and more contribute. At the same time, some of the trunk carriers haven’t kept up with technology and updated their internal systems for decades. (Looking at you, DL and WN.) So, it’s a complicated problem involving both, plus other factors.

  4. @RF +1

    The fact that Walsh is for something pretty much makes me against it. The world needs a universal version of EU261.

  5. I like you’re thinking on slots for sure. Congestion pricing is a great solution. LGA, BOS, DCA all could use that. Eliminate slots altogether and charge a fee for them daily. You can depart LGA at 1730, but it will cost you more than departing at 1930, which will cost more than departing at 2130. Surge pricing especially. If you are one of 10 planes looking to depart at 1730, you get to pay a premium. That would force airlines to rethink their fleets and departure times in conjunction with their pricing strategies and revenue management. That 1730 slot would be several 767’s.

    But to the larger issue of ATC, the FAA, and the federal government need to step up and improve the system. I’m not a big proponent of privatization, though if it is done right, it is a good idea. The key would be that it isn’t contracted out to the lowest bidder. We need quality, not cheapness.

  6. Arilines: pinky promise we’ll do just as much to protect the consumers, so please rescind the rules.

  7. @UnionTHAT – If you want a perfect illustration of privatizing major airports, just look at Heathrow. Gigantic fees, unresponsive ownership, and inconsistent functionality. It’s a poster child for why airports should not be in private hands. I trust government a hell of a lot more than I trust some private entity to not make things vastly worse in order to make a buck.

  8. American airlines would be in trouble if they had to compete against foreign airlines more than they do. I was just on a LAX to PNH (Phnom Penh) trip that had a change of airplanes in Seoul/Incheon airport (ICN). There was a 50 minute timing between flights. The airplane landed ten minutes before the scheduled time and was at the gate one minute before the scheduled time. By the time that the jet bridges were attached to the A380, the upper class passengers got off, the people in front of me got off and I got off, about 15 minutes had disappeared. Then I got in the security check line. It was very slow but I was able to talk with a Korean Air representative who put me in a much faster line. Then I had to walk a very long distance to the gate, arriving a couple minutes before the announced gate closing of ten minutes before flight time. It turned out that they held the airplane for maybe 20 minutes to accommodate other passengers. We still arrived in Phnom Penh on time. Korean Air executed all details to perfection on a short connection and did it with a friendly attitude. The cabin crews were also great and they came to me to explain how to get through the transfer before landing in ICN. I was seated next to a Korean professor who had started the day in Mexico City. He remarked how bad the service on American airlines is. He also said that he hadn’t eaten because his Mexican airline flight to LAX did not serve food and places weren’t open to buy food before he left. So, after the first meal, he was still hungry. I urged him to ask a flight attendant for snacks. They did one better and provided him with a large cup of Korean noodle soup that did the trick.

  9. I see the solutions as a “yes, and” scenario. Yes, airlines need to do more to ensure operational reliability. While they are a business focused on profit optimization, they are also critical infrastructure to the economy. They pointed this out during the pandemic and after 9/11 when the had their hands out for a bailout.

    At the same time, governments needs to provide the necessary infrastructure the the airline to achieve a high-reliability status. But that is going to cost money, and require experts to do it right. The politicians and lobbyists need to step aside. The government needs to be an enabler here, not a barrier to success.

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