Could heavier regulation of the aviation industry be on its way? Let's hope so

The airline industry benefitted handsomely from the Airline Deregulation Act of 1978 which eliminated any government control over fares and routes. This left the commercial aviation industry open to pure market forces, meaning that airlines could compete as each saw fit. This led us down the path of immense consolidation which has pretty much run its course, with only a few major legacy carriers remaining.

With decreasing satisfaction coming from the crowded skies, there's been a renewed push to at least bring back some regulation of fees and other surcharges so that airlines can't squeeze customers for every possible dime for baggage, change fees and fuel. To the chagrin of fliers, lower fuel prices are expected to push airline profitability near record-levels, yet airline ticket prices haven't fallen

The monthly DOT Aviation Report Card shows a stubbornly high level of complaints, which adds to the frustration many feel with airlines. Given all of these issues, there are two organizations pushing for more control over how airlines price their products: FlyersRights and the Business Travel Coalition.

FlyersRights, which has already successfully lobbied for the airline passenger bill of rights, is fighting to:

• Reduce change fees on international flights,


• Reduce airfares generally due to lower jet fuel costs


• Amend the Airline Deregulation Act to remedy numerous abuses


• Curtail airline exemptions from consumer protection and antitrust laws.

The group wants airlines to be limited to a $100 change fee on international flights and also wants to eliminate the antitrust exemption that international airline alliances use to gain immunity from antitrust laws which exist to prevent pricing collusion.

The other team at work is the Business Travel Coalition, who just launched a new initiative with this letter to the DOT aimed at curbing excessive fuel surcharges. The BTC simply wants the DOT to enforce what it determined was the reasonable way to calculate fuel surcharges back in a 2012 Guidance:

When a cost component is described as a fuel surcharge, for example, that amount must actually reflect a reasonable estimate of the per-passenger fuel costs incurred by the carrier above some baseline calculated based on such factors as the length of the trip, varying costs of fuel, and number of flight segments involved.

BTC claims that U.S. airlines are no longer actually tying fuel surcharges to the cost of that fuel — an expensive issue, especially with foreign airlines such as JAL dropping fuel charges by nearly 50%, with a promise to recalculate every 2 weeks.

Airlines should wise up to the negative traveler sentiment, and start scaling back some of these blatant fee and surcharge excesses. As travelers become agitated, the likelihood of government interference increases — especially as travelers look at the rock-bottom oil prices and wonder why they aren't getting at least a small price break on airfare.