Members of the House Transportation and Infrastructure
Committee grilled airline executives about industry practices for more than
four hours Tuesday and threatened to step up regulations if airlines don't
improve customer service on their own.
"Something is broken and the obvious divide between
passengers and airlines needs to be addressed," said committee chairman
Bill Shuster (R-Penn.)
Shuster said the he doesn't like regulations, but would
employ them if needed.
"Congress will not hesitate to act whenever necessary,"
he said.
The hearing came three weeks after the violent removal of a
ticketed passenger from a United Express flight focused public attention on
U.S. airline industry practices -- especially those related to overbooking
flights and to denying boarding to paid passengers. Witnesses included United
CEO Oscar Munoz and United president Scott Kirby, as well as high-ranking
executives from Southwest, American and Alaska airlines.
All major U.S. airlines were invited to appear before the committee,
Shuster said. Notably, Delta didn't accept the invitation.
Air passenger consumer advocate William McGee also sat on
the panel.
Several congress members used the hearing as an opportunity
to take public shots at the airlines.
"I was going to ask why do you hate the American
people?" said Rep. Duncan Hunter (R-Calif.) "I'm not going to ask
that. I was going to ask how much you hate the American people. I'm not going
to ask that either."
On substantive matters, the representatives focused much of
their attention on especially unpopular airline consumer practices, including
overbooking, change fees, dense aircraft seating configurations and the lengthy
and complicated contracts-of-carriage documents that airline passengers, often
unwittingly, agree to when they purchase a ticket. Delta's contract of
carriage, for example, is 51 pages long.
The airlines at the hearing generally agreed that they
should simplify the contracts.
"We do want it to be usable for customers," said
Alaska senior vice president for external relations Joseph Sprague.
On overbooking, however, the carriers disagree. Southwest,
which was represented at the hearing by chief commercial officer Bob Jordan,
will end overbooking on May 8. Jordan said the no-show rate at Southwest has
dropped over the years, in large part to due to improved forecasting and data-management
technology. As such, ending the practice won't have much impact on the carrier's
bottom line.
"Simply put, discontinuing the practice of overbooking
is completely consistent with our other customer-friendly policies,"
Jordan said.
But executives for American, United and Alaska said overbooking
flights enables them to fill more seats on each airplane and keep prices down
as a result.
United president Scott Kirby also said that in some cases
overbooking helps passengers whose original flights had been canceled. Without
overbooking, United wouldn't be able to assign those passengers to a new flight
as quickly.
"If we stopped overbooking entirely, there are thousands
of customers that we couldn't get tickets to," Kirby said.
Sprague added that without overbooking last year, more than
600,000 seats that Alaska sold wouldn't have been available.
In one of the hearing's more uncomfortable moments, Rep.
Pete DeFazio (D-Oregon), the transportation committee's top Democrat,
confronted executives on change fees, noting that United made $800 million off
them last year. (Southwest doesn't charge change fees.)
How much, DeFazio wanted to know, does it actually cost to
change a ticket reservation?
"The cost is not about the process," said American
senior vice president of customer experience Kerry Philipovitch.
DeFazio connected change fees and overbooking, noting that
when airlines first instituted overbooking as a practice in the 1950s and 1960s,
they weren't collecting substantial revenues from no-show passengers.
In another moment that left United on the defensive, Rep.
Steve Cohen (D-Tenn.) sounded off on the practice of adding more seats to
aircraft and questioned whether the denser interior configurations are
jeopardizing safety in the case of an evacuation.
"We test all of our aircraft for evacuation," said
Kirby, who while working for American earlier this decade championed that
airline's move to more seats on some narrowbody and widebody planes.
Lawmakers, as well as the consumer advocate McGee, also put
their focus on airline consolidation. Since 2006, the U.S. airline industry has
seen the number of primary carriers shrink from 11 to four, and United, Delta,
American and Southwest now comprise approximately 85% of the domestic U.S.
airline market.
"You're in a near monopoly position," said Rep.
Patrick Maloney (D-NY), who then referenced the recent United incident.
"If the market was functioning well, this could never
happen, Mr. Munoz," he said.
For their part, Munoz and other witnesses stressed the
efforts they are making to improve the passenger experience, including billions
of dollars of investments in new products and the new policies they've put in
place that should all but end involuntary removals from aircraft for reasons
not related to safety. They also reminded lawmakers that industry metrics
related to baggage handling and timeliness have improved in recent years.
"The fact of the matter is we have been focusing on
improving our customer experience ever since we have had the financial
wherewithal to do that," Philipovitch said.