Opinion: Do Travel Agents Face Increased DOT Control?

If travel agents feel left out of federal regulatory schemes, take heart. The always-formidable Department of Transportation (DOT) appears determined to bring agents into its regulatory orbit.

Under consideration is whether the Department should require travel agents to adopt minimum customer service standards in relation to the sale of air transportation.

Not enough? Try whether the DOT should require ticket agents to disclose the carriers whose tickets they sell or do not sell and information regarding any incentive payments they receive in connection with the sale of air transportation.

Need more? Try whether the DOT should require agents to disclose any preferential display of individual fares or carriers in the ticket agent’s internet displays; if the DOT should require additional or special disclosures regarding certain substantial fees, e.g., oversize or overweight baggage fees.

These proposals are part of the DOT’s Airline Passenger Protections III Notice of Proposed Rulemaking (NPRM) that addresses a host of issues. – nine in total  - which the DOT is addressing.

Depending on how the industry treats the final rulemaking later this year, travel sellers could be drawn into the DOT’s regulatory orbit. The DOT’s new Supplemental Notice of Proposed Rulemaking (SNPRM) covers a lot of ground. It will impact agents (large and small, online and offline), airlines, tour operators and travel management companies.

The DOT - with a $74 billion budget – also asks whether it should prohibit post-purchase price increases for all services and products not purchased with the ticket or whether it is sufficient to prohibit post-purchase price increases for baggage charges that traditionally have been included in the ticket price and whether the Department should require that ancillary fees be displayed through all sale channels.

These proposals fulfill a commitment made in the final rule on enhancing airline passenger protections (74 FR 68983) to further address concerns about “hidden and deceptive fees, tackle the recommendations received from the Future of Aviation Advisory Committee, “ the DOT says.

The Department says its concerned with airline passenger protection, and wants to provide interested parties “another opportunity to comment on price increases for optional services which passengers purchase after they buy tickets.”

Surprisingly, the DOT notes, “ relatively few comments were received.” The new end of the comment period is October – originally scheduled for March 2012.

Airlines are of course at the center of the proposals. The rulemaking would address many complex issues. Should DOT require a marketing carrier to provide assistance to its code-share partner when a flight operated by the code-share partner experiences a lengthy tarmac delay? Many proposals will tighten disclosure and reporting requirements.

What does all this mean for travel agents? Clearly DOT policies have the ability to transform travel distribution and the airlines. Would it drive travelers to the airlines' web sites? Would extensive disclosure confuse clients? But the real question is if  travel agents or the industry needs or wants more controls.

In the name of consumer protection the DOT could gain unprecedented regulatory power and influence over agents. But at what costs?  Who benefits? And who pays the fines, fees, compliance and tracking costs sure to follow new DOT rules?

Added time for comments to the DOT is welcome. Major agent groups such as ASTA and the Business Travel Coalition (BTC) have made aggressive efforts to educate agents on the issues. But the challenge remains. Do travel agents want their businesses tied up in a web of restrictive regulations and taxes? Do their clients?

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