by Donald Wood
Last updated: 12:15 PM ET, Thu April 25, 2024
The American Society of Travel Advisors (ASTA) announced its
disappointment in the new
rules for airlines, which outline when to refund travelers for delays and
how to disclose fees properly.
“The Department of Transportation made a profound error in
this final rule,” ASTA President and CEO Zane Kerby said. “Our primary concern
for our members has always been the potential that regulations aimed at
protecting consumers could harm the small travel agencies who book air tickets.”
“And that is precisely what happened,” Kerby continued. “Travel
agencies sold 40 percent of airline tickets in 2023, and the DOT doesn’t
understand that in the limited situations where the agency is the merchant of
record, payment is immediately passed on to the airline.”
The updated regulations were approved by United States
President Joe Biden and the Department of Transportation (DOT) and now require American
carriers to provide “automatic cash refunds” within days of a flight being
delayed significantly or outright canceled.
Carriers and ticket agents must be transparent about charges
for checked and carry-on bags and canceling or changing a reservation. On
airline websites, all fees must be listed when travelers see the price and
schedule. The DOT estimates the new rules will save American travelers more
than $500 million annually.
In response, the ASTA revealed that merchant of record
ticket agents will be responsible for providing consumer refunds regardless of
whether they have the airline’s funds.
Despite years of effort to educate members of Congress and
the DOT, this final rule indicates a complete lack of understanding of how the
ASTA’s predominantly small-business community sells
airline tickets.
Kerby released an extended statement on the DOT’s decision
below:
“We agree with DOT that for far too long, consumers have
borne the brunt of airline bad behavior. Fortunately, those who use a travel
advisor know they have someone in their corner working tirelessly to obtain
their refund when travel plans go south. But to put the onus of providing that
refund on small business merchants of record will be catastrophic to this
industry. Merchant of record transactions make up a significant portion of
business for many small agencies in our industry, especially those who specialize
in group travel."
“This is a clear case of a federal agency overcorrecting a
problem. Now more than ever, we urge leaders in the House and Senate to
maintain Section 710 of the House bill to reauthorize the FAA [H.R. 3935] which
ensures ticket agents – nearly 80 percent of whom are female small business
owners – are not responsible for providing airline refunds when they are not in
possession of the funds.”
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