Opinion A missed opportunity: The airline bailout should have come with consumer-friendly strings attached

20:31  26 march  2020
20:31  26 march  2020 Source:   bostonglobe.com

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a fighter jet sitting on top of a mountain: Tail fins of recently landed Delta Air Lines sit parked at Pinal Airpark March 18 in Red Rock, Ariz., as many passenger planes are being kept at the facility as airlines cut back on service because of the coronavirus COVID-19 pandemic. © Ross D. Franklin Tail fins of recently landed Delta Air Lines sit parked at Pinal Airpark March 18 in Red Rock, Ariz., as many passenger planes are being kept at the facility as airlines cut back on service because of the coronavirus COVID-19 pandemic.

Before the airline industry went into its current coronavirus tailspin, a consumer group was calling on airlines to allow children to sit with their parents for no additional fees. Senate Minority Leader Chuck Schumer was continuing his years-long quest to get passengers a bit more legroom, and Lee Page of the Paralyzed Veterans of America testified in front of the Committee for Transportation and Infrastructure about the difficulties he and other disabled passengers face navigating narrow aisles and barely-there airplane bathrooms.

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Most commercial airline passengers have a list as long as an Airbus A380 of things they’d like to see change about the flying experience. Up until early Wednesday morning, we had a chance to hold airline executives’ feet to the fire and perhaps see some of those requests become a reality as they asked the Trump administration for a $50 billion bailout. Nothing brings about accountability and change like a $50 billion carrot dangling in front of an industry.

The $2 trillion coronavirus stimulus packaged passed, giving airlines needed funds to stay in business, but in the hurried process, consumers lost their opportunity to attach strings to help make their travels less stressful.

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I’m not the only one who feels this way. An aviation consumer group called FlyersRights called upon the government to put a few conditions on any bailout. These requests were not frivolous, and most came at limited additional costs to the airlines. Perhaps, now that the bottom has fallen out of the industry, executives may still heed these calls in order to lure customers back. The FlyersRights requests include:

Limit ancillary fees: Cap fees for services such as checked baggage, seat reservations, and flight changes and cancellations to what is reasonable and proportional to the costs incurred by the air carrier. Globally, airlines made $109.5 billion in ancillary fees in 2019.

Restore the rights of consumers and state attorneys general to file suit against airlines: When air carriers engage in unfair or deceptive acts or practices, consumers and states should have the right to sue them. Currently, US law and US Department of Transportation regulations exempt airlines from lawsuits by passengers in most circumstances.

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End further constraints on passenger seating dimensions: I suspect this request is the most popular of the bunch as passengers often complain of feeling like sardines while seats and legroom continue to evaporate.

I’m in full agreement with the FlyersRights requests, and I have a few more conditions of my own that I believe should have been included in the bailout package.

Allow sick passengers to stay home without an exorbitant change fee, or any fee at all: I think this step is absolutely necessary if the travel industry is ever going to fully recover. Allow passengers to cancel within 72 hours of a flight, without a whopping change fee — or none at all — if they don’t feel well enough to travel.

Make access to the Internet free on all domestic flights: Some airlines, such as JetBlue, have been offering free Internet for years. Others, such as Delta, have tested and teased the idea, but most charge for Internet. In 2020, connection is important for many of us who work or need to keep in touch with loved ones while flying.

Fix the boarding process: Perhaps the most simple change of them all is to reduce the interminable process of boarding planes. The model has been studied by many, including rocket scientists. They have determined (surprise!) that the current front-to-back process is the least efficient. More efficient? You guessed it. Start boarding passengers back-to-front.

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Recognize and reimburse passengers who are inconvenienced for delays and cancellations: In Europe, the law is relatively straight-forward: If your flight is delayed more than three hours, you’re eligible to claim up to $700 for the waste of your time. The EU Regulation 261/2004 acts as reference in cases of flight disruptions. In the United States, airlines are not required to compensate passengers when flights are delayed or canceled.

I don’t think these demands are unreasonable, given that this is the second time the government has been called upon to bail out the airlines. A similar situation occurred after 9/11 took down the industry.

There is also a strong sentiment that the government should not have rushed to give airlines the requested $50 million bailout package, citing the fact that airlines have experienced soaring profits over the past decade. In 2019, the net profit of commercial airlines was projected to reach around $28 billion In 2018, airlines generated total operating revenue of almost $240 billion

So what happened to all those billions? Over the past decade, according to Bloomberg, US airlines spent 96 percent of their cash profits on stock buybacks to enrich investors and their own executives, whose positions often come with stock holdings. Realizing the error of their ways, or at least understanding that the check for $50 billion may not be in the mail if they didn’t change their ways, airline CEOs promised to stop stock buybacks and paying dividends in exchange for help from the federal government.

As infuriating as that is, it’s important to remember that the government was in a pickle. If the airlines faltered and caved, nearly 1 million jobs were at stake and consumer and cargo air travel would have been thrown into chaos. In addition to consumers, airline unions were also asking for accountability to accompany the bailout.

“The airline industry didn’t cause the pandemic and money should come with significant conditions to help workers and keep planes flying, not enrich shareholders or pad executive bonuses," said Sara Nelson, president of the Association of Flight Attendants, said last week. “It means no bonuses, no buybacks, and no breaking union contracts in bankruptcy.”

COVID-19 created an extraordinary and dire situation for the airlines, but the crisis should have been seen as a much-needed opportunity to finally make significant changes in the industry. Sadly, it appears that chance has left the runway.

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