November 20, 2007 - Peak-hour pricing--whereby airlines pay higher airport fees for departures and arrivals during the busiest times--and a set of consumer protections, including higher compensation for those bumped from oversold flights, were among the short- and long-term measures introduced last week by President George W. Bush as part of an effort aimed at reducing aviation congestion and improving air passenger customer services.
Transportation Secretary Mary Peters acknowledged that airlines would look to pass along the costs they may incur from higher compensation levels and peak-hour pricing, but suggested that new efficiencies--throughout the national aviation system and within each traveler's schedule--would counteract those costs.
The federal proposals came as the busy holiday travel season began. To ease short-term congestion before, during and following Thanksgiving (and probably Christmas), the government opened military airspace along the East Coast to commercial carriers. The idea is to allow airlines to proactively schedule flights through "rush lanes in the sky," as Peters described them, rather than rely on the dozen or so routes normally used between Maine and Florida, and for pilots to use those lanes to avoid bad weather and exceptional delays.
Separately, the Transportation Security Administration last week announced that airport security checkpoints "have optimized schedules and are prepared to accommodate the busy holiday travel season."
Despite those and other measures, Peters said Mother Nature could still have the last word. "If we get an ice storm up and down the eastern seaboard, it probably won't be pretty," she admitted. "But we're going to take every precaution we can to make sure that we can handle passengers and handle them well."
Longer-term proposals follow another bad summer for flight delays and come amid
Congress' work toward a Federal Aviation Administration reauthorization bill. "If we really want to solve this problem, it's time for Congress to modernize the FAA, and we've given them a blueprint to do so," Bush said.
Peak-pricing is one of the more controversial aspects. Also called "congestion pricing," the model would stipulate that "fees could be higher at peak hours and at crowded airports, or takeoff and landing rights could be auctioned to the highest-value flights," Bush explained. "Market-based incentives like these would encourage airlines to spread out their flights more evenly during the day, to make better use of neighboring airports and to move the maximum number of passengers as quickly and efficiently as possible."
He cited variations on the concept that seem to work well in other areas: electronic toll collection systems on highways and peak-hour rates charged by telecommunications and power companies.
Meanwhile, the administration proposed to double to amount of compensation entitled to passengers who are involuntarily bumped off oversold flights: $400 for being rebooked on a flight departing within two hours, and $800 if forced to wait longer.
When asked during a press briefing last week if congestion pricing and increased compensation for bumped passengers would translate to higher ticket prices, Peters said airlines "will pass some costs on, but the fact is, the customers are paying the price today with lack of reliability, lack of predictability, lack of knowing if they can get there on time. As we open up additional capacity--through congestion pricing--prices will even off. We'll see a leveling, so we don't see a long-term increase in prices."
The federal government is considering other new measures, including mandatory contingency plans for assisting stranded travelers, penalties for chronically delayed flights, requirements for airlines to respond to customer complaints within 30 days, audits on complaint resolution and more flight data on tarmac wait times. Separately, the U.S. Department of Transportation fined Delta Air Lines $115,000 "for failing to provide information on the on-time arrival performance of its flights when asked by consumers." The fines cover violations at Delta and regional affiliates Atlantic Southeast Airlines, Comair and SkyWest. DOT this year imposed similar, but smaller penalties on Hawaiian Airlines and JetBlue Airways.
Meanwhile, Peters and FAA acting administrator Roger Sturgell will report next month on congestion pricing discussions between federal officials, and the airlines and airport operators serving the New York metropolitan area. Noting that three-quarters of all delays and cancellations nationwide can be attributed to congestion in New York, Peters said the government is considering a reduction in peak flights at New York JFK, to "around 80 or 81," from a high last summer of more than 100.
In written testimony for a U.S. House of Representatives aviation subcommittee hearing last week, JetBlue Airways CEO Dave Barger said the 81 flight per hour threshold "is too low." Even so, the JFK-based carrier "reluctantly requested and strongly supports temporary flight caps at JFK to ensure that no hour is oversubscribed such that scheduled operations vastly outpace known capacity," he said.
Peters said the federal government soon would begin a rulemaking process to formalize several nationwide and airport-specific proposals. "By next summer, we want some of these longer-term solutions in effect," she said.
The Association of Corporate Travel Executives said the federal government's proposals "sound good" but do not address the root problem. "The White House is sidestepping the major source of congestion, the air traffic control infrastructure that has failed to keep pace with passenger demand," said executive director Susan Gurley. "Furthermore, the administration's new steps barely hint at the FAA's long-term responsibilities, and shift the blame to congress and 'market-based' solutions." Instead, Gurley said the White House "should propose a long-term solution to airport enhancement and ATC modernization, and ask the travel industry and the travel industry to meet it halfway in developing a workable interim congestion strategy."
Though airlines disfavor the added costs they would face in a peak-pricing model, their lobby group the Air Transport Association issued a statement supporting the Administration's efforts. ATA predicted a 4 percent increase in travel during the Thanksgiving holiday period, saying an estimated 27.3 million domestic travelers would take to the skies between Nov. 16 and Nov. 27.
Related resources:
Flight delay information provided by the Federal Aviation Administration
Airport security checkpoint wait times and other travel information, provided by the Transportation Security Administration
