Recent news headlines relating to air travel have demonstrated the aviation industry’s refocus on passenger experience and consumer protection issues. Airlines are working hard to address scenarios that may affect the passenger experience during air travel today, including remediating weather delays and personnel-related issues. The Biden Administration has made consumer protections in the aviation industry a priority issue. For example, we covered the U.S. Department of Transportation’s (DOT) May 2023 launch of a new platform for passengers to communicate with DOT about airline travel issues they encounter. DOT Secretary Pete Buttigieg has also announced the DOT’s commitment to consumer protections, and consumer protections provisions, are included in Congress’s reauthorization bills for the Federal Aviation Administration.
Our review of recent enforcement orders issued by the DOT demonstrates that the DOT is enforcing these consumer protection commitments with assessment of civil penalties against airlines. The DOT generally assesses civil penalties against airlines following the receipt of a consumer complaint and subsequent proceedings. The DOT’s Office of Aviation Consumer Protection reviews and responds to consumer complaints and may determine that an enforcement action is warranted after considering all the facts in a case. Our review of the enforcement orders issued by the DOT Office of Aviation Consumer Protection in its public database from 2021 to July 2023 demonstrates that approximately 86% of the enforcement orders relate to consumer protections violations by airlines or airline ticketing agencies.
According to our review of the DOT’s enforcement orders, the most common consumer protection violations relate to airlines’ failure to provide timely refunds to passengers whose tickets the airline cancelled or significantly changed allegedly in violation of a U.S. law relating to “unfair and deceptive practices.” In 2020, the DOT published a final rule defining the terms “unfair” and “deceptive” for the purposes of the law. Under this rule, a practice is “unfair” to consumers if it causes substantial harm to consumers, the harm is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition.
For failures to provide a timely refund, two factors appear to notably impact the amount of a civil penalty against an airline: (1) the number of passengers affected, and (2) the duration of time that passengers waited for a refund. For example, in one case, the DOT received approximately 1,900 complaints and found that the airline in question took more than 100 days to provide refunds to a majority of the complainants. This case resulted in a substantial civil penalty against the airline of $1.4 million. In another case, approximately 700 consumers complained of an airline’s failure to provide a timely refund for more than 100 days, and the resulting civil penalty against the airline was $750,000. Not surprisingly, the civil penalty issued by the DOT generally increases proportional to the number of passengers affected and the length of the delay in providing a refund.
It is worth noting that, the DOT’s decisions indicate that even the COVID-19 pandemic and resulting governmental restrictions may not constitute a sufficient excuse for an airline failing to provide a timely refund. In one such case, the DOT received “thousands” of consumer complaints relating to an airline that cancelled or significantly changed flights due to the COVID-19 pandemic and associated governmental restrictions. In its review, the DOT found that, among other facts, thousands of passengers were left waiting for “many months” before receiving refunds to which they were entitled. Despite the burden of the pandemic and associated restrictions on the airline, the DOT issued a civil penalty of $1.1 million against the airline.
Lengthy tarmac delays (deplanement)
The second most common violation found in DOT enforcement orders from 2021-July 2023 relates to airline procedures for lengthy tarmac delays. U.S. law requires covered U.S. carriers and foreign air carriers with a seating capacity of 30 or more seats to adopt, implement, and adhere to “contingency plans” for lengthy tarmac delays for large hub, medium hub, small hub and non-hub airports. In general, the law requires that for domestic flights, U.S. air carriers must provide passengers the opportunity to deplane before the tarmac delay exceeds three hours. For international flights, carriers must provide a passenger the opportunity to deplane before the tarmac delay exceeds four hours in duration. As part of the contingency plan, the carrier must also provide lavatories, and after two hours of delay, adequate food and water.
Similar to the fact patterns for timely refund violations discussed above, the amount of civil penalty assessed by the DOT for lengthy tarmac delays generally takes into account (1) the number of passengers affected and (2) the duration of delay. In one case, an airline permitted an international flight to remain on the tarmac for over five hours without providing the 268 passengers onboard the aircraft the opportunity to deplane. The resulting civil penalty assessed by the DOT amounted to $225,000. In another case, an airline failed to provide passengers the opportunity to deplane on two different instances despite delays exceeding the specified time limits where the opportunity to deplane must be offered. Although the delays in these instances were partially weather-related, the DOT found that the airline’s actions resulted in the prolonged deplanement because in the first instance, the airline failed to notify the arrival airport of its delayed takeoff. In the second instance, the DOT found that the airline knew or should have known that de-icing could not be accomplished before exceeding the delay window provided in the airline’s contingency plan. The total number of passengers affected in both instances was 471, and the resulting DOT fine against the airline was $300,000.
DOT’s summary of airline complaint data
It is clear that consumer protections are at the forefront of DOT priorities as it relates to air travel. On August 2, 2023, the DOT released a summary of airline complaint data from February 2023. This summary relates to all airline complaints, as opposed to just those resulting in a civil penalty, but the DOT’s discussion of this data nonetheless demonstrates the DOT’s continued focus and commitment to consumer protections for passengers.
The summary released by the DOT revealed that in February 2023, the DOT received 6,644 airline service complaints from consumers. Of the 6,644 complaints, 66.3% were against U.S. carriers, 29.0% were against foreign air carriers, and 4.7% were against travel companies. As to the type of grievance, 31.8% concerned cancellations, delays, or other schedule deviations. Refunds were the second-highest category of complaints, amounting to over 21% of the consumer complaints. In its announcement accompanying the release of the data, the DOT cautioned that it was taking note of this data, announcing that the DOT “has taken and will take enforcement action against noncompliant airlines and ticket agents as necessary.”
As airlines continue to increase their focus on customer service to improve the passenger experience, it also is worth keeping in mind the DOT’s readiness to pursue enforcement actions for alleged violations of U.S. law. The abundance of enforcement actions, particularly in the areas of ticket refunds and tarmac delays, demonstrates that the DOT is dedicating resources toward enforcing consumer protection laws.