WASHINGTON, DC – Senator John D. (Jay) Rockefeller, IV, Chairman of the Senate Committee on Commerce, Science, and Transportation, today announced that he is seeking information from the top ten revenue generating U.S. passenger airlines about how they disclose certain additional fees to consumers when they are making ticket purchases.  Rockefeller’s inquiry also asks the airlines to provide information about internal policies aimed at protecting consumer information gathered during the ticket purchase process. 

In recent years, airlines have increasingly been charging fees for “optional” services, such as checked and carry-on luggage, seat selection, and priority boarding. These additional fees are separate from base fares for flights and have been a boon to the airlines, raising billions of dollars of revenue for them. Rockefeller’s inquiry builds on concerns raised recently by consumer advocates about whether these fees are sufficiently disclosed to consumers shopping for flights, in order to allow for true price comparison.  

Rockefeller, as Chairman, has made it a priority to raise awareness among consumers about the importance of protecting personal information they provide online. Earlier this year, he introduced The Data Security and Breach Notification Act that would – for the first time – provide a federal standard for companies to safeguard consumers’ personal information throughout their systems and to quickly notify consumers if those systems are breached.

Currently, there is no federal privacy law that covers the collection, use, and disclosure of consumer travel information.  Because of this gap in federal law, consumer advocates have expressed concern that airline privacy policies can contain substantial caveats and that it is difficult for consumers to learn what information airlines and others in the travel sector are collecting, keeping, and sharing about them. Rockefeller’s inquiry also seeks to address this concern.

A copy of the letter Rockefeller sent to the following airlines is below: 

United

Delta

American

Southwest

US Airways

JetBlue

Alaska

Hawaiian

SkyWest

Spirit

Dear Mr. Smisek,

One key sign of a healthy airline industry is its ability to address consumer concerns at all stages of the air travel experience.  Accordingly, consumer protection considerations are integral to the Committee’s work in reviewing and developing policies to promote a thriving U.S. airline industry.  To assist the Committee in its ongoing oversight of the airline industry, I write today seeking information concerning current air travel consumer issues.

          As you know, a number of new air travel consumer protection measures have been enacted and implemented over the past few years.  The Federal Aviation Administration Modernization and Reform Act of 2012 and several recent rules issued by the Department of Transportation (DOT) established limitations on lengthy tarmac delays, required additional airline disclosures concerning flight fares, and increased the compensation available to passengers when they are bumped from flights, among other initiatives.  However, the airline industry has been urging Congress to reverse certain provisions of the new DOT rules, and at the same time, consumer advocates have identified a number of issues that may not be addressed by existing laws and regulations.

          One major theme emerging from recent stakeholder debate on air travel consumer protections is the question of whether airlines provide passengers sufficient transparency in the ticket purchase process.  Specifically, consumer advocates have underscored the importance of price transparency in light of the recent trend where airlines have increasingly been separating from base airfare and specific “optional” fees for services such as carry-on bags and seat selection.  Ancillary fees constitute a growing source of revenue for U.S. airlines.  For example, between 2007 and 2013, total reported baggage fees rose from $464 million to $3.35 billion, and total reservation change fees rose from $915 million to $2.8 billion.

In order to effectively comparison shop, consumers need clear information about specific costs of various fees that may be added to the base fare.  While recent DOT regulations require airlines to disclose many of these fees on their own websites, consumers have raised concerns that fee disclosures can be confusing and difficult to compare as they are often presented as ranges instead of fixed amounts.  Further, the relationship between certain charges -- such as fees imposed when a passenger makes a reservation change well in advance of the flight -- and the cost of the transaction for which the fee is assessed is not always clear. Additionally, to date the full range of ancillary fee data generally has not been available at points of ticket sale other than direct purchase from airlines – an issue the rule proposed in May 2014 addresses regarding certain fees.

An additional transparency issue concerns how airlines handle personal information that they obtain from consumers through the ticket purchase process or otherwise.  Data collected during ticket purchase can include a passenger’s name, credit card numbers, date of birth, addresses, travel destinations, and travel companions, among other information.  No comprehensive federal privacy law currently applies to the collection, use, and disclosure of consumer travel information.  Consumer advocates have expressed concern that airline privacy policies can contain substantial caveats and that it is difficult for consumers to learn what information airlines and others in the travel sector are collecting, keeping, and sharing about them.

          To assist the Committee in its evaluation of these consumer protection issues, I ask that you respond to the questions below. 

(1) What role do ancillary fees play in your business model, and how has that role changed over the past decade?

(2) Currently carriers publicly report specific ancillary fee revenues only for baggage check and reservation change and cancellation, while reporting all other fees as part of the general category “miscellaneous and other accounts” that includes revenues from non-fee sources.  State your total revenues for 2012, 2013, and 2014 to date, and for the following specific categories, state the total revenues your company collected in each of the years 2012, 2013 and 2014, to date:

a.    Same-day change in flight with confirmed seat;

b.    Same-day change in flight on standby;

c.    Flight change/cancellation;

d.    Preferred seats;

e.    Priority boarding;

f.     Wi-fi pass;

g.    First checked bag;

h.    Second checked bag;

i.     One carry-on item;

j.     Advanced seat selection; and

k.    Trip insurance. 

(3) On the websites of the top U.S. carriers including your company, many fees for ancillary services beyond baggage check are listed as a range of dollar amounts instead of a single price.  For the following categories, list each specific price that may be offered within the range and the frequency each specific price is charged, and describe the circumstances under which each specific price applies:

a.    Flight change/cancellation;

b.    Same-day flight change with confirmed seat;

c.    Same-day flight change on standby; and

d.    Preferred seats. 

(4) For each of the categories below, state the fee your company charged on January 1, 2009; and if the fee has changed between that date and the present, state the date and dollar amount of each such change.  If more than one fee applies within a category (for example, depending on the length of a flight), list each such fee and identify the basis for the cost variable:

a.    Carry-on baggage;

b.    First checked bag;

c.    Second checked bag;

d.    Oversized bag (state size threshold and specify any subcategories within this category along with corresponding fees);

e.    Overweight bag (state weight threshold and specify any subcategories within this category along with corresponding fees);

f.     Flight change;

g.    Same-day flight change with confirmed seat;

h.    Same-day flight change on standby;

i.     Preferred seats;

j.     Priority boarding; and

k.    Wi-fi pass.

(5) Do you retain personal information that your company obtains from consumers when they shop for airfares or from other sources?  If yes:

a.    State the period of time your company retains such information and what specific data points you retain;

b.    State any specific sources for personal information or other such information your company obtains directly from consumers;

c.    Describe the privacy and security protections your company provides for personal information you maintain;

d.    State whether you provide consumers the right to (i) access the information you maintain about them and (ii) correct such information;

e.    State whether you sell or share this information, and if you do, describe what information you share, with whom you share it, and the purposes for which you share it; and

f.     Provide a copy of your company’s privacy policy and describe when and how you make this available to consumers.

For purposes of this question, the term “personal information” means identifiable information from or about an individual consumer including but not limited to:  (i) a first and last name; (ii) a home or other physical address, including street name and name of city or town; (iii) an email address or other online contact information; (iv) a telephone number; (v) a Social Security number; (vi) a driver’s license or other state-issued identification number; (vii) a financial institution account number; (viii) credit or debit card information; (ix) a persistent identifier, such as a customer number held in a “cookie,” a static Internet Protocol address, or processor serial number; or (x) any information that is combined with any of (i) through (ix) above.

Please respond to these questions by September 5, 2014.  Thank you in advance for your cooperation with the Committee’s review.

Sincerely,

John D. Rockefeller IV

Chairman

Enclosure

Cc:     John Thune

Ranking Member

###