The U.S. Senate’s version of the FAA reauthorization bill includes a provision authored by U.S. Senators Ed Markey (D-Mass.) and Richard Blumenthal (D-Conn.) that would regulate airline pricing models. The provision, already rejected by the Dept. of Transportation, is also known as the Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act.
Supporters contend the regulation will benefit consumers, but the reality is it would force airlines to abandon the successful business model that has made commercial air travel the most affordable it has been in more than 20 years.
Today, most travelers are offered flexibility at the point of sale via a fully refundable, flexible ticket that is more expensive; or they can choose a lower fare that requires a change fee if a change or cancellation to the itinerary is needed. Travelers are also given additional choices that allow them to only pay for what they want. Consumers who are traveling light are not paying for luggage space they are not using and those travelers who want the flexibility to rebook and cancel trips can pay for it. No longer are these costs baked into the airfare. Regulating airlines’ pricing models would force them to re-engineer their business models, which likely would harm the price-sensitive travelers.
FAIR Fees will limit consumer choice and make air travel less affordable for the average American.
- Consumer Choice: Eliminating the current change fee structure would take the power of choice away from the consumer and allow the government to implement a one-size-fits-all approach to airline pricing. Given the fact that consumers have very different preferences from flying for cheap to flying in luxury to last minute availability and flexibility, a uniform solution to airfare pricing does not meet the reality of what consumers demand.
- Airfares: Prohibiting or limiting change fees will force airlines to fold the cost of changes into the fare, which would result in the cheapest fares becoming more expensive for every single traveler.
- Risk service to many destinations: Eliminating change fees would lead to frequent last-minute changes, leaving seats on flights empty. This impacts business certainty and makes it harder for airlines to guarantee continued service to many small and medium-sized airports in every corner of the nation.
- Deregulation of the airline industry helped countless Americans have access to affordable airline travel for business, leisure, and family obligations. FAIR Fees would be a re-regulation of the U.S. airline industry and thus lead us back to a command economy in the skies that is accessible to only wealthy passengers and business travelers.
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