The Department of Transportation (DOT) has proposed a rule that would clarify the legal meaning of “unfair and deceptive practices” in the airline industry.  

The clarification would apply to potential punitive action against both airlines and ticket agents, including travel advisors. 

The rule, says the DOT, would benefit consumers, airlines and ticket agents alike by providing more certainty as to what constitutes an unfair or deceptive practice. 

ASTA and the lobbying group Airlines for America (A4A) support the measure. Consumer advocates, however, are dismissing the proposal as an effort by the Trump administration to make it more difficult to create new regulations or to enforce existing ones.

Under the proposal, the DOT would define a practice as unfair to consumers “if it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition.”

A deceptive practice would be defined as one that “is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter.”

The rule would also require the DOT in future enforcement orders to state the basis for determining that a practice is unfair or deceptive. In addition, it would codify the DOT’s standing practice of offering airlines and ticket agents the opportunity for an informal hearing before any enforcement action is taken.

Finally, it would require that formal hearings be held by the DOT as it develops future airline consumer-protection regulations that haven’t been mandated by Congress.

In a regulatory filing, the DOT said that it initiated the rulemaking at the suggestion of A4A.

DOT rules on tarmac delays, post-purchase price increases and airline overbooking are examples of airline consumer-protection regulations issued under the federal code governing fair and deceptive practices, the department said. 

In a statement, A4A praised the proposed rule and DOT secretary Elaine Chao.

“This proposal will provide greater transparency for both the U.S. airline industry and the flying public,” A4A CEO Nick Calio said. “We commend Secretary Chao for her leadership in reforming the department’s regulation of our industry. That effort continues to deliver tremendous benefits to the 2.4 million passengers who travel aboard U.S. airlines every day.”

ASTA executive vice president of advocacy Eben Peck said the organization is still reviewing the proposal, but its initial reaction is favorable. 

“We spend a great deal of time helping our members -- ‘ticket agents’ in the eyes of DOT -- comply with the department’s rules and regulations and avoid fines for noncompliance,” Peck said.  “As such, anything that provides additional clarity to our members in terms of how the DOT intends to police the industry -- as this proposal appears intended to do -- is welcome.”

Peck said that the proposal makes no change to existing regulations on the books that ASTA supports, including the full-price advertising rule and the tarmac delay rules. 

Consumer advocates are far more circumspect.

“The Trump administration has followed the airlines’ wishes to make any enforcement of rules almost impossible,” said Charlie Leocha, CEO of Travelers United.

The DOT, he said, is proposing this detailed approach to enforcement of rules for airline protection. In the meantime, airline passengers have no state judicial rights and the DOT has “never provided any roadmap about how to get grievances handled by airlines other than through federal courts,” Leocha said.

Leocha said he’d like the DOT to instead comply with various overdue mandates from Congress, such as establishing minimum seat sizes and finishing a rulemaking on lavatory access in single-aisle planes.

Consumer advocates are planning an initial meeting to discuss the rulemaking next week, he said.

The public can comment on the proposed rule through April 20 by going to regulations.gov, docket number DOT-OST -- 2019-0182.

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