The Department of Transportation is getting well-deserved praise for updating its consumer protection rules, and we'll join the chorus -- but only for a stanza or two.
Boosting the compensation for denied-boarding victims and broadening the rule against long tarmac delays were two of several good decisions, for example, but too many of the DOT's new rules seem to be aimed at giving consumers "perfect knowledge" or "total protection" rather than addressing documented abuses.
The DOT seems to believe that it has a mission to remove all doubt, risk, uncertainty and friction for buyers of air travel, without regard to the unique burdens that its approach will place on the travel business.
Repeatedly as we pored over the DOT's 300 pages of rules and explanations, we found ourselves asking, "OK, but is this rule really necessary?"
A prime example is a new rule on postpurchase price increases. In short, the rule will prohibit airlines, other travel suppliers, tour operators, agents and other intermediaries from raising the price of air travel (or the price of any component of an air-inclusive package) after the consumer has paid in full. The lone exception are increases in foreign government taxes.
The rule sounds reasonable enough, but is it necessary? In its regulatory analysis, the DOT admitted that "most, if not all, domestic and foreign carriers are believed to be currently complying with this requirement."
So why bother? The DOT's explanation is that it will bring "some level of comfort or certainty to the passenger" and "may well lead to an improvement in consumer good will." That's fine, we suppose, but is that really sufficient justification for federal intervention?
Evidently somebody at the DOT forgot to read the preamble to the Airline Deregulation Act, which requires the DOT to place "maximum reliance" on competitive market forces to shape the industry. It seems to us that market forces have done a pretty good job of keeping a lid on postpurchase price increases in travel.
This intrusion would have been bad enough, but the DOT compounded it with an additional rule that prohibits travel sellers from increasing a price between the time a deposit is made and the receipt of final payment.
Here's how it will work: If there is any potential for an increase in fares, fuel surcharges, taxes, ancillary fees or other components, the travel seller must get the passenger's written consent prior to accepting the initial deposit, otherwise the increase cannot be passed on.
This requirement will apply to any entity that sells air travel or a package that includes air travel: airlines, tour operators, online travel agencies, brick-and-mortar agencies as well as resorts and other suppliers that offer air-inclusive packages.
Good intentions don't change the fact that this is a nuisance rule. The DOT did not cite any reports of consumer abuses to justify this move, and there was no discussion of it in last year's public notice. It just popped in to the final rule with a four-word explanation: "to further protect consumers."
It would help if the DOT could cite some need for this move or some precedent in other industries regulated by the Federal Trade Commission or the states, but it did not. We suspect that the DOT took this action simply because it thought it would be a good idea and it had the power to do it.
But when it comes to adding regulatory burdens to business, even little burdens, those reasons aren't good enough. Meanwhile, the little burdens are piling up.