Joe Biden Govt Order regulates potential airline price guidelines
WASHINGTON – President Joe Biden’s administration is pursuing new rules to crack down on airline charges that travelers have long complained about being costly measures for sometimes lackluster service.
Transportation Secretary Pete Buttigieg said Friday his department would propose new rules that include reimbursement of fees for baggage delays or when services such as the aircraft’s WiFi or in-flight entertainment system fail or are not provided.
The move follows an instruction from Biden, who also directed the department to review rules that would require airlines to clearly disclose baggage, change and cancellation charges to consumers.
“Consumers deserve to get the services they pay for or get their money back if they don’t,” Buttigieg said.
Biden’s crackdown on airline charges came in a comprehensive order he signed Friday afternoon that targeted monopolies in industries including agriculture, technology, healthcare, banking and shipping. The contract comprises 72 initiatives, ordinances and guidelines in which more than a dozen federal ministries are involved in order to promote stronger economic competition.
“Let me be very clear: Capitalism without competition is not capitalism,” Biden said before signing the order in the State Dining Room of the White House. “It’s exploitation.”
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Current federal law states that passengers are entitled to a fee if their checked baggage is lost. The Ministry of Transport’s proposal would also require airlines to reimburse checked baggage if delays exceed 12 hours on domestic flights and 25 hours on international flights.
Another proposed rule would require airlines to issue a refund “immediately” if ancillary services such as Wi-Fi are not provided.
If the new guidelines are approved after a lengthy writing process, they could go into effect next year.
Other guidelines in Biden’s arrangement aim to bring down the price of prescription drugs. This includes instructions from the Food and Drug Administration to work with states to safely import prescription drugs from Canada and new rules that would allow hearing aids to be sold over the counter in drug stores.
The president also encouraged the Federal Trade Commission to abolish certain employee licensing requirements – which are often burdensome to workers – and prohibit or restrict companies from forcing workers to sign non-compete agreements that prevent them from exploring other occupations.
“At least one in three companies requires their workers to sign a non-compete agreement,” Biden said, arguing that it is “for a reason” – to keep wages down. “Let the workers choose who they want to work for.”
The US airline industry is dominated by four companies: American, Southwest, Delta, and United.
“Reduced competition is contributing to rising fees like baggage and cancellation fees,” the White House said in a statement. “These fees are often levied in lockstep, showing a lack of significant competitive pressures, and are often hidden from consumers when they buy.”
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The top 10 airlines charged $ 35.2 billion in fees in 2018, according to the White House, a massive increase from $ 1.2 billion in 2007.
A lack of competition in the aviation industry “reduces the incentives to provide good service,” the White House said, noting that airlines were late delivering 2.3 million checked bags in 2019, according to the Department of Transportation.
Airlines are pushing back, arguing competition is “robust”
Travel Fairness Now, a consumer protection group, said Biden’s Executive Order will help curb airlines’ appetites for “price harassment and surprise charges.”
“After years in which the mighty aviation industry got everything it wanted at the expense of the consumer, the actions of the administration and the DOT are a long-awaited breath of fresh air for the flying public,” said Kurt Ebenhoch, managing director of the group, in a Statement. “The aviation industry is less competitive than it has ever been since deregulation, and this sensible consumer protection will set us on the path to restore fairness to travelers.”
The airlines rejected the White House’s characterization that the aviation industry gave consumers few options.
Airlines for America, which represents seven major US carriers including Southwest, Delta, American and United, called the competition in the aviation industry “robust” and said few industries offer so many choices to consumers. It noted that two new airlines, budget airlines Avelo Airlines and Breeze Airways, debuted in a pandemic this year.
“The stiff competition in the US aviation industry has created an unprecedented level of affordability and accessibility from which the customer benefits at all levels,” said spokeswoman Katherine Estep in a statement.
The trade group said airline competition resulted in “historically low airfares,” with ticket prices adjusted for inflation falling by 24% over the past decade.
Contributors: Contributor Dawn Gilbertson; Associated press.
Reach out to Joey Garrison on Twitter @joeygarrison.