For airlines, a turbulent summer in DC

For airlines, a turbulent summer in DC
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Regulators and lawmakers are increasingly taking aim at airlines, as allegations of misconduct swirl and complaints from passengers pile up following a series of mergers in the U.S. aviation industry.

In the last month alone, the Justice Department revealed it is investigating potential collusion among airlines to keep airfares artificially high and Congress raided the Transportation Security Administration’s coffers to help pay for a highway funding patch.

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Additionally, legislation has been introduced in the House to limit checked baggage fees and senators have criticized airlines for failing to properly inform passengers about fees on flight tickets.

Joshua Schank, president of the nonpartisan Eno Center for Transportation, told The Hill on Wednesday that airlines are an easy target for politicians who are trying to look like they are on the side of consumers.

"Going after airlines is something that you can do that does not cost you anything politically," he said. "It makes you like you're doing something constructive and you get some press for it."

The aviation industry has historically been one of the most effective lobbies in Washington, but lawmakers and regulators have shown a greater willingness to take on airlines in recent months.

The Department of Transportation said this week that the number of complaints against U.S. airlines from passengers is on the rise this year. The agency received 9,542 complaints about airlines between January and June of this year, compared to 7,935 during the same period in 2014.  

The Justice Department said last month that had launched a probe of potential antitrust law violations by airlines, after a string of high-profile mergers cut in half the number of major U.S. carriers.

The industry has steadfastly denied the collusion allegations.

"Our members compete vigorously every day, and the traveling public has been the beneficiary, as domestic fares are actually down thus far in 2015," the Washington, D.C.-based Airlines for America (A4A) group said in a statement.
 
Meanwhile, the industry took a hit in July when lawmakers needed money to help pay for an extension of federal highway funding. By tapping roughly $3.5 billion from fees that are paid by airline passengers to support the TSA, which itself has come under fire for a series of embarrassing security lapses, Congress effectively used money usually dedicated for the aviation sector to pay for projects on the nation’s roads and bridges.

Adding insult to injury, Rep. John Mica (R-Fla.), a former chairman of the House Transportation Committee, has introduced legislation to limit the amount that airlines can charge passengers for checking luggage to $4.50.

The measure would bring baggage fees down to the amount that airports are allowed to charge passengers to help pay for facility improvements because airlines have opposed an effort by airports to win a fee increase.  

Airlines have called the proposal “misguided.”

“Presented as consumer protections, these actions are anything but helpful to the customer,” A4A said, referring to the entirety of recent legislative and regulatory steps taken to crack down on the industry.  

“The government must embrace the importance of the commercial airline industry to the U.S. economy and the economic well-being of U.S. companies competing in the global economy, and must accept that the industry can, and should, be treated just like any other industrial sector, including being allowed the freedom to be profitable, to the benefit of employees, investors and customers.”

Yet Schank said Wednesday that the efforts by lawmakers and regulators to tweak airlines are unlikely to drastically alter the nation's aviation industry.

"None of them are dealing are with the real issue, which is that the airline industry has consolidated and competition has been greatly reduced," he said. "No one is talking about what the solution to that is going to be."  

Consumer groups have cheered the involvement of Washington in issues with airlines they have consistently complained about.

When a Senate report revealed last week that the airlines collected $38.1 billion in fees last year, Travelers United Chairman Charlie Loecha said in an email that the finding “echoes the same issues” his group had been talking to the DOT and lawmakers about for years.

Schank said Wednesday that it is important to address the competition issues that have arisen in the airline industry, but he argued that the "DOJ is the wrong place to take this one.“

"The DOJ and Congress should not be the ones deciding how to deal with the long-term problems with airlines," he said. "It should be the U.S. Department of Transportation."

Schank said the issues with airlines will have to be addressed by Washington at some point soon, however.

"The way it is looking right now, it's going to be an industry where prices are going to keep going up and services are going to go down," he said.