Will airlines’ automatic refund hurt consumers?

Just in time for summer travel, the United States Department of Transportation has announced sweeping changes that, on the surface, appear to help air travelers get the upper hand with airlines. Unfortunately, what the agency has proposed may hurt, not help, travelers at the very time when travelers need airlines to get them to their final destination.

The DOT issued a fact sheet outlining an extensive list of new requirements that affect what air travelers can expect from airlines the next time their flight is canceled or delayed.

Many of the changes make sense, like automatic refund of fees for checked baggage, in-flight internet connection and preferred seating. The cost to the airline would be processing such refunds, including credit card fees, which will likely lead to higher fees to absorb those costs.

The new policy gets problematic when a flight is canceled or delayed. If the airlines are required to issue a refund to the traveler, and the flyer unwittingly agrees to the refund, then they may be left to rebook their own flights, placing them in a precarious position. For example, this could involve paying a last-minute fare on another airline, rather than a lower advanced purchase fare, ultimately costing the traveler more money.

Airline interline agreements can be used to avoid these situations; they allow an airline to transfer a ticket to another airline.

Each situation, however, may need to be managed differently. If the flight cancellation or delay is due to a mechanical problem, then alternative flights would likely be available. If it is weather-related, then all airlines would be affected, with alternative options likely to be very limited or nonexistent. Of course, if such disruptions occur during peak travel periods, such as around the Fourth of July or the late-year holiday season, all such efforts are further complicated, given the limited availability of seats on most flights.

The solution that serves the best interests of travelers is to give them the choice of how they wish to be accommodated when a flight is canceled or delayed. However, many leisure travelers are ill-equipped to make good choices in real time during a flight cancellation or crisis, simply because they lack the necessary experience. That is why the primary objective should be to expeditiously get travelers to their destination, with the burden placed on the airlines to make this happen.

The DOT’s one-size-fits-all effort to protect travelers will not work. Giving the airlines the opportunity to spell out what they can offer and providing an environment to reach an amicable compromise will ultimately help travelers get what they need — namely, to reach their destination and be taken care of by airlines when circumstances disrupt their trip.

Sheldon H. Jacobson, Ph.D., is a professor in computer science at the University of Illinois at Urbana-Champaign. His research as a data scientist on risk-based security informed the design of the Transportation Security Administration’s PreCheck./Chicago Tribune/Tribune News Service



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