Air travel is rough. Here's how the government is trying to fix it.
Whether it’s a delayed flight, lost luggage, added fees or long security lines, flying can be rough. It’s gotten so bad the government is stepping in to try to make flying suck a little less. Here's how.
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00:00Whenever I book a flight, I sort of play through a sliding scale of unfortunate scenarios.
00:04I worry that my bag will get lost, or that my flight will be delayed,
00:08or maybe it'll just be cancelled altogether.
00:11The good news is that help may be on the way.
00:13The federal government is making some decent efforts to make flying suck a little less.
00:18Over the past few years, there have been some pretty high-profile airline meltdowns.
00:23So in 2022, Southwest had this giant breakdown and about 17,000 flights were cancelled
00:28and 2 million passengers were stranded.
00:30And this was in December, during the holiday season.
00:33So there's no one reason why airline travel sucks so much.
00:36But an important thing to look back on is that the airline industry was deregulated in 1978
00:41under Jimmy Carter.
00:43So before that, the government regulated airlines.
00:45They thought it was an essential service.
00:47They kind of controlled how much airlines could charge.
00:50Then, in the 70s, there was a movement to deregulate the airlines.
00:53The idea was that there would be more competition and prices would go down.
00:57To some extent, that's true.
00:59Once the airlines were deregulated, a bunch of new entrants jumped in.
01:03Prices did go down, but also the level of service has really changed.
01:07Business Insider's Emily Stewart has spoken with airline experts
01:10to help uncover the reasons for hiccups in the industry.
01:13We've also seen a lot of waves of consolidation of the airlines.
01:17So while there may be a lot of airlines,
01:19only a handful of airlines really kind of rule the industry.
01:23And that's Delta, American, United and Southwest.
01:26They control about 70% of the industry.
01:29So as much as it feels competitive, it's not.
01:32They kind of can do whatever they want in terms of booking, in terms of prices.
01:36They've also created these hubs that make it really hard for airlines to compete.
01:39You maybe experience this in real life where,
01:41let's say, you're going to a smaller location
01:43and you have to fly through this hub that's way out of the way.
01:46And part of that is because of deregulation.
01:48When airlines are left to their own devices,
01:50they don't always do what's best for their customers.
01:53Ultimately, they're for-profit companies.
01:56They answer to shareholders.
01:58And what that means is that they want to make as much money
02:00for their shareholders as they can.
02:02Not necessarily that they want to provide the best experience for their passengers.
02:06We probably need big structural change, I think, to really fix the airlines.
02:10But there is some help on the way right now
02:13with the Biden administration really trying to step in here and say,
02:16hey, airlines, you guys have screwed up a little bit too much.
02:19Now we have to be in charge a little bit more.
02:22This is sort of an ongoing cycle with airlines throughout their history.
02:25They screw up. Consumers complain.
02:27And finally, the government says, OK, we'll hop in and do something.
02:31So kind of the biggest thing that the Department of Transportation has done
02:34is to implement this new rule around cash refunds.
02:38What it basically says is, let's say you book a flight and it gets canceled
02:42or it's significantly delayed by many hours
02:45or it's significantly changed by many hours.
02:48The airlines have to issue an automatic refund
02:50and they have to do it in cash or credit card.
02:53Before, what a lot of them were doing, were issuing you a voucher
02:56and that kind of sticks you into a loop with an airline that maybe you're mad at, right?
03:01You are on a Delta flight, it gets canceled, you get a voucher.
03:04Suddenly you have to keep flying Delta
03:06and maybe you saw an American flight that would get you to your destination
03:10and you can't take that flight without spending more money.
03:14That rule also has a stipulation about returning money on airline services.
03:18So let's say you pay for Wi-Fi and plain Wi-Fi doesn't work
03:22or you pay for a seat and the seat is not available.
03:24The airline has to give you your money back.
03:27Congress also included this in legislation,
03:30specifically on the refunds on flight cancellation or delay.
03:33The airline industry honestly says that they're okay with the refunds thing.
03:37They say, we actually already do this a lot and we're on board.
03:41It's important to note that they are still sometimes issuing vouchers when they can.
03:45Over the summer, some of them got caught doing that
03:48and the Secretary of Transportation, Pete Buttigieg,
03:51issued a statement saying that they could no longer do that.
03:54It's another rule that the DOT is trying to put through,
03:56is one that is directed at junk fees,
03:59which is what the Biden administration calls it.
04:01That pertains to stuff like checking baggage
04:04or changing your reservation or buying a seat.
04:06And they're not saying that airlines can't charge these fees,
04:09but what they're saying is that they have to be honest about those fees up front.
04:13The reason they're saying that is if I'm booking a flight,
04:16and let's be honest, most of us are booking the cheapest flight that we can find,
04:20I'm trying to compare prices.
04:21And when the prices aren't put up front, it's hard to compare prices the right way.
04:26Maybe you see a flight for $200,
04:27but by the time you get through all the fees, it's $350.
04:31You would have been better off booking a different flight.
04:33The airline industry does not like this rule.
04:37They're actually challenged to get in court,
04:39and right now it is caught up in the courts.
04:41What they say is that it's really kind of outside of the jurisdiction
04:45of the Department of Transportation,
04:46and they also say it will confuse consumers.
04:49Basically, what their case is, is if a customer is on a travel website,
04:53and looking at all the fees,
04:54they will be too confused to be able to compare all the prices
04:57and understand what's going on.
04:58Honestly, you have to figure there's some sort of design fix for this.
05:02It can't be that hard, and it can't be that confusing just to tell me,
05:07hey, this flight does not include a bag, even on the flight,
05:10and if you want to bring a bag with you, it's going to be an extra $40.
05:13So that, again, is kind of caught up in the courts right now,
05:16and you also have to remember there are elections coming up,
05:18and the Department of Transportation is moving pretty quickly right now
05:22to get a lot of rules in place.
05:24But if there is a change in administration,
05:25it's not entirely clear where some of this stuff will end up.
05:28The DOT has also proposed a rule on parents sitting next to their children.
05:32Parents won't be charged to sit next to their kids, who are 13 and younger.
05:36Some airlines already do this, but not all of them.
05:39And I think it's fairly understandable for parents who have a kid
05:42who is 5 or 8 or 11 to want to sit next to their kid
05:46and not just hope that a kind stranger on the plane will switch seats with them.
05:50The rule has been proposed and hasn't been finalized yet,
05:53but the airline industry does point out that some airlines already do this,
05:57and all of them say that they make their best effort to seat families together.
06:02The DOT put together a dashboard that helps people compare
06:05different service fees across airlines.
06:07It tells you which companies let families sit together for free
06:11or rebook for free if there's a delay or cancellation
06:14that's within the airline's control.
06:16This obviously doesn't fix all of flying.
06:19Even for people who are super informed about their rights,
06:22it doesn't stop airlines from trying to hand over a voucher
06:24or charging a bunch of confusing fees.
06:26There are still plenty of problems with flying.
06:29For example, the FAA is short thousands of traffic controllers,
06:32and that affects scheduling as well as safety.
06:34And then there's a glitany of other issues.
06:36The airport is super expensive.
06:38Security lines can be long.
06:40You know, a lot of these changes that the Biden administration has made
06:44are kind of nice on the margins, right?
06:46I don't think anybody will argue with the idea
06:48that they'd like to understand fees a little bit better
06:51or that they should get their money back if they don't get on a plane.
06:55At the same time, we probably need some more structural changes,
06:58and that doesn't look like it's on the menu anytime soon.