Consumer group tells Congress: Fix US airlines

Consumer and worker advocacy organization the National Consumers League is calling on the Senate to take immediate action to address the lack of competition among U.S. airlines.

“It is time for Congress to step in and restore consumers’ rights in the airline industry,” Sally Greenberg, NCL’s executive director testified before the Senate Commerce Subcommittee on Aviation Operations, Safety and Security. “Only through Congressional action can American consumers be assured that the next time they fly, they won’t become the unwitting star of their own viral airline video.”

Sally Greenberg
In less than a month, there have been at least two such videos. The earlier showed Dr. David Dao being forcibly removed from United Airlines (NYSE:UAL) Flt. 3411 on April 9. The latter, recorded aboard American Airlines (NASDAQL:AAL) Flight 591 from San Francisco International (SFO) to Dallas-Ft. Worth (DFW) on April 21, showed a flight attendant daring a passenger to hit him.

NCL said the lack of competition fuels such incidents and blamed unchecked consolidation for an environment characterized by anti-consumer practices, policies, and experiences.

“Since airlines were deregulated in the late 1970s, there have been no fewer than 40 airline mergers,” the group said, adding that currently, more than 80 percent of domestic flights are controlled by four major airlines.

Further, Greenberg said, “The near-complete lack of competition has enabled U.S. air carriers to worry more about profits and less about customer service and consumer rights. Although recent headlines have shined a spotlight on the airlines’ most egregious practices, frequent air travelers were already familiar with how anti-consumer the industry has become.”

Unchecked consolidation has led to higher prices, fewer flights, worse service, and the rise of excessive fees for things like baggage, cancellation, seat selection, and other services that were at one time free to customers, Greenberg said, noting that the major airlines are taking in record profits from such fees. In 2015, the biggest airlines brought in $14.69 billion in ancillary revenue, according to an independent study.

“Consumers are increasingly powerless in the airline marketplace and have been forced to suffer from a decrease in comfort and amenities, with shrinking seats, aisles, and bathrooms,” she added, calling for Congress to take action and implement a Passenger Bill of Rights, strengthen consumer protections, and require airlines to justify fees and reverse the trend of “unbundling” services.

Greenberg’s testimony, particularly as applies to ancillary fees and charges, aligns with a report issued in the waning days of the Obama administration. In its report titled “The Competition Initiative and Hidden Fees” issued in December 2016, the National Economic Council detailed why such fees were misleading at best and damaging to the economy at worst, and concluded by calling for the elimination of such charges.

“All actors – policymakers at all levels of Federal and state government, the private sector, and researchers – need to build on the actions of Administration and seek to mitigate or eliminate the growing use [of] ‘hidden fees’ across a number of industries,” the 16-page report said.

Greenberg’s full testimony is available here.  The White House report is available here.

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