Posted on: November 5, 2012
Good advice, bad advice
Given the amount of mischief and silliness that can occur in the name of consumer protection, we were of two minds last spring when the Transportation Department (DOT) created an Advisory Committee for Aviation Consumer Protection.
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On the one hand, we thought, it would be a good thing if the DOT got some additional perspectives on whether and how to enhance its growing body of consumer protection regulations.
On the other hand, we did not relish the prospect of the DOT falling sway to the idea that more regulations equals better regulation.
We hoped the advisory committee would show a little restraint, and with the publication of the committee's report to the DOT last week, we got our wish. It showed a little restraint -- but not quite enough.
On a central question of whether airlines should make all their ancillary services available in GDSs, the committee indicated that this would be a desirable end result, but it stopped short of recommending that the DOT force the issue with a regulation.
Instead, the committee said the DOT should ensure transparency, and it encouraged "all participants in the industry -- airlines, distribution systems and agents -- to continue innovating with respect to transparency and distribution of optional products and services."
We were encouraged that the committee was realistic enough to recognize that the DOT cannot eliminate all friction and uncertainty for consumers, as it noted that "Air travel today provides a wide variety of business models, network choices and optional services. But with choice comes complexity for consumers."
Unfortunately, the committee seemed to switch gears on the very next page when it recommended that the DOT require travel agents "to disclose the fact that they do not offer for sale all airlines' tickets, if that is the case, and that additional airlines may serve the route being searched. All ticket agents, including online ticket agents, should make this disclosure clearly and conspicuously."
It's one thing to argue that agents ought to tell clients if there are particular airlines or other suppliers that the agent refuses to sell. That idea comes up from time to time, and while we don't think it has much merit, we recognize that one could make a logical argument in favor of such disclosure.
But that's not what the advisory committee is talking about. The committee's stated concern has to do with the airline's marketing choices, not the agent's. In the committee's words: "In some instances, it may appear that a route is not served at all because the airline or airlines serving that route have chosen not to participate in a particular distribution system; this can be confusing for consumers."
We've seen no evidence that this is a problem big enough to justify government action, but on its face it seems to us wrong and wrong-headed to saddle agents with the consequences of an airline's sales strategy.
If a particular airline chooses not to participate in a particular distribution channel, it's incumbent on that airline to do whatever else it can to reach its market. It is surely not the government's job to require agents or other distributors to explain that airline's decision.
We don't believe any merchant in America should have to post a sign saying, "Acme Products has chosen not to sell its products in our store. This notice required by law."
This we don't need.