Majority Statement

• Daniel K. Inouye

  Senator
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  Majority Statement

  Daniel K. Inouye

              The quality of passenger service offered by the nation’s domestic airlines is an issue all Members of Congress hear about from their constituents regularly.  This Committee remains active in providing oversight of the issue in an effort to ensure that air carriers maintain an appropriate level of service.

   

              The Commerce Committee first held hearings in the summer of 2000, when air travelers experienced record delays.  In    2001 an additional hearing was held to assess the progress airlines had made in addressing the problems highlighted the previous year.

  At the time of those hearings, the majority of the nation’s domestic airlines had begun to take a number of voluntary steps to address service quality concerns, in an effort to avoid a legislative mandate.  The Air Transport Association’s (ATA) member airlines agreed to implement an “Airline Customer Service Commitment” in 1999 which addressed, among other issues, delay notification and on-time baggage delivery provisions.

   

               In its 2001 report, the Department of Transportation (DOT) Inspector General noted that airlines had made some progress on these commitments, but there was still room for improvement.

   

              While service appeared to improve during the past several years, the recent significant growth in airline travel has revealed that these problems remain.  Specifically, over the past several months there have been a number of events that have set off alarms about the underlying quality of airline passenger service.  

   

              Last December and over Valentine’s Day weekend, we had a number of cases where passengers were delayed in planes on the ground for nine or more hours.  Further, DOT statistics show February’s delays rose to the second highest level ever.

  Airlines point out that these problems are primarily attributable to weather or other uncontrollable air traffic operational problems. While weather can be a factor, poor management decisions by air carriers, a problem that is controllable, have also contributed to these problems.  

   

              When American Airlines and JetBlue experienced problems earlier this year, the absence of sufficient staff at the right locations was a major factor.  US Airways has experienced continuing service issues resulting from computer problems associated with the integration of America West.  These types of problems are within the control of the airlines and should be anticipated and managed appropriately.

   

              The solution to these increasing problems with airline service quality is not clear.  It appears that the voluntary commitments made by the airlines eight years ago to improve service are not enough to improve existing conditions, much less sustain quality as capacity continues to increase.  Yet, any comprehensive legislative solution risks micromanaging airlines, and possibly creating more problems through a one-size-fits-all approach.

   

              I look forward to hearing our witnesses’ perspectives on the issues, and working with them and FAA to find effective solutions.

   

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Minority Statement

• Ted Stevens

  Senator
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  Minority Statement

  Ted Stevens

  I would like to thank Chairman Inouye for calling the hearing today.  The topic of improved airline service and airline customer relations has been on many minds the last few months.

  Recently, the FAA forecasted that approximately 770 million passengers will fly this year, and more than one billion by the year 2015, and up to 1.2 billion by the year 2020.  The sheer number of passengers will be a challenge for the FAA and the airlines to cope with in terms of developing and implementing a modern air traffic control systems to meet this demand.  For the airlines, an important aspect of the system will have to be the need for improved customer service.

  Like many of my colleagues, because of the nature of our business, we tend to travel often and at peak times.  Over the years, we have all experienced less than ideal air transport situations.  While most of the traveling public has become tolerant of modest flight delays, it is important that the airlines take note of the lessons learned over the past few months and take adequate steps to address the increasing rift between airlines and the traveling public.

  It is also important, with traffic rebounding like it is, that the FAA and the Department of Transportation further work and research into predictive weather models and regulatory oversight of the users of the system.  They need to take continued steps toward how they manage delays in the aviation system.

  While the unintended consequences of legislating the customer service operations of airlines may not be the best route of action, airlines need to take the situation seriously.  As an industry, they should voluntarily update their individual ground operation procedures and emergency situation protocols along with providing vastly improved disclosure of flight data and communication with their customers. 

  I think we can all agree that delays will never be avoided altogether, but how we deal with them can certainly be improved. Again, Chairman Inouye, thank you for calling the hearing and I look forward to the testimony.

• John Thune

  Senator
  Read statement

  Minority Statement

  John Thune

  Chairman Inouye/Rockefeller, Vice-Chairman Stevens/Lott, thank you for holding this hearing today.  I would also like to thank our witnesses for their testimony.  Nearly everyone who has ever flown has a disaster story of their own.  Some are worse than others.  Some of the stories that are being highlighted at today’s hearing are among the worst. 

  Senators are heavy users of our aviation system.  I try to fly home to South Dakota every weekend to see my wife and one daughter still at home.  I’m sure some of the members of the Committee think their flight delay and cancellation stories rank right up there with the worst of them.  Unfortunately for the airlines, we get to see the good and the bad in their industry on a weekly basis.

  At first glance, the recent horror stories might seem like aberrations in an otherwise decent air service system.  But if you look at the bigger picture, from say – the 30,000 foot level (pardon the pun) – the story remains the same.  Flight delays are not decreasing.  Airline customer service is not improving.

  Airlines on-time arrival rate according to the Department of Transportation was 73.1 percent in January 2007, down from 78.8 percent in January 2006.  588 flights waited on the tarmac for more than two hours in January 2007.  This is nearly twice as many as January 2006, which had 298.

  The annual Airline Quality Rating report was released on April 2, 2007.  It found that on-time performance worsened across the industry with 75.5 percent flights arriving on time in 2006 compared with 77.3 percent in 2005.  More passengers were bumped from flights and more bags were lost or stolen last year than in 2005 as well.  Perhaps the most disappointing statistic from the report was that despite worse performances by the airlines in 2006, complaints held steady.  There were approximately 0.88 complaints for every 100,000 passengers, similar to 2005.  Experts agree that customers are lowering their expectations.

  The airlines are arguing that further government regulation is not the answer.  They lay out that airline operations are extremely complex, and that new, cumbersome regulations will not give them the flexibility they need to provide the best service.  They also argue that the current market forces are strong enough to change airline behavior. 

  I believe the jury is still out on their first point, but the second point is simply not the case.  Passengers need more information about their flight options.  If relevant airline performance information was presented to consumers when purchasing tickets and receiving their tickets, consumers would be in a better position to use this information to make educated travel decisions.

  It is for this reason that I have introduced the “Informed Air Traveler Act” today that would equip passengers with more information about their flight options.  Passengers should be able to easily access on-time data, cancellation rates, and other information on the flights they are thinking about taking.  Better informed travelers would make better decisions about which air carrier they will choose to get them to their destination in a timely manner.  That should mean more competition as well.  Airlines will have a greater incentive to improve their on-time performance if they know their customers will have this information and will be making purchasing decisions based on it.

  I am introducing this bill to get the debate going over what might be the best course of action necessary to reinvigorate competition among the airlines for not only price, but also the quality of service they provide.  I hope we can make changes that will help turn around the statistics that have been offered up by me and other members of the committee here today.

Testimony

• The Honorable Calvin L. Scovel III

  Inspector General

  U.S. Department of Transportation
  Read statement

  Testimony

  The Honorable Calvin L. Scovel III

  Statement of

  The Honorable Calvin L. Scovel III

  Inspector General

  U.S. Department of Transportation

   

  Mr. Chairman, Mr. Vice Chairman, and Members of the Committee:

  I appreciate the opportunity to be here today to discuss airline customer service.  This hearing is both timely and important given the recent events that occurred this past winter involving extended ground delays.  In some cases, passengers were stranded aboard aircraft at the gate or on the airport tarmac for 9 hours or more due to severe weather conditions. 

  It is also important to recognize that Secretary Peters has serious concerns about the airlines’ treatment of passengers during extended ground delays; as such, she requested that we examine the airlines’ customer service plans, contracts of carriage,[1] and internal policies dealing with long, on-board delays and the specific incidents involving American Airlines and JetBlue Airways when passengers were stranded on board aircraft for extended periods of time.  She also requested that we provide recommendations on what actions should be taken to prevent a recurrence of such events. 

  Currently, the debate is over the best way to ensure improved airline customer service:  either through voluntary implementation by the airlines, legislation, additional regulations, or some combination of these.  This is clearly a policy issue for Congress to decide.  Our testimony today is based on the results of our previous airline customer service reviews as well as our ongoing work.  I would like to discuss three key points dealing with actions that would help to improve customer service:

  ·  The airlines must refocus their efforts to improve customer service.  In November 2006, we reported^[2] that Air Transport Association (ATA)[3] airlines’ customer service plans were still in place to carry out the provisions of the Airline Customer Service Commitment that the airlines promised to execute.  These provisions include meeting passengers’ essential needs during long, on-board delays.  However, we found that the airlines must refocus their efforts on airline customer service by resuming efforts to self-audit their customer service plans, emphasizing to their customer service employees the importance of providing timely and adequate flight information, disclosing to customers chronically delayed flights, and focusing on the training for personnel who assist passengers with disabilities.

  ·  The Department should take a more active role in airline customer service issues.  Oversight and enforcement of air traveler consumer protection rules are the responsibility of the Department’s Office of General Counsel.  These rules encompass many areas, including unfair and deceptive practices and unfair methods of competition by air carriers and travel agents, such as deceptive advertising.  We found that while the Office has made efforts to enforce civil rights violations, it needs to improve its oversight of consumer protection laws, including its efforts to monitor compliance with the terms and conditions of enforcement actions.  In recent years, the Office has not conducted on-site compliance reviews, relying instead on self-certifications and company-prepared reports submitted by the air carriers without supporting documentation.

  ·  The airlines must overcome challenges in mitigating extraordinary flight disruptions.  This past winter’s severe weather events underscored the importance of improving customer service for passengers who are stranded on board aircraft for extended periods of time.  According to the Department’s Bureau of Transportation Statistics, approximately 722,600 flights were delayed in 2006 due to poor weather conditions (10 percent of all commercial flights).  Meeting passengers’ essential needs during long, on-board delays is a serious concern of Secretary Peters and the Department.  Therefore, she asked our office to examine the American Airlines and JetBlue Airways events of December 29, 2006, and February 14, 2007, respectively, and provide recommendations as to what, if anything, the airlines, airports, or the Government—including the Department—might do to prevent a recurrence of such events.

  Before I discuss these points in detail, I would like to briefly describe why airline customer service is a “front-burner” issue and highlight a few statistics on the development of the current aviation environment. 

  As this Committee is aware, airline customer service took center stage in January 1999, when hundreds of passengers remained in planes on snowbound Detroit runways for up to 8 and a half  hours.  After those events, both the House and Senate considered whether to enact a “passenger bill of rights.” 

  Following congressional hearings on these service issues, ATA member airlines agreed to execute a voluntary Airline Customer Service Commitment[4] to demonstrate their dedication to improving air travel (see figure 1), with provisions such as meeting passengers’ essential needs during long, on-board delays.

  
  

  Figure 1.  Provisions of the Airline Customer Service Commitment ·    Offer the lowest fare available. ·    Notify customers of known delays, cancellations, and diversions. ·    Deliver baggage on time. ·    Support an increase in the baggage liability limit. ·    Allow reservations to be held or cancelled. ·    Provide prompt ticket refunds. ·    Properly accommodate disabled and special-needs passengers. ·    Meet customers’ essential needs during long, on-aircraft delays. ·    Handle “bumped” passengers with fairness and consistency. ·    Disclose travel itinerary, cancellation policies, frequent flyer rules, and aircraft configuration. ·    Ensure good customer service from code-share partners. ·    Be more responsive to customer complaints.

  However, aviation delays and cancellations continued to worsen, eventually reaching their peak during the summer of 2000.  In 2000, more than 1 in 4 flights (26 percent) were delayed, with an average arrival delay of 51 minutes.

  Congress then directed our office to evaluate the effectiveness of the Commitment and the customer service plans of individual ATA airlines.                                              Source: Airline Customer Service Commitment, June 1999

  We issued our final report^[5] in February 2001.  Overall, we found that the ATA airlines were making progress toward meeting the Commitment, which has benefited air travelers in a number of important areas.  We found that the airlines were making the greatest progress in areas that are not directly related to a flight delay or cancellation, such as offering the lowest fare available, holding reservations, and responding in a timely manner to complaints.

  Although the ATA airlines made progress toward meeting the Commitment, we found that the Commitment did not directly address the underlying cause of deep-seated customer dissatisfaction—flight delays and cancellations.  This is still the case today.

  Since our 2001 report, the air carrier industry has faced a series of major challenges, including a weakened economy; the terrorist attacks of September 11, 2001; the Severe Acute Respiratory Syndrome epidemic; the war in Iraq; and soaring fuel prices.  As we reported in November 2006, the network air carriers generated about $58 billion in net losses from 2001 through 2005.  They have also made unprecedented changes to their operations to regain profitability.  Eight commercial air carriers have filed bankruptcy, two major air carriers have merged, and one has ceased operations. While four of the eight air carriers have emerged from bankruptcy, fuel prices continue to climb; this makes cost control a key factor in not only sustained profitability but also in overall survival of an airline.

  We revisited airline customer service issues to a limited extent following the December 2004 holiday travel period, when weather and other factors led to severe service disruptions in some parts of the country.  While our review[6] focused on the inconveniences experienced by Comair and US Airways passengers, we found that nearly half of all flights, system-wide, during the 7-day travel period were either delayed or cancelled, affecting hundreds of thousands of passengers. 

  Flight delays and cancellations continue as a major source of customer dissatisfaction.  A review of vital statistics shows the environment that air travelers faced in 2006 compared to peak year 2000. 

  Traffic and Capacity:

  ·  The number of scheduled flights (capacity) declined from 8.1 million in 2000 to 7.6 million in 2006, a drop of 6.4 percent.  Scheduled seats declined by 9.5 percent between 2000 and 2006, from 921 million to 834 million.

  ·  Even as the number of flights and scheduled seats declined, passenger enplanements were up nearly 7 percent, from 699 million passengers in 2000 to 745 million passengers in 2006.

  ·  Reduced capacity and increased demand led to fuller flights.  For 2006, load factors averaged nearly 80 percent for 10 of the largest ATA airlines, compared to average load factors of just over 72 percent for 2000.

  ·  Reduced capacity and higher load factors can also result in increased passenger inconvenience and dissatisfaction with customer service.  With more seats filled, air carriers have fewer options to accommodate passengers from cancelled flights.

  Flight Delays:

  ·  The number of delayed flights has declined from 2.09 million in 2000 to 2.02 million flights in 2006, a decrease of 3.5 percent. 

  ·  The percentage of delayed flights also declined from approximately 26 percent in 2000 to 25 percent in 2006.

  ·  Nevertheless, the average flight delay increased from 51 minutes in 2000 to 53 minutes in 2006.

  ·  While flight delays have declined nationwide since 2000, some individual airports experienced significant reductions in service and a subsequent reduction in delays.  However, traffic and delays continued to increase at other airports.  For example, between 2000 and 2006, George Bush Intercontinental/Houston Airport experienced a 27-percent increase in scheduled flights and a 55-percent increase in delays.  This increase is important to note because Houston added a new runway in 2003 at a cost of $267 million that was supposed to alleviate delays.  In comparison, Newark International Airport had a 3-percent reduction in scheduled flights but experienced a 34-percent increase in flight delays during this same time period. 

  Consumer complaints are rising.  While the 2006 Department of Transportation (DOT) Air Travel Consumer Report disclosed that complaints involving U.S. airlines for 2006 had declined by 6.6 percent (6,900 to 6,448) compared to complaints in 2005, February 2007 complaints increased by 57 percent (423 to 666) over complaints in February 2006, with complaints relating to delays, cancellations, and missed connections nearly doubling (127 to 247) for the same period.

  Over the last several years, DOT ranks flight problems (i.e., delays, cancellations, and missed connections) as the number one air traveler complaint, with baggage complaints and customer care[7] ranked number two and number three, respectively. As shown in figure 2, flight problems accounted for more than one-quarter of all complaints the Department received in 2006.

            Source:  DOT’s Air Travel Consumer Reports for 2006

  Historically, most chronically delayed and cancelled flights occur during the busy summer travel season—which will soon be upon us.  The extent to which delays and cancellations will impact passengers in 2007 depends on several key factors, including weather conditions, the impact of the economy on air traffic demand, and how existing capacity is managed at already congested airports.

  I would now like to turn to my three points on airline customer service.

  Airlines Must Refocus Their Efforts To Improve Customer Service 

  In June 2005, the Chairman of the House Subcommittee on Aviation requested that we follow up on the performance of U.S. air carriers in implementing provisions of the Commitment since the issuance of our 2001 report. 

  Unlike our prior work, which reviewed each provision, this review focused on selected Commitment provisions.[8]  We reviewed implementation of the selected Commitment provisions by the 13 current ATA member airlines; this included JetBlue Airways, which became an ATA member in 2001.  JetBlue has not adopted the June 1999 Commitment and does not consider itself bound by its provisions.  We also reviewed implementation of the selected provisions by two non-ATA airlines that are not signatories to the Commitment—AirTran Airways and Frontier Airlines.

  In November 2006, we reported that the ATA airlines’ customer service plans were still in place to carry out the provisions of the Commitment and that the Commitment provisions were still incorporated in their contracts of carriage, as we recommended in our 2001 review.  This is important because unlike DOT regulations, which are enforced by the Department and may result in administrative or civil penalties against an air carrier, contracts of carriage are binding contracts enforceable by the customer against the air carrier.

  However, we found that the airlines must refocus their efforts on airline customer service by taking the following actions.

  ·  Resuming Efforts To Self-Audit Their Customer Service Plans:  In our 2001 report, we recommended, and the ATA airlines agreed, that the airlines establish quality assurance and performance measurement systems and conduct internal audits to measure compliance with the Commitment provisions and customer service plans. 

  In June 2001 (about 5 months later), we confirmed that 12 of the 14 ATA airlines that were signatories to the Commitment had established and implemented their quality assurance and performance measurement systems.  In our 2006 review, however, we found that the quality assurance and performance measurement systems were being implemented at just five of the ATA airlines.[9]  The other ATA airlines had either discontinued their systems after September 11, 2001, or combined them with operations or financial performance reviews where the Commitment provisions were overshadowed by operational or financial issues.  We also found that the two non-ATA airlines we reviewed did not have comprehensive quality assurance and performance measurement systems or conduct internal audits to measure compliance with their customer service plans.

  A quality assurance and performance measurement system is necessary to ensure the success of the Commitment and customer service plans.  Therefore, the success of the customer service plans depends upon each airline having a tracking system for compliance with each provision along with an implementation plan for the Commitment.  These systems and audit procedures will also help DOT to more efficiently review the airlines’ compliance with the Commitment.

  ·  Emphasizing to Their Customer Service Employees the Importance of Providing Timely and Adequate Flight Information:  The ATA airlines committed to notify customers who are either at the airport or on board an affected aircraft of the best available information regarding delays, cancellations, and diversions in a timely manner. 

  All of the airlines included in our 2006 review made up-to-date information available about their flights’ status via their Internet sites or toll-free telephone reservation systems.  However, we still found that the information provided in boarding areas about delays and cancellations was not timely or adequate during our tests.  In 42 percent of our observations, airline gate agents did not make timely announcements (defined as approximately every 20 minutes) about the status of delays, and the information they provided was not adequate about 45 percent of the time. 

  This is one area where the airlines’ self-audits would be effective in monitoring compliance with the Commitment provision and their own internal policies.

  ·  Disclosing Chronically Delayed Flights to Customers:  On-time flight performance data should also be made readily available to passengers at the time of booking.  We recommended in our 2001 report that the airlines disclose to passengers at the time of booking—without being asked—the prior month’s on-time performance for those flights that have been consistently delayed (i.e., 30 minutes or greater) or cancelled 40 percent or more of the time.  We have recommended this several times, but none of the airlines to date have chosen to adopt it.

  Currently, the airlines are required to disclose on-time performance only upon request from customers.  However, the information that the agents provide about on-time performance through the airlines’ telephone reservation systems is not always accurate or adequate.  In 41 percent of our 160 calls to the airlines’ telephone reservation systems, we were told that the information was not available or the agents either guessed what they thought the on-time performance was or gave the data for only the previous day. 

  The on-time performance for consistently delayed or cancelled flights is readily available to the airlines.  Continuing to operate chronically delayed flights could potentially constitute a deceptive business practice.  Not disclosing such chronic delays on a flight could be viewed as contributing to such a deceptive practice.  Therefore, we continue to believe—as we recommended in 2001—that on-time performance should be disclosed at the time of booking for those flights that have been consistently delayed and should not require a customer request.

  ·  Focusing on the Training for Personnel Who Assist Passengers With Disabilities.  The needs and perspectives of passengers with disabilities are of paramount importance in providing satisfactory service.  This is especially true during extended flight delays whether the passengers are on board aircraft or in the airlines’ gate area.

  The ATA airlines committed to disclose their policies and procedures for assisting special-needs passengers, such as unaccompanied minors, and for accommodating passengers with disabilities in an appropriate manner. 

  In our 2001 review, the airlines performed well with respect to this provision.  However, in our 2006 review, we found that the majority of airlines (11 of 15) and their contractor personnel who interact with passengers with disabilities were not complying with the Federal training requirements or with their own policies.  In over 15 percent of the 1,073 employee training records we reviewed, airline employees were either not trained, not promptly trained, did not have records to support completion of training, or were not current with annual refresher training. 

  The airlines need to refocus their attention in this area and ensure that employees who assist passengers with disabilities are properly trained.

  The Department Should Take a More Active Role in Airline Customer Service Issues

  Oversight and enforcement of air traveler consumer protection rules are the responsibility of the Department’s Office of General Counsel.  These rules encompass many areas, including unfair and deceptive practices and unfair methods of competition by air carriers and travel agents, such as deceptive advertising. 

  In our 2001 customer service report, we recommended that the Department be given additional resources to investigate and enforce cases under its statutory authority, and Congress did so.  As part of our 2006 review, we examined how the Department has used the additional resources Congress appropriated to oversee and enforce air travel consumer protection requirements.

  We found that DOT was using its additional resources to oversee and enforce air travel consumer protection requirements with a focus on investigations and enforcement of civil rights issues, including complaints from passengers with disabilities.  But, when DOT discovered violations and assessed penalties, it almost always forgave the penalty if the air carrier agreed to mitigate the conditions for which the penalty was assessed.  DOT’s follow-up monitoring of compliance with these conditions was limited, and in some cases there was no follow-up monitoring at all.  In recent years, DOT has not conducted on-site compliance reviews, relying instead on air carriers’ self-certifications and company-prepared reports submitted without supporting documentation.

  We also found that DOT’s increased responsibilities—especially as they relate to civil rights issues—had diverted resources away from its other consumer protection activities, such as regular on-site consumer protection and related compliance and enforcement visits to airlines.

  Given the results of our 2006 review and the extended ground delays that stranded passengers on board aircraft this past winter, DOT should take a more active role in overseeing airline customer service. 

  The Airlines Must Overcome Challenges in Mitigating Extraordinary Flight Disruptions

  The airlines continue to face challenges in mitigating extraordinary flight disruptions, including long, on-board delays during extreme weather.  According to DOT’s Bureau of Transportation Statistics, approximately 722,600 flights were delayed in 2006 due to poor weather conditions (10 percent of all commercial flights).  For that same year, over 73,000 flights experienced taxi-out and taxi-in times of 1 hour or more.  The airlines, the Federal Aviation Administration (FAA), and the Department cannot prevent significant weather events.  What they can do, however, is work together to plan for such events and minimize the impact on passengers.

  This past winter’s severe weather events underscored the importance of improving customer service for passengers who are stranded on board aircraft for extended periods of time.

  ·  On December 20, 2006, severe blizzards closed Denver’s airport, causing several airplanes to divert to other airports.  United Airlines diverted two flights to Cheyenne, Wyoming.  The following morning, United’s flight crew and attendants boarded the aircraft and departed, leaving all 110 passengers behind to fend for themselves.

  ·  On December 29, 2006, the Dallas-Fort Worth area experienced unseasonably severe weather that generated massive thunder, lightning storms, and a tornado warning; this caused the airport to shut down operations several times over the course of an 8-hour period.  American Airlines diverted over 100 flights and many passengers were stranded on board aircraft on the airport tarmac for 6 hours or more.

  ·  On February 14, 2007, snow and ice blanketed the northeastern United States.  JetBlue Airways stranded scores of passengers aboard its aircraft on the tarmac at John F. Kennedy International Airport (JFK).  At 1 point during that day, JetBlue had 52 aircraft on the ground with only 21 available gates.  JetBlue has publicly admitted shortcomings in its systems that were in place at the time for handling such situations. 

  ·  On March 16, 2007, an ice storm hit the Northeast, causing numerous delays and cancellations and forcing passengers to endure long, on-board flight delays.  In fact, several Office of Inspector General staff were flying that day and experienced a 9-hour, on-board delay.   

  Meeting Passengers’ Essential Needs During Long, On-Board Delays Is a Serious Concern of Secretary Peters and the Department.  As a result of the
  December 29, 2006, and February 14, 2007, incidents; Secretary Peters expressed serious concerns about the airlines’ contingency planning for such situations.  On February 26, 2001, she asked our office to do the following:

  ·  Examine the airlines’ customer service commitments, contracts of carriage, and policies dealing with extended ground delays aboard aircraft.

  ·  Look into the specific incidents involving American and JetBlue, in light of whatever commitment these carriers made concerning policies and practices for meeting customers’ essential needs during long, on-board delays.

  ·  Provide recommendations as to what, if anything, the airlines, airports, or the Government—including the Department—might do to prevent a recurrence of such events and highlight any industry best practices that could help in dealing with such situations.

  Our work in this area began March 12, 2007, with site visits to JetBlue Airways in New York (including JFK) and American Airlines in Texas—specifically, Dallas-Fort Worth International and Austin-Bergstrom Airports.  During the past 30 days, we have done the following:

  ·  Collected voluminous amounts of information and data from American and JetBlue regarding the events of December 29, 2006, and February 14, 2007.  We are in the process of analyzing this information.  While we are in the early stages of our review, we can report that American and JetBlue have revised their operating practices for mitigating long, on-board delays.  For example, American instituted a new policy designed to prevent on-board delays from exceeding 4 hours.  JetBlue also set a time limit of 5 hours maximum duration for any long, on-board delay away from a gate.

  ·  Received information from other carriers providing service from Dallas-Fort Worth, Austin, and New York airports and met with officials from FAA air traffic control and those three airports.  We are in the process of receiving contingency plans from the ATA airlines (system-wide plans) and the major airports they serve (each airport operator’s plan).  

  We expect to brief the Secretary by the end of June and issue a report shortly thereafter.

  Airlines Must Implement More Effective Contingency Plans.  One observation we can share today regarding our current review is that contingency planning for extreme weather is not a new concern for airlines, as evidenced by the June 1999 Commitment provision, which states that:

  ·  The airlines will make every reasonable effort to provide food, water, restroom facilities, and access to medical treatment for passengers aboard an aircraft that is on the ground for an extended period of time without access to the terminal, as consistent with passenger and employee safety and security concerns.

  ·  Each carrier will prepare contingency plans to address such circumstances and will work with carriers and the airport to share facilities and make gates available in an emergency. 

  However, as we noted in our 2001 report, the airlines had not clearly and consistently defined terms in the Commitment provision such as “an extended period of time.”  We also noted only a few airlines’ contingency plans specify in any detail the efforts that will be made to get passengers off the aircraft when delayed for extended periods, either before departure or after arrival.  Our opinion was then, as it is now, that this should be a top-priority area for the airlines when implementing their contingency plans, especially with long, on-board delays on the rise from 2005 to 2006—particularly those exceeding 4 hours. 

  In response to our 2001 report recommendations, the airlines agreed to do the following:

  ·  Clarify the terminology used in their customer service plans for extended delays.

  ·  Establish a task force to coordinate and develop contingency plans with local airports and FAA to deal with lengthy delays.  

  While a task force was formed, the effort never materialized as priorities shifted after September 11, 2001.  We are examining airline and airport contingency planning as part of our ongoing review. 

  
  

  JetBlue and ATA Announced Initiatives To Address Long, On-Board Delays but More Needs To Be Done.  These two initiatives address the recent events.  First, on February 20, 2007, JetBlue published its own customer bill of rights.  JetBlue plans to offer compensation in the form of vouchers for flight disruptions, such as cancellations.  While this is a step in the right direction, this bill of rights is limited; JetBlue needs to clarify some of the terms.  The JetBlue bill of rights only addresses 3 of the 12 Commitment provisions:  flight delays and cancellations, on-board delays, and overbookings.  Also, JetBlue needs to clearly define all terms in its bill of rights, such as “Controllable Irregularity,” so that passengers will know under what specific circumstances they are entitled to compensation.  

  While JetBlue believes that its bill of rights goes beyond the Commitment provisions in some areas, re-accommodating passengers for flight cancellations is already required under its contract of carriage.  Additionally, while JetBlue will compensate its customers for being bumped from their flights, compensation is already required under an existing Federal regulation but not to the extent of JetBlue’s compensation of $1,000. 

  Second, on February 22, 2007, ATA announced the following course of action:

  ·  Each airline will continue to review and update its policies to ensure the safety, security, and comfort of customers. 

  ·  Each airline will work with FAA to allow long-delayed flights to return to terminals in order to offload passengers who choose to disembark without losing that flight’s position in the departure sequence.

  ·  ATA will ask the Department to review airline and airport emergency contingency plans to ensure that the plans effectively address weather emergencies in a coordinated manner and provide passengers with essential needs (food, water, lavatory facilities, and medical services).

  ·  ATA will ask the Department to promptly convene a meeting of air carrier, airport, and FAA representatives to discuss procedures to better respond to weather emergencies that result in lengthy flight delays.

  While we understand the pressures that ATA and its member airlines face in maintaining profitability in today’s environment, we are concerned that the actions proposed merely shift responsibility from ATA to the Department.  We agree that the Department must be an active partner, but ATA’s proposed course of action is not significantly different than what the airlines agreed to do in response to our 2001 recommendations, such as “to establish a task force to coordinate and develop contingency plans with local airports and FAA to deal with lengthy delays.”

  As mentioned earlier, how to ensure airline customer service is clearly a policy issue for Congress to decide.  Given the problems that customers continue to face with airline customer service, Congress may want to consider making the Airline Customer Service Commitment mandatory for all airlines. 

  However, there are actions that the airlines, airports, the Department, and FAA can undertake immediately without being prompted by Congress to do so.  For example:

  ·  Those airlines that have not already done so should implement quality assurance and performance measurement systems and conduct internal audits of their compliance with the Commitment provisions.  The Department should use these systems to more efficiently review the airlines’ compliance with those Commitment provisions governed by Federal regulation.

  ·  The Department should revisit its current position on chronic delays and cancellations and take enforcement actions against air carriers that consistently advertise flight schedules that are unrealistic, regardless of the reason.

  ·  The airlines, airports, and FAA should establish a task force to coordinate and develop contingency plans to deal with lengthy delays, such as working with carriers and the airport to share facilities and make gates available in an emergency.

  ·  The Department’s Office of General Counsel; in collaboration with FAA, airlines, and airports; should review incidents involving long, on-board ground delays and their causes; identify trends and patterns of such events; and implement workable solutions for mitigating extraordinary flight disruptions.

  That concludes my statement.  I would be glad to answer any questions you or other Members of the Committee might have.

  
  

  ---

  [1]   A contract of carriage is the document air carriers use to specify legal obligations to passengers.  Each air carrier must provide a copy of its contract of carriage free of charge upon request.  The contract of carriage is also available for public inspection at airports and ticket offices.

  [2]   OIG Report Number AV-2007-012, “Follow-Up Review:  Performance of U.S. Airlines in Implementing Selected Provisions of the Airline Customer Service Commitment,” November 21, 2006.  OIG reports and testimonies can be found on our website: www.oig.dot.gov.

  [3]   The Air Transport Association is the trade association for America’s leading air carriers.  Its members transport over 90 percent of all the passenger and cargo traffic in the United States.

  [4]   ATA signed the Commitment on behalf of the then 14 ATA member airlines (Alaska Airlines, Aloha Airlines, American Airlines, American Trans Air, America West Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, Midwest Express Airlines, Northwest Airlines, Southwest Airlines, Trans World Airlines, United Airlines, and US Airways).

  [5]   OIG Report Number AV-2001-020, “Final Report on Airline Customer Service Commitment,” February 12, 2001. 

  [6]   OIG Report Number SC-2005-051, “Review of December 2004 Holiday Air Travel Disruptions,” February 28, 2005.

  [7]   Complaints such as poor employee attitude, refusal to provide assistance, unsatisfactory seating, and unsatisfactory food service are categorized as customer care complaints.

  [8]   Our 2006 review focused on notifying passengers of delays and cancellations, accommodating passengers with disabilities and special needs, improving frequent flyer program issues, and overbooking and denied boardings.  We did not include the Commitment provision regarding on-time checked baggage delivery, which was subject to a hearing before the House Subcommittee on Aviation in May 2006.

  [9]   At the time of our 2006 review, quality assurance and performance measurement systems were being implemented at Alaska Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines.

• Mr. Michael W. Reynolds

  Deputy Assistant Secretary of Transportation for Aviation and International Affairs

  U.S. Department of Transportation
  Download Testimony (25.59 KB)

Witness Panel 2

• Ms. Kate Hanni

  Spokesperson and Founder

  Coalition for Arline Passengers' Bill of Rights
  Read statement

  Witness Panel 2

  Ms. Kate Hanni

  Written Testimony by Kate Hanni

  Executive Director, Coalition for Airline Passengers’ Bill of Rights

  Testimony to the Senate Committee on Commerce, Science and Transportation

  Wednesday, April 11, 2007

  Washington, D.C.

   

  My name is Kate Hanni and on behalf of the Coalition for Airline Passenger’s Bill of Rights, I’d like to thank Commerce Committee Chairman Inouye, Aviation Subcommittee Chairman Rockefeller, Senator Boxer and members of the Committee for the opportunity to address you today.

   

  I am here in part because of the cruel and inhumane manner in which my family and thousands of other stranded passengers were treated on several American Airlines flights during the holiday season of 2006 and more importantly, our mission to ensure that no other airline passenger has to endure our horrific ordeal ever again.  First, I want to offer a brief synopsis of what happened to us on December 29^th, 2006 and then I will inform the distinguished members of this Committee why we have formed this Coalition, our mission and what we hope Congress would do in order to safeguard the flying public.  

   

  We were headed to Point Clear, Alabama from San Francisco for a needed family holiday vacation, which started off much like our other trips since my husband and I are frequent business flyers, but what should have been a short trip turned into an odyssey that lasted more than 57 hours and almost 3 days. The most desperate hours of our ordeal - 9 to be precise – were spent stranded on the tarmac of Austin International Airport with no food, no running water, overflowing toilets and anger towards American Airlines for turning what was supposed to be a holiday vacation into a chaotic and traumatic experience -- one which I am certain the hundreds of passengers aboard our plane will never forget.  

   

  During those 9 exasperating hours, we were besieged by an overwhelming sense of fear and desperation, not knowing when and if we would ever be able to get out of the aircraft. Our pilot did the best he could under the circumstances, he reminded us to be patient, but after 9 hours of being held against your will in an airplane – knowing full well that we could have spent that time at least at the airport – we could no longer remain calm.  We had just had to endure the fowl stench of overflowed toilets for 9 hours as our ventilation was turned off. Some people with medical conditions such as diabetes ran out of medication, and others had no water with which to take theirs.

   

  We were and remain extremely angry and disappointed at American Airlines for having failed miserably at providing its passengers the very basic level of customer service during and after our horrific experience. According to thousands of e-mails and phone calls I’ve received since then, the same thing was happening in several other airports around the region. 

   

  Two days later when we finally arrived at our destination, I contacted my Congressman’s office asking for help. I explained that we were trying to reach American Airlines to finally receive some explanation as to how they can hold people on an aircraft for so long, but had received no response. Congressman Mike Thompson wrote a letter to Gerald Arpey, President of American Airlines, on our behalf. There was no response to that letter, other than a perforated post card several weeks later stating they had received our correspondence. That was the tipping point for me - I had had enough.

   

  As I began to contact the other passengers on our flight and other stranded flights in Austin, I realized the problem was much bigger than just the 3 or 4 American Airlines planes that we thought had been stranded.  My husband started a blog and a petition, forming the Coalition for Airline Passengers’ Bill of Rights. Since forming the Coalition, there has been an epidemic number of similar strandings just this year alone – similar situations, different airlines, different airports but with the same level of frustration and anger against an Airline Industry that puts the well-being and welfare of its passengers last and is much more concerned with their own bottom line.

   

  Members of the Committee - this is simply unacceptable!! 

   

  We all know about the Jet Blue Valentine’s Day strandings. One of the passengers, Michael Skolnik, a film producer trying to get to an important meeting in Los Angeles, was not only stranded on one jet for 11 hours, but when they finally deplaned them - shell-shocked and dumbfounded - he then sat for another 6.5 hours on another Jet Blue aircraft stuck to the tarmac, still trying to get to Los Angeles.  17.5 hours in two Jet Blue planes in one day?

   

  Then United Airlines stranded people at Chicago O’Hare for 8 hours in the middle of the night.

   

  Then, you have Philly and JFK strandings. One particular passenger, Rahul Chandron, was a second time victim having been on the Northwest Airlines incident in Detroit in 1999.

   

  The airlines say it’s improbable…evidently not.

   

  There is another crisis to address and it happened in Cheyenne and Scotts Bluff, Nebraska. 

  It’s abandonment by the airlines. Entire plane loads of diverted passengers were dropped off at an airport, not their destination, and left there with no resources. Roger Barbour was trying to get to his wedding when he was dropped in Cheyenne by United Airlines. It ended up costing him $3000.00 to get home.

   

  But that's not even close to being the full story. Airline and government agencies intentionally fail to maintain statistics for flights that never reach their destinations. So, if an airplane leaves the gate but never takes off, neither the airlines nor the government keep statistics about those flights – they’re just a single flight cancellation in the government’s book. That means there are no “time on the tarmac” statistics kept for the American Airlines December 29th diversions, Jet Blue and other flights that sat on the Newark, NJ tarmac for eleven hours in February, nor for the more recent flights that were held for over nine hours at JFK in March. To the Secretary of Transportation, it is as if they never happened!

   

  We found out that on December 29^th, 2006, due to thunderstorms over the Dallas/Fort-Worth area, in addition to our flight, 70 other flights were diverted from DFW to land at other regional airports.  Except for the people trapped on those runways like us and other members of our Coalition on other flights -- no one knows exactly how long all of those flights were held because there are no statistics kept. The reality is that airlines conveniently aren’t required to report the amount of time those planes sat on those runways.

   

  Why is the failure to maintain these statistics so important?  The problem may be orders of magnitude greater than delay statistics currently maintained by the government, but without valid statistics nobody knows the full extent of the problem, including our lawmakers. To get some idea, we can look to one statistic that is kept. Last year, 16,186 flights[1] were diverted to other airports.  Assuming at least 100 passengers per flight, that means over 1.6 million Americans may have experienced circumstances similar to the December 28, 2006 Austin debacle.  And those numbers aren’t reported anywhere!

   

  That is why, Members of the Committee – we have turned anger into advocacy – that is one of the few bright spots of our ordeal and the reason why I am here speaking in front of you today.

   

  It is with a great deal of determination that we have formed the Coalition for Airlines Passengers’ Bill of Rights.   In just three short months, we have become the fastest growing airline passenger’s organization in the country and our membership of 15,000 continues to expand.

   

  We know the airlines wish we would just go away. But there’s one key factor the airlines have discounted and that is the will and anger of airline passengers that are saying: Enough is Enough!

   

  This is why we are here today, urging members of this distinguished committee and Congress to adopt the Airline Passenger’s Bill of Rights and not let the airlines off the hook once again with their empty promises. After years of broken promises and declining customer service – as we saw once again in the latest Annual Airline Quality Rating Report - Congress must now step up and use FAA reauthorization legislation to ensure that airlines make passengers’ rights a top priority once and for all.  The last thing that we should do is provide more giveaways to the airlines and less accountability to consumers and Congress while airlines continue to strand passengers in communities all across the country.   In addition, I understand that the airlines’ plan for reauthorization would wrongly slash funds by $600 million, jeopardizing efforts to modernize our air traffic control system.  Safety and well-being should be our focuses, not tax breaks.

   

  The flying public needs a voice and legal recourse so that we can stop these horrific stories, experienced by thousands of stranded passengers, from happening once and for all.  For the last eight years and longer, the airlines have had the opportunity to make good on their promises to improve customer service and ensure basic rights for passengers. It’s time for Congress to ensure that airlines make passengers their top priority.

   

  Thank you once again for the opportunity to address Members of the Committee and for allowing me to share our story on behalf of the Coalition for Airline Passenger’s Bill of Rights.

  I am happy to answer any questions that you may have.

   

  ###

  
  

  ---

  [1] Source: http://www.transtats.bts.gov/HomeDrillChart_Month.asp?Sel_Year=2006&Arr_Del=1&Sel_Carrier=000&Sel_Airport=000&URL_SelectYear=2007&URL_SelectMonth=1

   

• Mr. Ed Mierzwinski

  Federal Consumer Program Director

  U.S. Public Interest Research Group, Federation of State PIRGs
  Download Testimony (38.76 KB)

• Mr. Rahul Chandran

  Program Coordinator

  Center on International Cooperation
  Read statement

  Witness Panel 2

  Mr. Rahul Chandran

  Testimony to the U.S. Senate Committee on Commerce, Science and Transportation

  Rahul Chandran

  April 11, 2007.

   

  Chairman Inouye, Vice-Chairman Stevens, Honourable Committee Members,

  It is an honor to testify today, and I thank you for the opportunity to discuss the need for improvements to airline services.

   

  Over eight years have passed since I was first stranded on a tarmac in Detroit, courtesy of Northwest airlines during the now infamous incident of January 1999.  I have not thought about the incident for many years, and I am sure that the honorable members of the Committee are familiar with the incident; I simply recall many hours of miserable monotony, unpunctuated by water or food, the frequent refusal to allow customers to use the ‘facilities’, and a complete lack of information or communication.

   

  In the furore that surrounded this incident, the airlines promised greater self-regulation, arguing that there was no need for legislative protection of passengers as the airlines had their best interest at heart.  The free round-trip ticket I received from Northwest as ‘compensation’ for the ordeal, I returned to Northwest.

   

  Shortly thereafter, in early 2000, I was on a United flight at Washington Dulles, during a sweltering summer day, for a short-hop up to New Haven, CT.  We left the gate, sometime around 1 p.m.  Approximately four hours later, having sat in a tiny turbo-prop, with neither water, nor access to the bathrooms – and certainly no clear information, we returned to a position near a gate, and the door was opened as the passengers were near rioting.  There were, I believe, no more than eight people on board this flight.  Eight people, trapped in a metal tube designed to retain heat, on the tarmac in the hot summer sun, without air-conditioning or refreshment for four hours, are still eight people on the boundaries of reasonable tolerance.

   

  On the 16^th of March, less than one month ago, and just one month after the series of incidents that affected Jet Blue, I arrived at JFK airport at 8 p.m.  Although there had been some snow, and earlier flight cancellations at other airports, the website for Cathay Pacific – the airline that was slated to carry me to Vancouver – suggested that flight 889 would take off as scheduled.  I came prepared, as several hundred thousand miles of flying have left me convinced that airline websites are rarely up-front about delays.

   

  After about two hours of waiting, we boarded the plane at midnight.  I exited the same plane at 9:43 a.m, nine hours and forty-three minutes after had left the gate.  The intervening period had been passed on the runway, waiting for de-icing fluid, waiting for gates to become available, waiting for taxi space – in short, waiting.  Waiting, that is, with our seat-belts securely fastened, our seat-backs upright and tray-tables stowed, and no ability to enjoy even the little – but important – comfort of the three-inch recline that economy class offers.

   

  Now in certain respects, this was the best delay I have ever encountered.  The captain was reasonably communicative about the delays, although his promises of a forty-five minute resolution were only reported as having failed after about an hour and a half.  The crew allowed passengers to use the restrooms, and offered us water.  Twice that is – once after about one hour, and once after six and a half hours.  Eventually, when the flight was cancelled – and prior to the last two hour wait for a gate – they fed us what was supposed to be our dinner.  Given that almost all the dining establishments in the terminal had stopped serving food around 10 p.m, this was a good ten and a half hours after most people had last had any food, during which they had been kept awake.

   

  So we were watered twice, fed once, and sent about our way.  Upon disembarking, we received a $15 voucher for food available at the terminal.  I chose not to wait any further, and went home.

   

  Honorable Senators, as I am sure you are all aware from your experiences, there comes a point when the consequences of a series of poor decisions accrete, and you have an intolerable outcome.  Plane delays happen – I continue to fly, and have been delayed in over 30 countries, for reasons that range from the real to the incredible.  Pilots need to respond to the profit-motive of their masters, and to make a good-faith effort to get their passengers off the ground, and airborne, safely.

   

  It is, however, clear to me through all of these experiences that the companies that run airlines have failed to implement management procedures that prevent the intolerable outcome – passengers trapped on airplanes for more than six hours. 

   

  We continue to fly because air-travel is part of the engine of economic growth that has made America the success story that it remains today.  A simple bill of rights that provides passengers with confidence that airlines will take care of their basic needs, prevents them from being confined in intolerable conditions, and ensures that airlines are responsible and held accountable for their actions will help to ensure that this remains the case.

   

  Thank you for your time.

• Mr. Kevin Mitchell

  Chairman

  Business Travel Coalition
  Read statement

  Witness Panel 2

  Mr. Kevin Mitchell

  Testimony of Kevin P. Mitchell

  Chairman, Business Travel Coalition

  Before the Senate Committee on Commerce, Science and Transportation

  Regarding Airline Service Improvements

   

  April 11, 2007

   

   

   

   

   

   

   

   

  Mr. Chairman and Members of the Committee, thank you for inviting the Business Travel Coalition (BTC) to testify before this Committee again and to today provide our views on the subject of airline passenger service. I am here representing the interests of corporations that purchase billions of dollars of commercial air transportation services, and dispatch millions of travelers each day. 

  Formed in 1994, BTC has consistently advocated on behalf of business travelers the need for improved airline service and has provided the Congress and U.S. Department of Transportation specific suggestions on how to ensure such improved service in the marketplace. However, federal legislation in this area is not needed and, in BTC’s view, would make matters worse, not better, in terms of reduced safety margins, more flight cancellations and higher airfares.

  BACKGROUND

  BTC testified in 1999 against proposed passenger rights legislation. The Coalition believed it was a bad idea then, and believes it still is today. Congressional mandating of customer service standards in any industry represents a dangerous precedent. In the case of the airline industry, such legislation would increase business travel costs, stifle innovation and raise safety issues.

   

  The proximate cause of the legislative initiative in 1999 was a Northwest Airlines’ plane and its passengers that had been stuck on the tarmac in Detroit during a horrendous snow storm in January of that year. Investigative reporters at The Wall Street Journal later uncovered that it was managerial incompetence manifest in a series of poor decisions that led to the customer service meltdown. That discovery certainly would not have appeased any passenger that was on that plane that day.

  THRESHOLD FOR LEGISLATION

  However, like the present day’s issue during recent storms in Texas and New York, these unfortunate incidents do not rise to a level of national seriousness to warrant federal laws governing airline industry customer service. Massive delays are unusual. According to the Bureau of Transportation Statistics, in 2006 just 36 out of 7.1 million commercial flights sat on the ground for five hours or more.

   

  In vivid contrast, an aviation issue that has reached the threshold of national seriousness, sufficient to warrant federal legislation, is, by way of example, that of outsourcing aircraft heavy maintenance to overseas contractors with less expertise, virtually no background checks on mechanics and woefully inadequate oversight. It is literally an accident waiting to happen.

  THE BULLY PULPIT

  This is not to say that Congress does not have an important role to play. Indeed, this hearing is timely in a much larger airline industry customer service sense. Progress at the beginning of the decade against airline voluntary customer service commitments was recorded for several quarters, but then fell off.

  Suddenly in early 2001, a fundamental marketplace shift caught the airlines off guard. Then the tragedy of September 11 and new security requirements struck, followed by SARS, the Iraq war, sky-high jet fuel prices and $40 billion dollars in losses. Painful restructurings eliminated more than 147,000 airline industry jobs — many were customer-facing. During this period, cutbacks in customer service and passenger amenities were implemented just for basic survival. Airlines, passengers, consumer groups, press and government all lost their focus on the industry customer service commitment.

   

  Indeed, it is time for airlines to refocus on customer service. Importantly, the U.S. Department of Transportation (DOT) is already moving on the issue. Secretary Mary Peters recently issued an urgent call for the department’s Inspector General to review the current state of airline customer service and to develop proposals to address any problems. In addition, the FAA is examining its own role in contributing to extended delays. For example, the confusion created during the New York storm by the varying interpretations of the FAA regulation concerning ice pellets.

  DOT, Congress, passenger groups and the press are a potent combination, a highly visible bully pulpit to inform consumers who in turn make purchasing decisions that drive the market.  Reporters and customers, for example, pounded JetBlue in the aftermath of its customer service fiasco. 

  “Thousands of fuming JetBlue passengers were grounded this weekend”…said the New York Post. “JetBlue red-faced over strandings at JFK” read a Star-Ledger headline. “In today's society we as citizens/customers have the opportunity to disrupt a company's reputation,” stated the founder of JetBlueSucks.net. “The cancellations raise new questions about whether JetBlue’s management is equal to its ambitions,” exclaimed the New York Times.

  MARKETPLACE SOLUTIONS

  In the marketplace for commercial airline services, customers do have choices and the power to effect change. In the case of JetBlue, the operational debacle cost it millions of dollars in near-term lost revenue and higher costs, and badly tarnished its superior customer service image. The effectiveness of management in responding with changes to policies and procedures will determine its future success. The marketplace is holding JetBlue accountable, and like competitors before them, the pounding has led to positive change with a passenger bill of rights and a compensation plan for inconvenienced customers.

   

  JetBlue’s CEO David Neeleman is a smart, world-class entrepreneur and an airline industry icon. He will be driven to make sensible adjustments for the benefit of his customers and shareholders. In the immediate aftermath of the terrible conditions American Airlines’ customers endured on December 29, 2006, during a storm that paralyzed air traffic in Texas, the airline implemented new policies and procedures. The infamous January 1999 debacle at Detroit, during a horrendous snow storm, led to structural changes at Northwest Airlines and the justification of a new runway at Detroit Metro Airport.

  THE PROBLEM WITH A LEGISLATIVE SOLUTION

  Legislation is not the answer. One proposal calls for the return of jets to gates after three hours. Consider this Friday afternoon scenario at O’Hare: arriving planes take up most of the gates, 50 jets are lined up, but unable to take off due to deteriorating weather. At the three-hour point, like a line of dominos, the aircraft become paralyzed in regulatory limbo with nowhere to go. The impact would ripple through the system. Travelers would be stuck in Chicago for the weekend; those in distant cities would likewise be stranded as their aircraft are at O’Hare. There is little doubt that such legislation would lead to higher airline staffing and operational costs, and increased business airfares.

   

  Another proposal would require compensation to passengers when airlines fail to deliver services as promised. This may be well intentioned, but it is an example of a dangerous idea with all manner of potential unintended consequences. It is imprudent to mix government-imposed financial incentives and penalties with airline operations, go, no-go decisions and safety judgments.

  On February 19, 2005, the No. 2 engine of a Boeing 747 failed after takeoff from LAX on a flight to Heathrow with 351 passengers on board. The captain decided to continue anyway with 3 engines. Because it was unable to attain normal cruising speeds and altitudes, the aircraft was forced to divert to Manchester, England. Under European Union passenger rights legislation, had the plane returned to LAX, BA would have had to compensate passengers some $250,000. BA denies that the penalty influenced its go, no go decision.

  A BTC survey underscores the safety concern. Of 144 corporate travel managers recently surveyed, only 10% would support a Passenger Bill of Rights in the absence of an ironclad guarantee that safety margins would not be decreased. There are safety concerns as well as questions regarding the efficacy of Congressional intervention. Consider this representative comment from survey participants:

   “Not to minimize this recent event, but let's focus on the millions of airline flights across America and the world that take place every day without incident. Do we really need the government legislating "common sense" customer service. No doubt, JetBlue will handle the bad publicity and attempt to appease those unfortunate passengers. No amount of vouchers or free tickets can undo their intolerable experience. How about we take a business approach and let the marketplace decide what retribution JetBlue should suffer, if any.”

  The Coalition has never adopted the premise of ideological purists who insist the marketplace will solve all of the travel industry’s ills. There’s a place for regulation. It’s just that it’s not in this arena, and not at this point.

  As aviation attorney Susan Jollie states, "The questions I wished politicians asked themselves are, 'Is there a significant persistent market failure that can only be remedied by government involvement?' And perhaps more importantly, 'Why do I believe that government personnel would have the necessary background, intelligence, integrity and dedication to make better decisions than those in industry whose role they would be taking over?'"

  STEPS GOVERNMENT CAN TAKE TO IMPROVE THE FLYING EXPERIENCE

  There are actions the federal government can take to improve the experience of the flying public.

   

  1.      Increase airline competition through open skies agreements and the promotion of new entrants such as Virgin America. Prevent radical consolidation of the airline industry. The greater the level of competition, the more influence the consumer has in driving the market and airline service improvements.

  2.      Invest in a new satellite system for air traffic control to reduce delays and improve system efficiency, especially during times of severe weather systems. Pass FAA reauthorization so that the government and the industry can head off a real crisis in passenger service.

   

  3.      Build more runways such as the Chicago O’Hare modernization, which BTC supported.

   

  4.      Insist on better, more inclusive decision making on rules promulgated by the FAA to prevent highly confusing and service degrading circumstances such as the ice pellet regulation.

   

  5.      Require greater DOT enforcement of existing carrier commitments and existing regulations and laws.

   

  While BTC believes that the airlines can and must do more to reduce delays and minimize consumer hardship during delays, we believe that federal customer service legislation would prove to be counterproductive and thus something BTC cannot support.

  …