The Department of Transportation (DOT) is planning to make “secret shopper” test calls to major travel agencies and some airlines over the next three months to assess their compliance with disclosure rules about booking airline codeshare flights.
The DOT’s plan stems from a commitment it recently made to its inspector general to more closely monitor travel agency compliance with the disclosure rule.
The DOT’s aviation enforcement unit told the inspector general last month that it was preparing a round of spot checks or test calls “to the top 10 brick-and-mortar travel agencies by revenue, as well as a number of carriers,” and that it hoped to complete the test calls by the end of June.
It said it would “take any enforcement action determined to be necessary,” which could mean monetary penalties.
The disclosure rule generally requires travel sellers to disclose to consumers the name of the transporting carrier on codeshare flights, and to do so before the booking is made. The information is also required on printed invoices.
Websites, in addition, are required to include the information “in any schedule displayed in response to an itinerary request by a consumer.”
The DOT initiative was triggered by a report from the inspector general regarding regulatory oversight of domestic codesharing, including consumer disclosure issues. The report was requested by Congress in the aftermath of the crash of a Colgan Air flight near Buffalo in 2009.
That flight was operated as a Continental Connection flight, and the subsequent investigation raised questions about the degree to which codeshare partners have different operating standards and whether passengers on codeshares are fully informed about carrier identity.
In the course of its review, the inspector general found that the DOT “does not actively survey traditional travel agents for compliance with code-share disclosure regulations, although they account for about $60 billion of total air travel sales.”
As an initial assessment of the situation, the inspector general made test calls of its own and reported that “14 of 16 travel agents we randomly contacted failed to disclose or properly identify the operator of codeshare flights — even after being asked to identify the name of the actual operating carrier.
In most of those cases, the travel agents actually provided incorrect information regarding which carrier was operating the flight. This would seem to indicate that the public could benefit from enhanced oversight of this segment of the ticketing industry.”
The inspector general’s report also criticized airline websites and online agencies, in general, for using differing and confusing methods to make the required disclosures on display screens.
“Current variation among websites can make it difficult for consumers to locate and/or understand the disclosure of which carrier is operating their flight,” the report stated.
Although the DOT has not imposed a uniform display rule to govern website disclosures, the inspector general noted that it is working on a rule “to codify website disclosure of codeshare operations.”
ASTA recently issued an alert to its agency members about the DOT’s plans. Paul Ruden, ASTA’s senior vice president for legal and industry affairs, said he was not aware of any major issues in the industry regarding codeshare disclosure.
But in the case of oral disclosures, which are required in phone and face-to-face transactions, he said hard data about compliance is hard to come by.
He noted, however, that the DOT takes its rules seriously, and ASTA has repeatedly advised its members that “you have to do this.”
In addition to recommending more oversight of travel agents, the inspector general suggested that the DOT “take a more active role in reviewing domestic codeshare agreements,” most of which, because of deregulation, require no regulatory filing by the carriers.
It also suggested reforms to the DOT’s monthly report of consumer complaints, to more accurately identify the name of the responsible carrier when a complaint concerns a code-share flight.
And in conjunction with the FAA, the inspector general said the DOT should review major airline contracts with regional airlines regarding such matters as “financial incentives for on-time performance, to ensure they do not have unanticipated or adverse impacts on safety.”