Wednesday, May 3, 2017

United, Other Airlines Warned by Lawmakers to Fix Customer Service: Airlines threatened with more regulation at House hearing after United passenger incident

The Wall Street Journal
By Susan Carey and  Doug Cameron
Updated May 2, 2017 3:07 p.m. ET


Lawmakers on Tuesday warned U.S. airlines they faced more regulation if they didn’t follow through with pledges to improve customer service following the widespread outcry over the treatment of a United Continental Holdings Inc. passenger last month.

Members of the House Transportation and Infrastructure Committee took broad swipes at airlines’ treatment of passengers and the impact of industry consolidation during a marathon hearing lasting more than four hours.

Lawmakers didn’t offer specific objectives airlines should reach to avoid Congress stepping in, beyond ending any forced removal of passengers because of overbooking, but called on carriers to put their houses in order.

“I don’t believe in reregulation, but Congress will not hesitate to act,” committee chairman Rep. Bill Shuster (R., Pa.) told the four airline representatives at the hearing. “If we don’t see meaningful improvements, I can assure you that you won’t like the outcome,” he said.

The hearing comes several days after United said it would change a number of its policies affecting customers, and after reaching a settlement for an undisclosed amount with passenger Dr. David Dao, who was injured when he was dragged off a United Express flight by Chicago aviation law-enforcement officers in April.

United Chief Executive Oscar Munoz, speaking in his first public appearance since the incident, told lawmakers that the event was “a turning point” for the airline. “Ultimately, our actions will speak louder than words,” he said.

He added that customers can expect “a constant stream” of changes, building on recently announced efforts to avoid overbooking and give staff more freedom to handle difficult situations.

Since the April 9 incident, which was captured on social media and sparked global outrage, airlines across the industry have come under scrutiny, forcing carriers to take steps to address customer dissatisfaction with policies such as involuntary bumping.

Domestic airline industry service was largely deregulated in 1978, allowing carriers to operate any route and set their own fares. But industry changes such as baggage fees and incidents such as lengthy airport tarmac delays have triggered some small moves to add back rules, as well as calls for more oversight.

Lawmakers’ questions on Tuesday ranged from airlines’ overbooking policies and fees to change flights to the size of aircraft seats, with some taking aim at the perceived lack of competition created by industry consolidation. More than 80% of domestic capacity is now in the hands of just four airlines, following megamergers since 2008.

Rep. Albio Sires (D., N.J.) asked Mr. Munoz: “Are you too big to manage your industry?”

The CEO responded that the large scale of his carrier’s network “allows freedom of choice” for consumers. Airline executives also pointed out that overbooking helped boost capacity and lower fares, responses that drew short shrift from one lawmaker.

“No low ticket price makes up for a miserable experience,” said Rep. Carolyn Maloney (D., N.Y.).

Massachusetts Democrat Michael Capuano, after a spirited discussion about personal frustrations with the travel experience, said he thinks United and the industry have addressed the immediate situation. “But we have a problem,” he said.

Lawmakers have lined up with calls for measures such as a revamped passenger bill of rights or proposed legislation to tackle issues raised by the United incident and wider consumer concerns about crowded planes and mounting fees for checked luggage and ticket changes.

Committee members said they have asked the Government Accountability Office to probe airline customer service, including disclosures made to passengers and their contractual rights. The U.S. Department of Transportation launched a review of United’s booking policies in the wake of the incident.

Some at the hearing said they preferred self-regulation. “I don’t think the government can solve your problems,” Rep. Rodney Davis, (R., Ill.) told Mr. Munoz. “That’s something you should do for your customers.”

In addition to United, other airlines have moved to make some changes. Southwest Airlines Co. said last week that it would end overbooking by the end of June, citing the United incident for a decision to move faster to get rid of the policy. Alaska Air Group Inc. said Tuesday it may follow suit. Southwest denied boarding to more passengers on an involuntary basis last year than American, Delta Air Lines Inc. and United combined.

William McGee, representing the Consumers Union, said at the hearing that it shouldn’t take a social media event like the United incident to drive airlines to improve their customer service.

The hearing gave some airline executives a chance to defend policies like overbooking. Scott Kirby, United’s president, said it allows the company “to take care of thousands of passengers we otherwise couldn’t accommodate.”

He cited a recent example of a United plane in India that had an engine problem, leading to a flight cancellation. United put a couple hundred passengers on other airlines, and then overbooked the flight the following day by 48 customers. Twenty-three of them took compensation to voluntarily fly the next day, he said.

Joseph Sprague, Alaska’s senior vice president of external relations, agreed, saying his carrier was able to make available 675,000 seats last year that wouldn’t have otherwise been available by overbooking. Those seats were used by last-minute business travelers and for extra customers caught up in weather or operational problems. He also said this practice helps keeps fares low.

Meanwhile, Kerry Philipovitch, American’s senior vice president of customer experience, said the airline’s overbooking rates have fallen since it introduced new measures including more staff with additional powers to avoid such situations. She said 50% of its denied boarding reflect operational factors such as aircraft changes or accommodating air marshals, rather than overbooking.

Lawmakers will return to the subject Thursday when the Senate Subcommittee on Aviation Operations, Safety and Security plans a separate hearing on consumer protections and the state of airline travel. The witness list of five includes Mr. Kirby, United’s president, and Ginger Evans, commissioner of the Chicago Department of Aviation, whose officers were called to deal with the situation on United Express Flight 3411 last month.

Original article can be found here:  https://www.wsj.com

8 comments:

Anonymous said...

There are two sides to this story - the other one is the breakdown of civility in this Country. I am not advocating for the airlines in any way, but their personnel surely cannot have an easy time of it dealing with what is becoming an increasingly surly public.

Anonymous said...

With all the issues confronting Congress they are going to waste time on this so they can have themselves seen voicing outrage at airline executives. Makes me ill.

Anonymous said...

I'd rather have them working on this than some boondoggle of a wall that would cost billions and do nothing.

Anonymous said...

I for one would like to know who paid for the wall around Obama's new pad.

Anonymous said...


It takes an act of Congress for airlines to treat their customers like humans. The next thing you know they'll be firing all of he battle axes..ah..I mean flight attendants.

Anonymous said...

It's very easy for irresponsible politicians to take cheap shots at company executives, but the reality is that United Airlines was not responsible for the treatment of Dr. Dao.

First of all, it was the Chicago Airport Police who dragged Dr. Dao from his seat, not United.

Second, Dr. Dao behaved like a real jerk refusing the order of the Chicago Police Officer to vacate the plane.

One who fails to obey the lawful order of a police officer should expect less than polite treatment.

Finally, the flight in question was operated by a United contractor, Republic Airlines, not United. United has unfairly gotten a bad rap

Anonymous said...

United Airlines invited Republic Airlines to the dance, so yes United is responsible.
United/Republic are the ones that set the chain of events in motion, so yes they are responsible.
The only people that would blame Dr. Dao are people that need to hang up their applets and retire. This is a new day and time, the old ways ain't going to cut it any more. I think Congress made that clear.

Anonymous said...

Smoke and Mirrors, political theatre.

Cut my taxes- lazy useless mouth breathing Congress-weasels.