WASHINGTON -- The
Transportation Department is relaxing its code-share disclosure
rule for airline advertisements and Internet listings, agreeing
with the arguments by many U.S. carriers that the current
requirements have become too burdensome for airlines and too
confusing for consumers.
Under current
rules, each ad must include a separate note for each named city
pair that might be operated by another carrier, naming the other
airline that might operate that particular flight.
But with
code-sharing and regional service prevalent in the industry, the
regulation has produced a forest of footnotes.
The new rule,
issued July 29, will change all that when it becomes effective
Sept. 6. It will apply to both print and Internet
advertisements.
Under the new
rule, airlines will be allowed to include a general statement that
says some of the flights may be operated by other carriers, along
with a list of those carriers, without matching a particular
carrier to a particular flight.
Airlines and
travel agents still have to provide more specific information,
however, when a customer calls.
Before making a
booking, they must tell the customer the name of the carrier
operating the flight. Similarly,
Internet sites also must provide that specific information before
taking a booking, the DOT said.
As a general
matter, the more information provided consumers, the better they
are able to make informed choices in the marketplace. However,
requiring the provision of too much information in a necessarily
complicated format can result in increased consumer confusion, the
DOT said in explaining its decision.
Furthermore,
compliance with such requirements is often a substantial burden on
advertising carriers, the DOT continued. Therefore, we must balance the needs of consumers
with the burden on the marketplace of strictly regulating the form
and content of that information.
We not only agree
that these footnotes are burdensome for carriers, but we also see
merit in the argument that the many separate footnotes now required
where multiple markets are contained in a single advertisement may
also confuse customers rather than inform them of advertised
services.
In petitioning
for the rule change last year, United cited one example in which a
systemwide sale ad included 10 footnotes for 31 city
pairs.
Six of the seven
largest U.S. airlines, including United, supported the change, as
did a bevy of regional carriers, ASTA and Orbitz.
Some low-cost
carriers, however, opposed the change: Independence and JetBlue,
which dont code-share, and Southwest, which only code-shares with
ATA.
The arguments by
Independence and JetBlue included the assertion that the more
detailed information is necessary so consumers know immediately the
type of customer service and product being offered.
The Air Carriers
Association of America (ACA), which represents many smaller
airlines, also fought the proposal.
Many customers
seeing such an ad -- even if they may eventually be told that some
of the flights are operated by code-share partners -- will remember
that ad and focus on the carrier with the largest number of flights
listed in that ad when deciding which carrier they will utilize,
the ACA told the DOT. It is another way
for a larger carrier to increase market dominance.
To contact
reporter Andrew Compart, send e-mail to [email protected].
Get
More!
To read the
entire document, click on Research and then click on Source Docs. The DOT document is titled "New
rules for code-share notices in airline ads."