Air travel is rough. Here's how the government is trying to fix it.

Business Insider

Whether it’s a delayed flight, lost luggage, added fees or long security lines, flying can be rough. It’s gotten so bad the government is stepping in to try to make flying suck a little less. Here's how.

Transcript

00:00Whenever I book a flight, I sort of play through a sliding scale of unfortunate scenarios.

00:04I worry that my bag will get lost, or that my flight will be delayed,

00:08or maybe it'll just be cancelled altogether.

00:11The good news is that help may be on the way.

00:13The federal government is making some decent efforts to make flying suck a little less.

00:18Over the past few years, there have been some pretty high-profile airline meltdowns.

00:23So in 2022, Southwest had this giant breakdown and about 17,000 flights were cancelled

00:28and 2 million passengers were stranded.

00:30And this was in December, during the holiday season.

00:33So there's no one reason why airline travel sucks so much.

00:36But an important thing to look back on is that the airline industry was deregulated in 1978

00:41under Jimmy Carter.

00:43So before that, the government regulated airlines.

00:45They thought it was an essential service.

00:47They kind of controlled how much airlines could charge.

00:50Then, in the 70s, there was a movement to deregulate the airlines.

00:53The idea was that there would be more competition and prices would go down.

00:57To some extent, that's true.

00:59Once the airlines were deregulated, a bunch of new entrants jumped in.

01:03Prices did go down, but also the level of service has really changed.

01:07Business Insider's Emily Stewart has spoken with airline experts

01:10to help uncover the reasons for hiccups in the industry.

01:13We've also seen a lot of waves of consolidation of the airlines.

01:17So while there may be a lot of airlines,

01:19only a handful of airlines really kind of rule the industry.

01:23And that's Delta, American, United and Southwest.

01:26They control about 70% of the industry.

01:29So as much as it feels competitive, it's not.

01:32They kind of can do whatever they want in terms of booking, in terms of prices.

01:36They've also created these hubs that make it really hard for airlines to compete.

01:39You maybe experience this in real life where,

01:41let's say, you're going to a smaller location

01:43and you have to fly through this hub that's way out of the way.

01:46And part of that is because of deregulation.

01:48When airlines are left to their own devices,

01:50they don't always do what's best for their customers.

01:53Ultimately, they're for-profit companies.

01:56They answer to shareholders.

01:58And what that means is that they want to make as much money

02:00for their shareholders as they can.

02:02Not necessarily that they want to provide the best experience for their passengers.

02:06We probably need big structural change, I think, to really fix the airlines.

02:10But there is some help on the way right now

02:13with the Biden administration really trying to step in here and say,

02:16hey, airlines, you guys have screwed up a little bit too much.

02:19Now we have to be in charge a little bit more.

02:22This is sort of an ongoing cycle with airlines throughout their history.

02:25They screw up. Consumers complain.

02:27And finally, the government says, OK, we'll hop in and do something.

02:31So kind of the biggest thing that the Department of Transportation has done

02:34is to implement this new rule around cash refunds.

02:38What it basically says is, let's say you book a flight and it gets canceled

02:42or it's significantly delayed by many hours

02:45or it's significantly changed by many hours.

02:48The airlines have to issue an automatic refund

02:50and they have to do it in cash or credit card.

02:53Before, what a lot of them were doing, were issuing you a voucher

02:56and that kind of sticks you into a loop with an airline that maybe you're mad at, right?

03:01You are on a Delta flight, it gets canceled, you get a voucher.

03:04Suddenly you have to keep flying Delta

03:06and maybe you saw an American flight that would get you to your destination

03:10and you can't take that flight without spending more money.

03:14That rule also has a stipulation about returning money on airline services.

03:18So let's say you pay for Wi-Fi and plain Wi-Fi doesn't work

03:22or you pay for a seat and the seat is not available.

03:24The airline has to give you your money back.

03:27Congress also included this in legislation,

03:30specifically on the refunds on flight cancellation or delay.

03:33The airline industry honestly says that they're okay with the refunds thing.

03:37They say, we actually already do this a lot and we're on board.

03:41It's important to note that they are still sometimes issuing vouchers when they can.

03:45Over the summer, some of them got caught doing that

03:48and the Secretary of Transportation, Pete Buttigieg,

03:51issued a statement saying that they could no longer do that.

03:54It's another rule that the DOT is trying to put through,

03:56is one that is directed at junk fees,

03:59which is what the Biden administration calls it.

04:01That pertains to stuff like checking baggage

04:04or changing your reservation or buying a seat.

04:06And they're not saying that airlines can't charge these fees,

04:09but what they're saying is that they have to be honest about those fees up front.

04:13The reason they're saying that is if I'm booking a flight,

04:16and let's be honest, most of us are booking the cheapest flight that we can find,

04:20I'm trying to compare prices.

04:21And when the prices aren't put up front, it's hard to compare prices the right way.

04:26Maybe you see a flight for $200,

04:27but by the time you get through all the fees, it's $350.

04:31You would have been better off booking a different flight.

04:33The airline industry does not like this rule.

04:37They're actually challenged to get in court,

04:39and right now it is caught up in the courts.

04:41What they say is that it's really kind of outside of the jurisdiction

04:45of the Department of Transportation,

04:46and they also say it will confuse consumers.

04:49Basically, what their case is, is if a customer is on a travel website,

04:53and looking at all the fees,

04:54they will be too confused to be able to compare all the prices

04:57and understand what's going on.

04:58Honestly, you have to figure there's some sort of design fix for this.

05:02It can't be that hard, and it can't be that confusing just to tell me,

05:07hey, this flight does not include a bag, even on the flight,

05:10and if you want to bring a bag with you, it's going to be an extra $40.

05:13So that, again, is kind of caught up in the courts right now,

05:16and you also have to remember there are elections coming up,

05:18and the Department of Transportation is moving pretty quickly right now

05:22to get a lot of rules in place.

05:24But if there is a change in administration,

05:25it's not entirely clear where some of this stuff will end up.

05:28The DOT has also proposed a rule on parents sitting next to their children.

05:32Parents won't be charged to sit next to their kids, who are 13 and younger.

05:36Some airlines already do this, but not all of them.

05:39And I think it's fairly understandable for parents who have a kid

05:42who is 5 or 8 or 11 to want to sit next to their kid

05:46and not just hope that a kind stranger on the plane will switch seats with them.

05:50The rule has been proposed and hasn't been finalized yet,

05:53but the airline industry does point out that some airlines already do this,

05:57and all of them say that they make their best effort to seat families together.

06:02The DOT put together a dashboard that helps people compare

06:05different service fees across airlines.

06:07It tells you which companies let families sit together for free

06:11or rebook for free if there's a delay or cancellation

06:14that's within the airline's control.

06:16This obviously doesn't fix all of flying.

06:19Even for people who are super informed about their rights,

06:22it doesn't stop airlines from trying to hand over a voucher

06:24or charging a bunch of confusing fees.

06:26There are still plenty of problems with flying.

06:29For example, the FAA is short thousands of traffic controllers,

06:32and that affects scheduling as well as safety.

06:34And then there's a glitany of other issues.

06:36The airport is super expensive.

06:38Security lines can be long.

06:40You know, a lot of these changes that the Biden administration has made

06:44are kind of nice on the margins, right?

06:46I don't think anybody will argue with the idea

06:48that they'd like to understand fees a little bit better

06:51or that they should get their money back if they don't get on a plane.

06:55At the same time, we probably need some more structural changes,

06:58and that doesn't look like it's on the menu anytime soon.

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