Why Biden's executive order targeting airlines is a big deal for passengers

Amid a summer of cancellations, delays and generally unpleasant air travel, the Biden administration has fixed its gaze upon the airline industry.

© Scott Olson, Getty Images

A passenger arrives for an American Airlines flight at O’Hare International Airport on February 05, 2021 in Chicago, Illinois. 

On Friday, President Joe Biden signed a wide-ranging executive order geared towards promoting competition across various sectors of the United States economy. A portion of the order directs the Department of Transportation (DOT), currently headed by Secretary Pete Buttigieg, to consider tightening regulatory screws on large airlines and their handling of refunds and fees.

“It’s clear from reading the fine print of the executive order that the White House understands the fundamental problem with consolidation in the airline industry, where the four biggest airlines — Southwest, United, American and Delta — control over two-thirds of the market and all act in lockstep in raising fees,” said Bill McGee, aviation and travel adviser for Consumer Reports’ advocacy arm. “The White House gets it, it seems, and we applaud them for being proactive with the airline industry.”

As vice president in 2010, Biden was famously caught on a mic referring to the passage of the Affordable Care Act as a “big f—ing deal,” and McGee believes Biden’s executive order also reaches “BFD” status for airlines.

The order directs the DOT to “consider issuing” clear rules for airlines on two areas in particular:

– Refunds for passengers when a service is not provided, (e.g. baggage is delayed, WiFi and/or in-flight entertainment does not work)

– Requiring baggage, change and cancellation fees to be clearly disclosed to customers

“We’re grateful the Biden administration issued this order, but it’s absurd we even have to talk about the airline industry charging fees for services they didn’t even provide,” McGee said. “The fact that they don’t provide services routinely shows just how far gone the airline industry is. We have concerns about fees that are much broader than what’s included in the executive order we plan to talk to Secretary Buttigieg about.”

McGee cited two areas of importance the executive order did not mention: Refunds for COVID-19-related cancellations and additional fees that families pay to ensure they are seated near their children.

In the early months of the pandemic in 2020, the DOT sent frequent warnings to airlines that they must abide by the DOT’s longstanding rule: if the airline, and not the passenger, cancels a flight, the airline must provide a full refund. Despite a wave of airline-initiated cancelations this summer (often attributed to staffing shortages), the Biden administration hasn’t issued similar warnings and members of Congress have called on Buttigieg to do more. Yet the Biden executive order does not call for more rigorous enforcement of the cancellation refund rule.

“The other big issue is airlines collecting fees for families with young children to sit together, which is one of the most egregious things we see in the airline industry,” McGee said. “In 2016, Congress directed the DOT to prohibit airlines from charging families with kids under 13 to sit together, but under the Trump administration, Secretary Elaine Chao found a loophole and said the DOT is not going to be doing anything. We’ve gone through 150 complaints and some of them are really horrific, where kids as young as two, three and four had to be seated separately unless their families paid a fee.”

McGee said his colleagues at Consumer Reports hope to speak with Secretary Buttigieg sometime in the near future on further action the DOT can take. He added that he’s optimistic the existing executive order could mark a turning point in air travel regulation.

“Not to take anything away from the executive order, but there’s lots of work that still needs to be done,” he said. “But we’re heartened because the order shows the president and the secretary are serious about fighting for consumers. So our stance is, ‘We’ve got a lot of work to do, so let’s get to it.'”

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