Travel Agents Face Challenge With New DOT Rules

New Department of Transportation (DOT) rules – expected in January – will challenge travel agents, suppliers and airlines who will confront sweeping new full disclosure rules on advertised airfares, according to Sam Podberesky, the assistant general counsel for the DOT’s Office of Aviation Enforcement and Proceedings.

Podberesky told participants in a recent Legal Symposium webinar sponsored by ASTA that all agents who sell and promote air  - including agents who sell cruise and tour packages - will be affected by the new rules. The core message from ASTA: agents should prepare their businesses to comply.

ASTA’s goal in sponsoring the webinar, hosted by Paul Ruden, ASTA’S senior vice president, industry and legal affairs, was to both heighten agents awareness of statuary obligations to comply with the DOT rules and help agents prevent costly enforcement action by the DOT.

Ruden noted that ticket agent enforcement actions have increased from five in 2009, to 10 in 2010 and 12 through June of this year. Podberesky noted that the January rulemaking will be the third wave of consumer rules that the DOT has mandated.

Full fare advertising is one of eleven enhanced airline passenger protections cited by Podberesky. Noteworthy are new rules on tarmac delays, denied boarding compensation, response to consumer problems, post purchase price increases and a host of other issues that clearly will impact airline policies and travel agents.

Online promotion is one target of the DOT. Full fare advertising will include rules that require advertising and displayed fares that must include all government-imposed fees and taxes and all mandatory agency imposed fees, including service and transaction fees.
The new rules encompass "tours, cruises or any combination of products that include air” but do not apply to private corporate booking tools.

Disclosure will be required on the carrier’s homepage of changes in bag fees and/or allowances for three months and disclosure of all fees for optional services to consumers through a prominent link, the DOT says.

Both carriers and travel agents must inform passengers on the first screen of their websites on which there is a fare quotation for a specific itinerary that “ additional airline fees for baggage may apply” and “where consumers can go to see these baggage fees." Another obligation is to “include on e-ticket confirmations information about the free baggage allowance and applicable fees for carry-on, first and second checked bag." Travel agents can fulfill the obligation through a hyperlink, DOT says.  

Full disclosure is the basis for the DOT’s changes. This includes full disclosure of code shares in advertisements, a requirement that carriers have customer service plans, deadlines for responding to consumer complaints and increases in denied boarding compensation.

The eleven areas of change include: tarmac delay contingency plans, tarmac delay data, customer serve ice plans, posting of plans on websites, responses to consumer problems, denied boarding compensation, full fare advertising, baggage and other fees, post purchase price increases, flight status changes and a choice of forum provision.

Podberesky’s presentation at the ASTA webinar made clear the strongly pro-consumer underpinnings of DOT policy that will change how airlines, tour operators and agents will market and promote air services.

Unknown, however, are the changes that air carriers and travel agents will present to the DOT before the rules become final and the costs and practicality – to carriers and agents - of complying with the new rules.

One example is a rule that says no post purchase price increase of airfare/tour and bag fees is allowed, with limited exceptions “if consent is obtained prior to the acceptance of any payment: an increase may occur before final payment is received.”  An increase may not occur after final payment is received, except for government imposed tax increases, DOT says.

Bag fees in place at time of purchase must be honored and be specific. Group contracts would also be impacted. According to the DOT, “once full payment is made, the carrier can not impose an increase of its fees (i.e. fuel surcharge) even if group ticketing has not occurred.”

The online webinar marked the launch of ASTA’s Business Executive Series, designed to provide ASTA members with direct access to experts through a succession of thought-provoking and informative programs.