Statement of The Honorable Calvin L. Scovel III Inspector General U.S. Department of Transportation Mr. Chairman, Mr. Vice Chairman, and Members of the Committee: I appreciate the opportunity to be here today to discuss airline customer service. This hearing is both timely and important given the recent events that occurred this past winter involving extended ground delays. In some cases, passengers were stranded aboard aircraft at the gate or on the airport tarmac for 9 hours or more due to severe weather conditions. It is also important to recognize that Secretary Peters has serious concerns about the airlines’ treatment of passengers during extended ground delays; as such, she requested that we examine the airlines’ customer service plans, contracts of carriage, [1] and internal policies dealing with long, on-board delays and the specific incidents involving American Airlines and JetBlue Airways when passengers were stranded on board aircraft for extended periods of time. She also requested that we provide recommendations on what actions should be taken to prevent a recurrence of such events. Currently, the debate is over the best way to ensure improved airline customer service: either through voluntary implementation by the airlines, legislation, additional regulations, or some combination of these. This is clearly a policy issue for Congress to decide. Our testimony today is based on the results of our previous airline customer service reviews as well as our ongoing work. I would like to discuss three key points dealing with actions that would help to improve customer service: · The airlines must refocus their efforts to improve customer service. In November 2006, we reported [2] that Air Transport Association (ATA) [3] airlines’ customer service plans were still in place to carry out the provisions of the Airline Customer Service Commitment that the airlines promised to execute. These provisions include meeting passengers’ essential needs during long, on-board delays. However, we found that the airlines must refocus their efforts on airline customer service by resuming efforts to self-audit their customer service plans, emphasizing to their customer service employees the importance of providing timely and adequate flight information, disclosing to customers chronically delayed flights, and focusing on the training for personnel who assist passengers with disabilities. · The Department should take a more active role in airline customer service issues. Oversight and enforcement of air traveler consumer protection rules are the responsibility of the Department’s Office of General Counsel. These rules encompass many areas, including unfair and deceptive practices and unfair methods of competition by air carriers and travel agents, such as deceptive advertising. We found that while the Office has made efforts to enforce civil rights violations, it needs to improve its oversight of consumer protection laws, including its efforts to monitor compliance with the terms and conditions of enforcement actions. In recent years, the Office has not conducted on-site compliance reviews, relying instead on self-certifications and company-prepared reports submitted by the air carriers without supporting documentation. · The airlines must overcome challenges in mitigating extraordinary flight disruptions. This past winter’s severe weather events underscored the importance of improving customer service for passengers who are stranded on board aircraft for extended periods of time. According to the Department’s Bureau of Transportation Statistics, approximately 722,600 flights were delayed in 2006 due to poor weather conditions (10 percent of all commercial flights). Meeting passengers’ essential needs during long, on-board delays is a serious concern of Secretary Peters and the Department. Therefore, she asked our office to examine the American Airlines and JetBlue Airways events of December 29, 2006, and February 14, 2007, respectively, and provide recommendations as to what, if anything, the airlines, airports, or the Government—including the Department—might do to prevent a recurrence of such events. Before I discuss these points in detail, I would like to briefly describe why airline customer service is a “front-burner” issue and highlight a few statistics on the development of the current aviation environment. As this Committee is aware, airline customer service took center stage in January 1999, when hundreds of passengers remained in planes on snowbound Detroit runways for up to 8 and a half hours. After those events, both the House and Senate considered whether to enact a “passenger bill of rights.” Following congressional hearings on these service issues, ATA member airlines agreed to execute a voluntary Airline Customer Service Commitment [4] to demonstrate their dedication to improving air travel (see figure 1), with provisions such as meeting passengers’ essential needs during long, on-board delays.
Figure 1. Provisions of the Airline Customer Service Commitment · Offer the lowest fare available. · Notify customers of known delays, cancellations, and diversions. · Deliver baggage on time. · Support an increase in the baggage liability limit. · Allow reservations to be held or cancelled. · Provide prompt ticket refunds. · Properly accommodate disabled and special-needs passengers. · Meet customers’ essential needs during long, on-aircraft delays. · Handle “bumped” passengers with fairness and consistency. · Disclose travel itinerary, cancellation policies, frequent flyer rules, and aircraft configuration. · Ensure good customer service from code-share partners. · Be more responsive to customer complaints. | However, aviation delays and cancellations continued to worsen, eventually reaching their peak during the summer of 2000. In 2000, more than 1 in 4 flights (26 percent) were delayed, with an average arrival delay of 51 minutes. Congress then directed our office to evaluate the effectiveness of the Commitment and the customer service plans of individual ATA airlines. Source: Airline Customer Service Commitment, June 1999 We issued our final report [5] in February 2001. Overall, we found that the ATA airlines were making progress toward meeting the Commitment, which has benefited air travelers in a number of important areas. We found that the airlines were making the greatest progress in areas that are not directly related to a flight delay or cancellation, such as offering the lowest fare available, holding reservations, and responding in a timely manner to complaints. Although the ATA airlines made progress toward meeting the Commitment, we found that the Commitment did not directly address the underlying cause of deep-seated customer dissatisfaction—flight delays and cancellations. This is still the case today. Since our 2001 report, the air carrier industry has faced a series of major challenges, including a weakened economy; the terrorist attacks of September 11, 2001; the Severe Acute Respiratory Syndrome epidemic; the war in Iraq; and soaring fuel prices. As we reported in November 2006, the network air carriers generated about $58 billion in net losses from 2001 through 2005. They have also made unprecedented changes to their operations to regain profitability. Eight commercial air carriers have filed bankruptcy, two major air carriers have merged, and one has ceased operations. While four of the eight air carriers have emerged from bankruptcy, fuel prices continue to climb; this makes cost control a key factor in not only sustained profitability but also in overall survival of an airline. We revisited airline customer service issues to a limited extent following the December 2004 holiday travel period, when weather and other factors led to severe service disruptions in some parts of the country. While our review [6] focused on the inconveniences experienced by Comair and US Airways passengers, we found that nearly half of all flights, system-wide, during the 7-day travel period were either delayed or cancelled, affecting hundreds of thousands of passengers. Flight delays and cancellations continue as a major source of customer dissatisfaction. A review of vital statistics shows the environment that air travelers faced in 2006 compared to peak year 2000. · The number of scheduled flights (capacity) declined from 8.1 million in 2000 to 7.6 million in 2006, a drop of 6.4 percent. Scheduled seats declined by 9.5 percent between 2000 and 2006, from 921 million to 834 million. · Even as the number of flights and scheduled seats declined, passenger enplanements were up nearly 7 percent, from 699 million passengers in 2000 to 745 million passengers in 2006. · Reduced capacity and increased demand led to fuller flights. For 2006, load factors averaged nearly 80 percent for 10 of the largest ATA airlines, compared to average load factors of just over 72 percent for 2000. · Reduced capacity and higher load factors can also result in increased passenger inconvenience and dissatisfaction with customer service. With more seats filled, air carriers have fewer options to accommodate passengers from cancelled flights. · The number of delayed flights has declined from 2.09 million in 2000 to 2.02 million flights in 2006, a decrease of 3.5 percent. · The percentage of delayed flights also declined from approximately 26 percent in 2000 to 25 percent in 2006. · Nevertheless, the average flight delay increased from 51 minutes in 2000 to 53 minutes in 2006. Consumer complaints are rising. While the 2006 Department of Transportation (DOT) Air Travel Consumer Report disclosed that complaints involving U.S. airlines for 2006 had declined by 6.6 percent (6,900 to 6,448) compared to complaints in 2005, February 2007 complaints increased by 57 percent (423 to 666) over complaints in February 2006, with complaints relating to delays, cancellations, and missed connections nearly doubling (127 to 247) for the same period. Over the last several years, DOT ranks flight problems (i.e., delays, cancellations, and missed connections) as the number one air traveler complaint, with baggage complaints and customer care [7] ranked number two and number three, respectively. As shown in figure 2, flight problems accounted for more than one-quarter of all complaints the Department received in 2006. Source: DOT’s Air Travel Consumer Reports for 2006 Historically, most chronically delayed and cancelled flights occur during the busy summer travel season—which will soon be upon us. The extent to which delays and cancellations will impact passengers in 2007 depends on several key factors, including weather conditions, the impact of the economy on air traffic demand, and how existing capacity is managed at already congested airports. I would now like to turn to my three points on airline customer service. Airlines Must Refocus Their Efforts To Improve Customer Service In June 2005, the Chairman of the House Subcommittee on Aviation requested that we follow up on the performance of U.S. air carriers in implementing provisions of the Commitment since the issuance of our 2001 report. Unlike our prior work, which reviewed each provision, this review focused on selected Commitment provisions. [8] We reviewed implementation of the selected Commitment provisions by the 13 current ATA member airlines; this included JetBlue Airways, which became an ATA member in 2001. JetBlue has not adopted the June 1999 Commitment and does not consider itself bound by its provisions. We also reviewed implementation of the selected provisions by two non-ATA airlines that are not signatories to the Commitment—AirTran Airways and Frontier Airlines. In November 2006, we reported that the ATA airlines’ customer service plans were still in place to carry out the provisions of the Commitment and that the Commitment provisions were still incorporated in their contracts of carriage, as we recommended in our 2001 review. This is important because unlike DOT regulations, which are enforced by the Department and may result in administrative or civil penalties against an air carrier, contracts of carriage are binding contracts enforceable by the customer against the air carrier. However, we found that the airlines must refocus their efforts on airline customer service by taking the following actions. · Resuming Efforts To Self-Audit Their Customer Service Plans: In our 2001 report, we recommended, and the ATA airlines agreed, that the airlines establish quality assurance and performance measurement systems and conduct internal audits to measure compliance with the Commitment provisions and customer service plans. In June 2001 (about 5 months later), we confirmed that 12 of the 14 ATA airlines that were signatories to the Commitment had established and implemented their quality assurance and performance measurement systems. In our 2006 review, however, we found that the quality assurance and performance measurement systems were being implemented at just five of the ATA airlines. [9] The other ATA airlines had either discontinued their systems after September 11, 2001, or combined them with operations or financial performance reviews where the Commitment provisions were overshadowed by operational or financial issues. We also found that the two non-ATA airlines we reviewed did not have comprehensive quality assurance and performance measurement systems or conduct internal audits to measure compliance with their customer service plans. A quality assurance and performance measurement system is necessary to ensure the success of the Commitment and customer service plans. Therefore, the success of the customer service plans depends upon each airline having a tracking system for compliance with each provision along with an implementation plan for the Commitment. These systems and audit procedures will also help DOT to more efficiently review the airlines’ compliance with the Commitment. · Emphasizing to Their Customer Service Employees the Importance of Providing Timely and Adequate Flight Information: The ATA airlines committed to notify customers who are either at the airport or on board an affected aircraft of the best available information regarding delays, cancellations, and diversions in a timely manner. All of the airlines included in our 2006 review made up-to-date information available about their flights’ status via their Internet sites or toll-free telephone reservation systems. However, we still found that the information provided in boarding areas about delays and cancellations was not timely or adequate during our tests. In 42 percent of our observations, airline gate agents did not make timely announcements (defined as approximately every 20 minutes) about the status of delays, and the information they provided was not adequate about 45 percent of the time. This is one area where the airlines’ self-audits would be effective in monitoring compliance with the Commitment provision and their own internal policies. · Disclosing Chronically Delayed Flights to Customers: On-time flight performance data should also be made readily available to passengers at the time of booking. We recommended in our 2001 report that the airlines disclose to passengers at the time of booking—without being asked—the prior month’s on-time performance for those flights that have been consistently delayed (i.e., 30 minutes or greater) or cancelled 40 percent or more of the time. We have recommended this several times, but none of the airlines to date have chosen to adopt it. Currently, the airlines are required to disclose on-time performance only upon request from customers. However, the information that the agents provide about on-time performance through the airlines’ telephone reservation systems is not always accurate or adequate. In 41 percent of our 160 calls to the airlines’ telephone reservation systems, we were told that the information was not available or the agents either guessed what they thought the on-time performance was or gave the data for only the previous day. The on-time performance for consistently delayed or cancelled flights is readily available to the airlines. Continuing to operate chronically delayed flights could potentially constitute a deceptive business practice. Not disclosing such chronic delays on a flight could be viewed as contributing to such a deceptive practice. Therefore, we continue to believe—as we recommended in 2001—that on-time performance should be disclosed at the time of booking for those flights that have been consistently delayed and should not require a customer request. · Focusing on the Training for Personnel Who Assist Passengers With Disabilities. The needs and perspectives of passengers with disabilities are of paramount importance in providing satisfactory service. This is especially true during extended flight delays whether the passengers are on board aircraft or in the airlines’ gate area. The ATA airlines committed to disclose their policies and procedures for assisting special-needs passengers, such as unaccompanied minors, and for accommodating passengers with disabilities in an appropriate manner. The airlines need to refocus their attention in this area and ensure that employees who assist passengers with disabilities are properly trained. The Department Should Take a More Active Role in Airline Customer Service Issues Oversight and enforcement of air traveler consumer protection rules are the responsibility of the Department’s Office of General Counsel. These rules encompass many areas, including unfair and deceptive practices and unfair methods of competition by air carriers and travel agents, such as deceptive advertising. In our 2001 customer service report, we recommended that the Department be given additional resources to investigate and enforce cases under its statutory authority, and Congress did so. As part of our 2006 review, we examined how the Department has used the additional resources Congress appropriated to oversee and enforce air travel consumer protection requirements. We found that DOT was using its additional resources to oversee and enforce air travel consumer protection requirements with a focus on investigations and enforcement of civil rights issues, including complaints from passengers with disabilities. But, when DOT discovered violations and assessed penalties, it almost always forgave the penalty if the air carrier agreed to mitigate the conditions for which the penalty was assessed. DOT’s follow-up monitoring of compliance with these conditions was limited, and in some cases there was no follow-up monitoring at all. In recent years, DOT has not conducted on-site compliance reviews, relying instead on air carriers’ self-certifications and company-prepared reports submitted without supporting documentation. We also found that DOT’s increased responsibilities—especially as they relate to civil rights issues—had diverted resources away from its other consumer protection activities, such as regular on-site consumer protection and related compliance and enforcement visits to airlines. Given the results of our 2006 review and the extended ground delays that stranded passengers on board aircraft this past winter, DOT should take a more active role in overseeing airline customer service. The Airlines Must Overcome Challenges in Mitigating Extraordinary Flight Disruptions The airlines continue to face challenges in mitigating extraordinary flight disruptions, including long, on-board delays during extreme weather. According to DOT’s Bureau of Transportation Statistics, approximately 722,600 flights were delayed in 2006 due to poor weather conditions (10 percent of all commercial flights). For that same year, over 73,000 flights experienced taxi-out and taxi-in times of 1 hour or more. The airlines, the Federal Aviation Administration (FAA), and the Department cannot prevent significant weather events. What they can do, however, is work together to plan for such events and minimize the impact on passengers. This past winter’s severe weather events underscored the importance of improving customer service for passengers who are stranded on board aircraft for extended periods of time. · On December 20, 2006, severe blizzards closed Denver’s airport, causing several airplanes to divert to other airports. United Airlines diverted two flights to Cheyenne, Wyoming. The following morning, United’s flight crew and attendants boarded the aircraft and departed, leaving all 110 passengers behind to fend for themselves. · On December 29, 2006, the Dallas-Fort Worth area experienced unseasonably severe weather that generated massive thunder, lightning storms, and a tornado warning; this caused the airport to shut down operations several times over the course of an 8-hour period. American Airlines diverted over 100 flights and many passengers were stranded on board aircraft on the airport tarmac for 6 hours or more. · On February 14, 2007, snow and ice blanketed the northeastern United States. JetBlue Airways stranded scores of passengers aboard its aircraft on the tarmac at John F. Kennedy International Airport (JFK). At 1 point during that day, JetBlue had 52 aircraft on the ground with only 21 available gates. JetBlue has publicly admitted shortcomings in its systems that were in place at the time for handling such situations. · On March 16, 2007, an ice storm hit the Northeast, causing numerous delays and cancellations and forcing passengers to endure long, on-board flight delays. In fact, several Office of Inspector General staff were flying that day and experienced a 9-hour, on-board delay. Meeting Passengers’ Essential Needs During Long, On-Board Delays Is a Serious Concern of Secretary Peters and the Department. As a result of the
December 29, 2006, and February 14, 2007, incidents; Secretary Peters expressed serious concerns about the airlines’ contingency planning for such situations. On February 26, 2001, she asked our office to do the following: · Examine the airlines’ customer service commitments, contracts of carriage, and policies dealing with extended ground delays aboard aircraft. · Look into the specific incidents involving American and JetBlue, in light of whatever commitment these carriers made concerning policies and practices for meeting customers’ essential needs during long, on-board delays. · Provide recommendations as to what, if anything, the airlines, airports, or the Government—including the Department—might do to prevent a recurrence of such events and highlight any industry best practices that could help in dealing with such situations. Our work in this area began March 12, 2007, with site visits to JetBlue Airways in New York (including JFK) and American Airlines in Texas—specifically, Dallas-Fort Worth International and Austin-Bergstrom Airports. During the past 30 days, we have done the following: · Collected voluminous amounts of information and data from American and JetBlue regarding the events of December 29, 2006, and February 14, 2007. We are in the process of analyzing this information. While we are in the early stages of our review, we can report that American and JetBlue have revised their operating practices for mitigating long, on-board delays. For example, American instituted a new policy designed to prevent on-board delays from exceeding 4 hours. JetBlue also set a time limit of 5 hours maximum duration for any long, on-board delay away from a gate. · Received information from other carriers providing service from Dallas-Fort Worth, Austin, and New York airports and met with officials from FAA air traffic control and those three airports. We are in the process of receiving contingency plans from the ATA airlines (system-wide plans) and the major airports they serve (each airport operator’s plan). We expect to brief the Secretary by the end of June and issue a report shortly thereafter. Airlines Must Implement More Effective Contingency Plans. One observation we can share today regarding our current review is that contingency planning for extreme weather is not a new concern for airlines, as evidenced by the June 1999 Commitment provision, which states that: · The airlines will make every reasonable effort to provide food, water, restroom facilities, and access to medical treatment for passengers aboard an aircraft that is on the ground for an extended period of time without access to the terminal, as consistent with passenger and employee safety and security concerns. · Each carrier will prepare contingency plans to address such circumstances and will work with carriers and the airport to share facilities and make gates available in an emergency. However, as we noted in our 2001 report, the airlines had not clearly and consistently defined terms in the Commitment provision such as “an extended period of time.” We also noted only a few airlines’ contingency plans specify in any detail the efforts that will be made to get passengers off the aircraft when delayed for extended periods, either before departure or after arrival. Our opinion was then, as it is now, that this should be a top-priority area for the airlines when implementing their contingency plans, especially with long, on-board delays on the rise from 2005 to 2006—particularly those exceeding 4 hours. In response to our 2001 report recommendations, the airlines agreed to do the following: · Clarify the terminology used in their customer service plans for extended delays. · Establish a task force to coordinate and develop contingency plans with local airports and FAA to deal with lengthy delays. While a task force was formed, the effort never materialized as priorities shifted after September 11, 2001. We are examining airline and airport contingency planning as part of our ongoing review.
JetBlue and ATA Announced Initiatives To Address Long, On-Board Delays but More Needs To Be Done. These two initiatives address the recent events. First, on February 20, 2007, JetBlue published its own customer bill of rights. JetBlue plans to offer compensation in the form of vouchers for flight disruptions, such as cancellations. While this is a step in the right direction, this bill of rights is limited; JetBlue needs to clarify some of the terms. The JetBlue bill of rights only addresses 3 of the 12 Commitment provisions: flight delays and cancellations, on-board delays, and overbookings. Also, JetBlue needs to clearly define all terms in its bill of rights, such as “Controllable Irregularity,” so that passengers will know under what specific circumstances they are entitled to compensation. While JetBlue believes that its bill of rights goes beyond the Commitment provisions in some areas, re-accommodating passengers for flight cancellations is already required under its contract of carriage. Additionally, while JetBlue will compensate its customers for being bumped from their flights, compensation is already required under an existing Federal regulation but not to the extent of JetBlue’s compensation of $1,000. Second, on February 22, 2007, ATA announced the following course of action: · Each airline will continue to review and update its policies to ensure the safety, security, and comfort of customers. · Each airline will work with FAA to allow long-delayed flights to return to terminals in order to offload passengers who choose to disembark without losing that flight’s position in the departure sequence. · ATA will ask the Department to review airline and airport emergency contingency plans to ensure that the plans effectively address weather emergencies in a coordinated manner and provide passengers with essential needs (food, water, lavatory facilities, and medical services). · ATA will ask the Department to promptly convene a meeting of air carrier, airport, and FAA representatives to discuss procedures to better respond to weather emergencies that result in lengthy flight delays. While we understand the pressures that ATA and its member airlines face in maintaining profitability in today’s environment, we are concerned that the actions proposed merely shift responsibility from ATA to the Department. We agree that the Department must be an active partner, but ATA’s proposed course of action is not significantly different than what the airlines agreed to do in response to our 2001 recommendations, such as “to establish a task force to coordinate and develop contingency plans with local airports and FAA to deal with lengthy delays.” As mentioned earlier, how to ensure airline customer service is clearly a policy issue for Congress to decide. Given the problems that customers continue to face with airline customer service, Congress may want to consider making the Airline Customer Service Commitment mandatory for all airlines. However, there are actions that the airlines, airports, the Department, and FAA can undertake immediately without being prompted by Congress to do so. For example: · Those airlines that have not already done so should implement quality assurance and performance measurement systems and conduct internal audits of their compliance with the Commitment provisions. The Department should use these systems to more efficiently review the airlines’ compliance with those Commitment provisions governed by Federal regulation. · The Department should revisit its current position on chronic delays and cancellations and take enforcement actions against air carriers that consistently advertise flight schedules that are unrealistic, regardless of the reason. · The airlines, airports, and FAA should establish a task force to coordinate and develop contingency plans to deal with lengthy delays, such as working with carriers and the airport to share facilities and make gates available in an emergency. · The Department’s Office of General Counsel; in collaboration with FAA, airlines, and airports; should review incidents involving long, on-board ground delays and their causes; identify trends and patterns of such events; and implement workable solutions for mitigating extraordinary flight disruptions. That concludes my statement. I would be glad to answer any questions you or other Members of the Committee might have.
[1] A contract of carriage is the document air carriers use to specify legal obligations to passengers. Each air carrier must provide a copy of its contract of carriage free of charge upon request. The contract of carriage is also available for public inspection at airports and ticket offices. [2] OIG Report Number AV-2007-012, “Follow-Up Review: Performance of U.S. Airlines in Implementing Selected Provisions of the Airline Customer Service Commitment,” November 21, 2006. OIG reports and testimonies can be found on our website: www.oig.dot.gov. [3] The Air Transport Association is the trade association for America’s leading air carriers. Its members transport over 90 percent of all the passenger and cargo traffic in the United States. [4] ATA signed the Commitment on behalf of the then 14 ATA member airlines (Alaska Airlines, Aloha Airlines, American Airlines, American Trans Air, America West Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, Midwest Express Airlines, Northwest Airlines, Southwest Airlines, Trans World Airlines, United Airlines, and US Airways). [5] OIG Report Number AV-2001-020, “Final Report on Airline Customer Service Commitment,” February 12, 2001. [6] OIG Report Number SC-2005-051, “Review of December 2004 Holiday Air Travel Disruptions,” February 28, 2005. [7] Complaints such as poor employee attitude, refusal to provide assistance, unsatisfactory seating, and unsatisfactory food service are categorized as customer care complaints. [8] Our 2006 review focused on notifying passengers of delays and cancellations, accommodating passengers with disabilities and special needs, improving frequent flyer program issues, and overbooking and denied boardings. We did not include the Commitment provision regarding on-time checked baggage delivery, which was subject to a hearing before the House Subcommittee on Aviation in May 2006. [9] At the time of our 2006 review, quality assurance and performance measurement systems were being implemented at Alaska Airlines, Continental Airlines, Delta Air Lines, Northwest Airlines, and United Airlines.
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