Joe Biden’s executive order guides possible rules for airline fees
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WASHINGTON – President Joe Biden’s administration is pursuing new rules to crack down on fees charged by airlines whose travelers have long complained are costly nails to sometimes lackluster services.
Transportation Secretary Pete Buttigieg said on Friday his department will propose new rules requiring reimbursement of fees when baggage is delayed or when services such as the plane’s Wi-Fi or the in-flight entertainment system malfunction or are not provided.
The move follows a directive from Biden, which also ordered the department to review rules that would require airlines to clearly disclose baggage, change and cancellation fees to consumers.
“Consumers deserve to receive the services they pay for or get their money back when they don’t,” Buttigieg said.
Biden’s crackdown on airfare came in an executive order he signed on Friday afternoon targeting monopolies in sectors that also include agriculture, technology, healthcare, banking, and government. maritime transport. The decree includes 72 initiatives, regulations and directives involving more than a dozen federal departments to promote greater economic competition.
“Let me be very clear: capitalism without competition is not capitalism,” Biden said before signing the order in the State Dining Room of the White House. “It’s exploitation.”
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Current federal law states that passengers are entitled to charges if their checked baggage is lost. The Transportation Ministry’s proposal would also require airlines to reimburse checked baggage when delays exceed 12 hours for domestic flights and 25 hours for international flights.
Another proposed rule would require airlines to “promptly provide” a refund when ancillary services such as Wi-Fi are not provided.
If approved after a lengthy regulatory drafting process, the new policies could go into effect next year.
Other guidelines in the Biden prescription are aimed at lowering the price of prescription drugs. This includes asking the Food and Drug Administration to work with states to safely import prescription drugs from Canada and new rules that would allow the sale of over-the-counter hearing aids in pharmacies.
The president also urged the Federal Trade Commission to eliminate certain employee licensing requirements – often onerous on workers – and to prohibit or limit companies from forcing employees to sign non-compete agreements that prevent them from explore another job.
“At least one in three businesses requires their workers to sign a non-compete agreement,” Biden said, arguing it’s done “for a reason” – to keep wages low. “Let workers choose who they want to work for. “
The US airline industry is dominated by four companies: American, Southwest, Delta and United.
“Reduced competition helps increase costs such as baggage and cancellation fees,” the White House said in a statement. “These fees are often increased at the same time, demonstrating a lack of significant competitive pressure, and are often hidden from consumers at the time of purchase.”
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The top 10 airlines collected $ 35.2 billion in fees in 2018, according to the White House, a massive increase from the $ 1.2 billion collected in 2007.
A lack of competition in the airline industry “reduces incentives to provide good service,” the White House said, noting that airlines were late delivering 2.3 million checked bags in 2019, according to data from the Ministry of transportation.
Airlines push back, claiming competition is “tough”
Travel Fairness Now, a consumer advocacy group, said Biden’s executive order would help curb airlines’ appetite for “chicane prices and surprise fees.”
“After years of the powerful airline industry getting everything they want at the expense of consumers, the actions of the administration and the DOT are a long-awaited breath of fresh air for the flying public,” said Kurt Ebenhoch, executive director of the group, in a statement. declaration. “The airline industry is less competitive than at any time since deregulation and these common sense consumer protections will allow us to restore fairness for travelers. “
Airlines have pushed back against the White House characterization that the airline industry offers few options to consumers.
Airlines for America, which represents seven major US airlines including Southwest, Delta, American and United, called competition in the airline industry “robust” and said few industries offer so much choice for consumers. . He noted that two new airlines, low cost carriers Avelo Airlines and Breeze Airways, have debuted in a pandemic this year.
“The fierce competition in the US airline industry has generated unprecedented levels of affordability and accessibility, benefiting the customer at all levels,” spokeswoman Katherine Estep said in a statement.
The trade group said competition from airlines has created “historically low airfares,” with inflation-adjusted ticket prices falling 24% over the past decade.
Contributing: Editor Dawn Gilbertson; Associated Press.
Contact Joey Garrison on Twitter @joeygarrison.