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Joe Biden’s executive order corrects possible rules for aviation fees



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WASHINGTON – President Joe Biden’s administration is pursuing new rules to crack down on the fees charged by airlines, which travelers have long complained about are costly tackles for sometimes weak service.

Transport Minister Pete Buttigieg said Friday that his department will propose new rules that require refund of fees when luggage is delayed or when services such as the plane’s Wi-Fi or in-flight entertainment system do not work or are not provided.

The move is in line with a directive from Biden, which also ordered the department to consider rules that would require airlines to clearly disclose baggage, change and cancellation fees to consumers.

“Consumers deserve to receive the services they pay for or to get their money back when they do not,” Buttigieg said.

Biden’s breakdown of aviation taxes came in a sweeping executive order he signed Friday afternoon, targeting monopolies in industries that also include agriculture, technology, healthcare, banking and shipping. The executive order includes 72 initiatives, rules and directives involving more than a dozen federal departments to promote greater economic competition.

“Let me be very clear: capitalism without competition is not capitalism,” Biden said before signing the order in the White House State Dining Room. “It’s exploitation.”

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Existing federal law states that passengers are entitled to a fee if their checked bags are lost. The Department of Transportation’s proposal will also require airlines to refund checked baggage when delays exceed 12 hours for domestic flights and 25 hours for international flights.

Another proposed rule would require airlines to “immediately provide” a refund when additional services such as Wi-Fi are not provided.

If approved after a lengthy writing process, the new policies could take effect next year.

Other directives in Biden’s order seek to reduce the price of prescription drugs. This includes leading the Food and Drug Administration to work with states to safely import prescription drugs from Canada and new rules that make it possible to sell over-the-counter hearing aids in pharmacies.

The president also called on the Federal Trade Commission to remove certain employee licensing requirements – often burdensome for workers – and to ban or restrict companies from forcing employees to sign competition agreements that prevent them from exploring other employment.

“At least one in three companies requires their workers to sign a competition agreement,” Biden said, arguing that it was done “for a reason” – to keep wages low. “Let employees choose who they want to work for.”

The American aviation industry is dominated by four companies: American, Southwest, Delta and United.

“Reduced competition is helping to increase fees like baggage and cancellation fees,” the White House said in a statement. “These fees are often locked in, showing a lack of meaningful competitive pressure and are often hidden from consumers at the point of purchase.”

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The top 10 airlines charged $ 35.2 billion in fees in 2018, according to the White House, a massive increase from the $ 1.2 billion raised in 2007.

Lack of competition in the aviation industry “reduces incentives to provide good service,” the White House said, noting that airlines delayed delivering 2.3 million checked bags in 2019, according to data from the transportation department.

Airlines push back and argue that competition is ‘robust’

Travel Fairness Now, a consumer group, said Biden’s announcement would help curb airlines’ appetite for “pricing food and surprises.”

“After years of the powerful aviation industry that has got everything it wants at the expense of consumers, the administration and DOT’s actions are a long-awaited breath of fresh air for the flying audience,” said Kurt Ebenhoch, the group’s CEO, in a announcement. “The aviation industry is less competitive than at any time since deregulation, and this sensible consumer protection will start us down the road to restore justice for travelers. ”

Airlines pushed back on the White House characterization that the aviation industry gives consumers few options.

Airlines to America, representing seven major U.S. airlines, including Southwest, Delta, American and United, called competition in the aviation industry “robust” and said few industries offer consumers so many choices. It noted that two new airlines, budget carriers Avelo Airlines and Breeze Airways, debuted in a pandemic this year.

“Robust competition in the U.S. aviation industry has generated unprecedented levels of affordability and availability, benefiting the customer at all levels,” spokeswoman Katherine Estep said in a statement.

The trade group said airline competition has created “historically low air fares”, with inflation-adjusted ticket prices down 24% over the past decade.

Contributions: Staff Writer Dawn Gilbertson; Associated Press.

Reach out to Joey Garrison on Twitter @joeygarrison.


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