U.S. PIRG Testimony on Airline Passenger Rights

Before a Hearing of the Advisory Committee

on Aviation Consumer Protection

Thursday, June 28, 2012

Washington, DC

The Honorable Lisa Madigan, Chair

Presentation By

Edmund Mierzwinski, Consumer Program Director

and Caitlin Kelmar, Research AssistantTestimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 1 General Madigan, members of the committee: Th ank you for the opportunity to testify before you today. U.S. PIRG serves as th e federation of state Public In terest Research Groups, which are non-profit, non-partisan public interest advocacy organizations around the country.

U.S. PIRG has a longstanding interest in airline passenger rights. We have testified before the U.S. Senate, commented to regulators and otherwise supported reforms.

We commend Secretary LaHood and the Department for the steps it has taken to implement and enforce airline passenger rights’ regulations – ev en before the Congress acted -- and for its establishment of this committee, using statutory authority establis hed in Section 411 of the recent

FAA Modernization and Reform Act of 2012. That law also codified many airline passenger rights long-championed by Senators Barbara Bo xer and Olympia Snowe and Representative Mike Thompson and others.

This Advisory Committee on Aviation Consumer Protection is an important part of those reforms and must continue despite airline opposition. It has the potential to examine and recommend changes to unresolved issues and to study the recently-established reforms and whether they are working and make recommendations for additional reforms or DOT priorities.

While the Federal Register notice announcing today’s hearing states th at “it is anticipated” that your meetings will all be here in this building (a nd further states that this building apparently requires 5 days’ notice to visit, which is more notice than the White House West Wing requires by the way), we would encourage you to conduct additional field heari ngs outside Washington, DC, perhaps at airports, to obtain further view s of passengers. The airlines have more than enough lobbyists and the means to find you; you ma y have to go out and find passengers to ask

their views. Use other methods th an the Federal Register to reach out. Airline lawyers read the Federal Register. Air line passengers do not.

We don’t pretend that our initial testimony to you today is compre hensive. We intend to simply provide topline highlights – includ ing a few actual consumer storie s -- on a range of issues we urge you to review. We concur and associate ourselves with the more detailed filings of flyersrights.org and the Aviati on Consumer Action Project. I have also quickly reviewed the testimony of airlinepassengers.org and support ma ny of its recommendations. In particular, we support its comment that the preemptive impact of federal aviation rules and laws as interpreted by the courts and previous administrations has g one way too far in throttling back the rights of

consumers to defend themselves in court.

All consumer organizations believe that it is critical to reinstate consumer and state rights to enforce consumer protection laws over airlines, which enjoy a de gree of federal immunity from state action under consumer protect ion powers few other firms have. This has allowed them toTestimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 2 continue to treat consumer complaints with di sdain and to fail to comply with longstanding, modest disclosure and compensation laws. It remains to be seen what effect this immunity will have on their compliance with the new consumer rules.

Issues for the Committee to Review:

1. Lack of Concern For Delayed and Canceled Passengers: Investigate the general lack of cooperation, information, compensation or protections when handling passengers whose flights have been delayed or cancelled:

In 2007 the “reciprocity ru le” quietly expired. That regulation in place for over 20 years allowed a passenger to walk over to anothe r air carrier in the event of a flight de lay or cancellation and

the other air carrier would have to honor the ticket at no extra charge. Worse, since 2007 there have been numerous changes made to the airlines ’ contracts of carriage, none of which are in the passenger’s favor. Passengers have no idea their rights have been minimized or eliminated. The committee should review all Contracts of Carriage and examine the extent that problems that are clearly within the airlines’ contro l have been falsely labeled Acts of God or “Force Majeure,” or

out of the airlines’ control.

For example, United Airlines defines “Force Majeur e” to include “Any shortage of labor, fuel,

or facilities of UA or others .” These are matters under the ai rline’s control, not forces.

Passengers not only have no coope ration or information, they have no compensation and few protections against de lays and cancelation.

2. Roundabout travel with no compensation: In vestigate related problems created because mergers and efforts to decrease capacity h ave resulted in major routing and schedule changes that adversely affect passengers. Airlin es offer passengers no compensation even if there is a significant delay created by the circuitous route they will now be taking.

A passenger told flyersrights.org: I booked a tic ket to go from SFO to Ithaca to Boston to Los Angeles to take my son to visit corn ell, MIT and Cal-Tech. The first flight was Virgin America to Boston, US Airways to Philadelphia and then US Air to Ithaca. Originally we were leaving at 6: 30 am, arriving in Bo ston at 3:30 pm, 5:30 Boston to Philly and 7:30 Philly to Ithaca. US Airways lost their “slots” and the day after I made the reservation they changed the itinerary, then the second day after they changed the itinerary such that after 5 days of daily changes we weren’t arriving until midnight. That significantly increased th e stress and fatigue factor and they only offered us to either cancel or accept. No alternative even though other code share partners had absorbed their prior slots and co uld have honored our original itinerary. Ironically I needed to change the return flig ht to Boston and they wanted to charge me a $150.00 change fee for both tickets (the other irony is that a flight from Ithaca to Boston was only $75.00).

Another consumer told the flyersrights.org hotline that American made a unilateral schedule change and moved his return f light a day ahead. That made the tripTestimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 3 impossible for him due to non-refundable ski tickets and hotel that were pre-paid. The

airline tried to blame weathe r, mechanical failure and gat e controls. He felt they hadn’t sold enough seats, but his entire tr ip ended up being cancelled because of the unilateral change.

A related issue is that if you change the schedule on one leg of a flight, ai rlines charge you as if you are changing both legs even if you are still on the same flights and same seats on the other leg, plus a re-faring fee.

3. Lost or delayed luggage: Airlines not only avoid discussing passe nger rights regarding cancelled or delayed flights, but they also re fuse to discuss the measures passengers can go through with the airline to locate lost or delayed baggage.

Airl ines need to take more respon sibility for the baggage they lose, including their failure to inform passengers of their rights to compensation for either delayed or lo st luggage. Of course, when consumers have no private right of action a nd state attorneys’ genera l have their hands tied by preemption, this statutory duty to provide compensation for lost or delayed luggage falls on

DOT to enforce.

In addition to a failure to disclose compensation rights or provide adequate compensation for lost luggage, flyersrights.org believes th at the airline system for recove ring lost luggage is inadequate and slanted in favor of earning reve nue from sales to firms such as unclaimedbaggage.com for up to $3/pound.

But it is worse; according to flyersrights.org, onl y 6% of all baggage claims are paid. Passengers are not given any information up front about having to have receipts for items lost, damaged or stolen in baggage and that those items will be depreciated for their age. They are not given good

information on exclusions in the contract of carriage for electronics and other valuables.

A story from the flyersrights.org hotline: Raymond’s bag was lost on Jet Blue airlines on June 28, 2011. They lost his luggage and th ey are refusing to compensate him for it. He’s very frustrated and feels he’s be ing stonewalled. He still does not have his bag nor has been paid any compensation.

Passengers shouldn’t find themselves in real li fe episodes of those odd reality shows “Storage Wars” or “Pawn Stars.” If adequate compensati on was required and rules were enforced, fewer pieces of luggage would be lost and more woul d be found before compensation had to be paid. Lost or delayed luggage payments are simply bei ng treated as a modest cost of business, not a potential penalty. Making consumers aware of th eir rights will make the airlines pay more, ideally enough to force them to improve both service and compliance.Testimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 4 4. Families Are Separated: No matter how sm ooth a passenger’s travels are leading up to the flight and following the trip, recent chan ges in airline policies have inconvenienced travelling families, for whom flyi ng is already enough of a hassle at both ends of the trip, including helping small children through securi ty before the flight and keeping track of kids while looking for thei r baggage after the flight.

United Airlines has taken the lead and other airlin es are following suit with new anti-family rules related to the new reliance on charging a different price for every seat on the plane up until the minute the doors are closed. According to flyers rights.org, United and others have discontinued pre-boarding for families with small children, are withholding aisle and window seats for frequent flyers and/or charging more for them. Families are now being separated only to sit in

the middle seat in different rows.

Airlines appear to be moving passengers who have paid for and booked aisle seats in order to sit next to their children, in favor of their loyalty card members.

Story reported to flyersrights.org: Greetings, is it right that United Airlines can move a 12 year old child away from her mother when I paid extra to get a row closer to the front of the plane? Brief hist ory, I purchased three tickets for my daughter in law and my two grandchildren to fly from CA to MA to see us this upcoming July 3rd i bought these tickets in April 2012. I paid extra to mo ve them to aisle 8 seats D, E, F. This morning I noticed that my 12 year old granddau ghter was moved out of 8E to the back of the plane all by herself. I called custom er service and all she saw on her computer was due to "reconciliation" they moved her. I was not happy that their current "system" allows them to move a child away from their parent. Are they allowed to do this? In speaking with customer service th is am they were able to move her to row 9 aisle seat, but it is still not w ith her mother! Her reply was to ask 8e (her original seat) to switch with her. Why should we beg anot her passenger to trade seats when we paid the extra fee for that seat? I cannot believe th at United moves a child like cattle. I paid extra for her seat, then they just kick her out and move her to the back of the plane. I am beside myself that United would do this. I have emailed customer service, which I'll probably get a canned reply. Do I have any ot her recourse? Thanks for taking the time reading this email.

5) Economy Seats Deserve Safety Review: Anot her issue passengers face while flying is the lack of leg room in economy seating. It is no t only uncomfortable, but can pose as a safety

issue as well. Leg room has become a safety issue in Economy.

The life-threatening condition of Deep Vein Thro mbosis (DVT), also known as Economy Class Syndrome, is not a new issue. Former Vice Presid ent Dan Quayle’s issues with it were reported in 1994. Yet, the problem may be worsening due to the incredible shrinking economy class seat.

According to flyersrights.org, FAA has set no ba sic minimum standards for legroom in economy class. They have regulated the bulkhead legroom and aisles for egress in case of an emergency but have never regulated legroom or seat pitch for other seats. The airlines are moving towardTestimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 5 even less legroom and tighter seating in many of th eir flights and we believe this issue should be

reviewed because of the severe medi cal problems that could occur.

As reported to flyersrights.org: Unfortunate ly, my husband died fr om a blood clot that apparently formed on his flight to Hawa ii from California. He was in the ocean swimming after the flight and dr owned. It will be a year this Father’s Day. My children are still dealing with it (of co urse). The clot caused a cr amp in his leg. Very sad. I do know how dangerous that can be. I don’t kn ow how long he was stuck immobilized on the plane but assume he had been sitting in cramped space for hours unable to get up and moved around. His legroom was diminished and he was squished in the back of the plane in a substandard arrangement.

6) Shopping based on complaints is too hard: The DOT Air Travel Consumer Report ( http://airconsumer.dot.gov/reports/index.htm ), while once ahead of its time, is now sadly

stuck in the 20 th century. The database needs to be updated and made user-friendly and

searchable and include richer narratives (with consumer information redacted) of problems.

According to the pdf Air Travel Consum er Report, for January – December 2011:

Total baggage reports: 1,907,769 Enplaned passengers: 562,944,498 Reports per 1,000 passengers: 3.39

On a quick review, we were unable to find a dow nloadable database enabling us to drill down

inside these and related data and learn more. Wa s there any clustering, what dates, airlines and airports were worst or best?

Agencies including the Consumer Financial Pr otection Bureau (consumerfinance.gov) and the Consumer Product Safety Commission (saferpr oducts.gov) are pioneering new, searchable

consumer databases with rich amounts of informati on, rather than statistical summaries in static pdf formats.

Complaint and on-time and other data important for consumers should be presented in machine readable format (such as xml or rdf, certainly not pdf) accessible by API (Application Programming Interface) software that will a llow reporters, researchers, consumer advocacy groups and others to easily conduc t additional analysis of identified problems in the aviation marketplace.

7) Lack of Funding for Avia tion Consumer Advocacy Is A Concern: Consider the Illinois and Oregon Citizen Utility Boards as a mo del; consider recommending that a penny of aviation taxes go directly to funding aviation consumer protection.

Aviation consumer organizations do not have adequate funding mechanisms. A model of enlisting citizens as regulatory monitors is th e CUB movement. CUB stands for Citizens Utility Board. The original idea was that utility rate payers may voluntarily check a box on their utilityTestimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 6 bill to fund organized advocacy vis- à-vis state utility regulators, just as workers have rights to petition for similar checkoffs to fund unions to re present their interests. Rather than simply expanding or complicating regulation, government-c hartered citizen groups can balance the power of regulated firms and keep their regulators from being captured. Wisconsin legislators

established the first Citizens U tility Board in 1979. Then, in 19 84, citizens in Oregon and elected officials in Illinois approved the establis hment of their own CUBs. Following a 1986 U.S. Supreme Court decision (which ha s since been rolled back) holding that a similar mechanism for a California utility consumer group was unconstitu tional, the movement st alled. The Illinois and Oregon CUBs, however, developed alternate funding that has allowed them to maintain their

effectiveness.

As you know, General Madigan, the Il linois CUB, in particular, has been successful. It sought a legislative amendment to place its checkoff insert s in larger state govern ment mailings, such as motor vehicle renewals, instead of in the utility envelopes. It claims to have saved Illinois consumers over $10 billion in refunds and blocked rate hikes.

The Oregon CUB uses intervenor funding, where a por tion of utility user fees paid to the state for regulation is allocated to effective citizen groups for their participation in rate case negotiations. Groups, including CUB, apply in a gove rnmental process for fees to cover their legal and other costs to represen t their members and ratepayers in cases before the commission.

The Advisory Committee should co nsider ways to fund a simila r group for aviation consumers, as U.S. PIRG, flyersrights.org and ACAP all s upport. One model would be to dedicate one penny

of each airline ticket taxes toward a fund esta blished under the DOT’s jurisdiction. ACAP has suggested that such a tax could raise $6-10 millio n annually and that passengers could select from a list of certified aviation consumer groups wh ich one to allocate their penny to. This would give consumer groups real repres entation against the phalanx of air line, airport, air transport and other lobbyists that have collec tively controlled airline legisla tion and regulation for years and

steered billions of dollars in subsidies and direct paymen ts their way. As former FCC Commissioner Nick Johnson once said, “government only stands upright when it is leaned on

from all sides.”Testimony of U.S. PIRG Before The Advisory Committee on Aviation Consumer Protection

28, June 2012, Page 7 In conclusion:

1) The Department of Transportation should both evaluate and regulate the airlines’ notification to passengers duri ng flight delays, cancellatio ns and schedule changes of their rights to compensation, hotel rooms and ta xis. The DOT should also evaluate flight codings to ensure that they match with “r eality” as GAO concluded that only 7% of all flight delays are extreme weat her, but up to 48% of flight codings are determined to be

weather. 2) The DOT should disaggregate “mishandled” baggage into three categories “lost,” “damaged” and “stolen” items. It should also do a study on the claims made vs. claims paid by the airlines and mandate that passengers get a response to their complaints within 2 days and an appropriate resolution within 3 weeks. 3) DOT should mandate, for safety reasons alone , basic minimum standards for seat pitch, seat size, leg room. 4) DOT should mandate that an schedule change must not “damage” th e passenger or their itinerary, or the airline should be responsible for those losses and returning the passenger

to “whole”

In sum, airline passengers have a paucity of in formation to help them make decisions when flying. Whether it’s hidden fees, lost baggage , schedule changes or a lack of help and information when something goes awry the deck is stacked sorely against the flying public. We need to level the playing field, an almost impossi ble task given the downwar d spiral that is air travel customer service. But this committee has the potential to make a difference.

Thank you for the opportunity to present our view s. We look forward to working with you to help make air travel a better experience for passengers.