CLEVELAND — On the heels of a recent letter from 38 state attorneys general urging Congress to empower them to enforce consumer protections for airline travelers, a coalition of advocates including Public Interest Research Group released a new plan on Tuesday to eliminate the U.S. Department of Transportation’s (DOT) status as sole regulator of the airline industry. A federal preemption clause in the Airline Deregulation Act of 1978 gives the DOT full power to oversee the airlines.
“For decades, the Department of Transportation hasn’t been willing to regulate the airlines as strictly as it should and passengers have suffered, with airlines engaging in refund shenanigans, presenting deceptive prices, springing last-minute cancellations, and more,” said PIRG Consumer Watchdog Teresa Murray. “The airlines need to answer to others when appropriate. Eliminating federal preemption will be a step toward making the airlines more accountable to the customers they serve.”
The model legislation would give citizens the right to sue airlines and would endow state attorneys general, courts and legislators with enforcement abilities. A broad coalition of advocates besides PIRG endorsed it, including American Economic Liberties Project, Business Travel Coalition, Consumer Action, Consumer Federation of America, National Consumers League, Public Citizen and the Revolving Door Project.
Airlines canceled 42% more flights during the first half of 2022 than in all of 2021. Meanwhile, average domestic airfares are up 45% since 2019 and consumers are still waiting on $10 billion in unpaid refunds dating back more than two years. The airlines blame weather, air traffic control and staffing shortages for the delays and cancellations. However, they can look in the mirror for a primary source of the staffing shortages. After taking $54 billion in taxpayer bailout funds in 2020 — which specifically forbid laying off workers — they encouraged pilots and other key staff to retire early or take lucrative buyouts.
However, the DOT’s response to date has been minimal. The DOT proposed a rule to strengthen consumer protections on refunds that won’t take effect for at least two years, sent airline CEOs a letter and created an information dashboard. It has yet to fine any U.S. airline a single dollar for unpaid refunds, flight cancellations, or systematic violations of consumer protection law, and has issued fewer enforcement orders in 2021 than in any single year of the Trump and Obama administrations.
As a result of the Airline Deregulation Act, state attorneys general, state courts, and state legislatures do not have the same authority to regulate the airlines as they do with nearly every other industry. In addition, customers have fewer rights of recourse with airlines than with virtually any other sector in America. This means, for example, that if the DOT fails to hold the airlines accountable for refusing flight refunds, canceling flights at the last minute and charging fees for families to sit together inflight, consumers are powerless to act. The new model legislation recommends eliminating this 44-year-old federal preemption clause.
Our research partners at U.S. PIRG Education Fund analyzed the surge in consumer complaints in our report last December, Not First Class: Flyer complaints soar as airlines cancel flights, deny refunds, ruin plans. PIRG has put together a guide to your rights to a refund under federal law and tips to understand airlines’ policies on credits and vouchers, which flyers don’t have to accept when the airline cancels the flight.