November 25, 2009
New Passenger Rights Enforcement
After years of successfully warding off federal passenger rights legislation and getting state-based initiatives invalidated under the 1978 Airline Deregulation Act, the airlines haven't overcome one enforcer: the Department of Transportation. Yesterday, the DOT levied $175k in fines to three carriers--including Continental Airlines--for the high-profile stranding of 47 passengers earlier this year. See Airlines Fined for Stranding Passengers, Wall St. J., Nov. 25, 2009, at D2 (available here). According to the DOT:
These precedent-setting enforcement actions involve consent orders that reflected a settlement by the carriers of violations alleged by DOT's Aviation Enforcement Office. They are the first enforcement orders punishing carriers for extended tarmac delays, as well as the first time a carrier acting as a ground handler for another airline has been punished for failing to properly help passengers leave an aircraft during an unreasonably long tarmac delay.
"I hope this sends a signal to the rest of the airline industry that we expect airlines to respect the rights of air travelers," said U.S. Transportation Secretary Ray LaHood. "We will also use what we have learned from the investigation to strengthen protections for airline passengers subjected to long tarmac delays."
Press Release, U.S. DOT, DOT Issues Precedent-Setting Fines for Rochester, MN Tarmac Delay Incident (Nov. 24, 2009).
Interestingly, neither the news story nor the official press statement indicated which regulation(s) the airlines were alleged to have violated. It is also not clear to what extent (if any) the DOT will take weather conditions or the country's antiquated air traffic control system into account when determining whether or not to impose penalties on airlines which experience delays. With the holiday travel season set to begin and the usual round of delays expected, the airlines have to be less than enthused about the DOT's new enforcement zeal.
November 23, 2009
WSJ on New Airline Labor Rule
As previously discussed on the blog, see here, the U.S. National Mediation Board is looking to remove a 75-year-old rule for railways and airlines which would favor the labor unions. Over the weekend, the Wall Street Journal ran an excellent commentary on the proposal. Blog readers should make a point to check it out. See Obama Union Rules, Wall St. J., Nov. 21, 2009 (available here).
BA/Qantas Still a Possibility
With the ink barely dry on its merger deal with Spain's Iberia, British Airways CEO Willie Walsh told the Financial Times that a merger with Australia's Qantas could still happen (though no timetable was provided). See Rebecca Keenan & Tim Smith, BA Still Keen on Tie-Up With Qantas, Sydney Morning Herald, Nov. 24, 2009 (available here). In his interview, Walsh stated that political opposition to the deal within Australia constitutes a "major hurdle."
That's not the only hurdle, however. When a BA/Qantas merger was first discussed last year, observers pointed out that a foreign ownership profile for the Australian airline could compromise its right to be designated under Australia's bilateral air services agreements with such important partners as Japan. Given its long history of air transport protectionism, it's no surprise that Japan was absent from last week's Agenda for Freedom Summit sponsored by the International Air Transport Association. With Japan still refusing to sign an open skies agreement with the U.S. and still committed to limiting airport access to foreign carriers, there is no evidence that it is inclined to begin waiving the restrictive nationality clauses in its bilaterals.