Matthew Kandrach – President, CASE
September 7, 2018 – https://bit.ly/2x2JB5h
The first commercial airliner flew from Tampa to St. Petersburg in 1914, marking the beginning of the modern-day airline industry. Today, more than 2.5 million passengers each day at U.S. airports rely on air travel to attend business meetings, enjoy a family vacation, or join friends and family for weddings and graduations. With airfare near historical lows compared to twenty years ago, there’s never been a better time to travel.
Today, air travelers are benefiting from an improved and flexible ticket pricing system. No longer do consumers have a one-size-fits-all choice because fares are unbundled, allowing passengers to tailor the departure time, route, and upgrades. This flexibility is paramount when it comes to making consumers satisfied and well-served.
Yet, Sen. Ed Markey (D-Mass.) is proposing legislation he calls the FAIR Fees Act, which is currently a provision included in the Federal Aviation Administration reauthorization bill being debated in the Senate. However, Sen. Markey’s approach, which panders to consumers’ frustrations with air travel, isn’t fair nor would it reduce fees.
The FAIR Fees — or price controls — approach comes with many unintended consequences. For instance, change fees as we know them today would go away, ultimately diminishing flexibility and affordability. With the elimination of change fees under FAIR Fees, two things would likely happen. First, it could cause fares to become nonrefundable, restricting passengers from making changes. Second, it could also raise the cost of airline tickets entirely, because airlines would need to account up front for the potential costs incurred if a passenger wanted to make a last-minute change.
For most consumers, this would be frustrating at best, especially if you consider cost remains very important to three-quarters of air travelers. Prices would increase for the college student trying to take an earlier flight home after finishing exams. They’d go up for the family saving for a Disney World vacation. Costs would even increase for the business traveler who makes a regular trip from Chicago to visit customers in Des Moines.
And if fewer people decide to fly because of these changes, there could be other consequences: the elimination of flights or routes entirely. If airlines can’t consistently fill seats, especially to mid-sized or small airports, there may not be value to keep those routes going. This would hurt communities who rely on their local airport to support businesses, local jobs, and avoid the long travel time to the nearest airport.
Of course, it’s hard to know what other unintended consequences we may face. No matter what, though, the consumer will come out on the losing end, which should make FAIR Fees a non-starter in any bill.
We can — and should — do better than this. As the Senate debates the FAA reauthorization bill in the coming weeks, they must strike the FAIR Fees provision and stop this poorly thought-out idea from becoming law. Congress should promote consumer choice and protect the already existing flexibility in airline travel. In today’s ever-changing world, air travelers deserve the ability to choose the flights that work for them, not have the government make choices on their behalf.
