[Senate Hearing 106-1126]
[From the U.S. Government Publishing Office]
S. Hrg. 106-1126
AIRLINE CUSTOMER SERVICE
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JUNE 28, 2000
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington JOHN D. ROCKEFELLER IV, West
TRENT LOTT, Mississippi Virginia
KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan RON WYDEN, Oregon
SAM BROWNBACK, Kansas MAX CLELAND, Georgia
Mark Buse, Republican Staff Director
Ann Choiniere, Republican General Counsel
Kevin D. Kayes, Democratic Staff Director
Moses Boyd, Democratic Chief Counsel
C O N T E N T S
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Page
Hearing held on June 28, 2000.................................... 1
Statement of Senator Bryan....................................... 10
Statement of Senator Burns....................................... 6
Statement of Senator Cleland..................................... 48
Statement of Senator Gorton...................................... 9
Prepared statement........................................... 9
Prepared statement of Senator Hollings........................... 14
Statement of Senator Hutchison................................... 3
Statement of Senator Kerry....................................... 7
Statement of Senator McCain...................................... 1
Prepared statement........................................... 2
Statement of Senator Rockefeller................................. 11
Prepared statement........................................... 12
Prepared Statement of Senator Snowe.............................. 15
Statement of Senator Wyden....................................... 4
Witnesses
Mead, Hon. Kenneth M., Inspector General, Department of
Transportation, accompanied by: Scott Macey, Project Manager,
Airline Customer Service Review, Office of Inspector General,
Department of Transportation................................... 17
Prepared statement of Hon. Kenneth M. Mead................... 22
Statement of Donald J. Carty, Chairman, President, and Chief
Executive Officer, American Airlines, and Chairman, Executive
Committee, Air Transport Association of America, accompanied
by: Mary Jopplin, Senior Director for Customer Service,
Continental Airlines; Vicki Escarra, Executive Vice President
for Customer Service, Delta Air Lines; and Mark Dupont,
Managing Director of Customer Services, American Airlines...... 29
Prepared statement of Donald J. Carty........................ 32
Prepared statement of Mary Jopplin........................... 43
Appendix
Response to written questions submitted to Hon. Kenneth M. Mead
by:
Hon. Slade Gorton............................................ 57
Hon. John McCain............................................. 59
AIRLINE CUSTOMER SERVICE
----------
WEDNESDAY, JUNE 28, 2000
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 9:29 a.m. in room
SR-253, Russell Senate Office Building, Hon. John McCain,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
The Chairman. Good morning. I want to apologize ahead of
time to the witnesses. We have a vote, two votes at 9:45. So we
will try to get through opening statements and get as much done
as we can, and then at some point I will have to take a brief
recess until we come back from the vote. I want to thank all
the witnesses for being here this morning.
One year ago, the Commerce Committee approved the Airline
Passenger Fairness Act, which was enacted into law almost 3
months ago as part of the FAA Reauthorization Act. The Airline
Passenger Fairness Act was crafted in response to widespread
and intense public frustration with airlines' poor customer
service.
This legislation gave the airlines an opportunity to
refocus their attention on basic customer service. The member
air carriers of the Air Transport Association developed the
Airline Customer Service Commitment. Pursuant to that industry-
wide initiative, each airline developed its own customer
service plan. Those plans were scheduled to be implemented
fully by last December, but I understand that full
implementation by all airlines did not occur until March of
this year.
The legislation directed the Department of Transportation
Inspector General to report to Congress on the effectiveness of
the airlines in living up to their Customer Service Commitment.
The first report is an interim one and is being released today.
The final report is due in December.
Although the Inspector General's findings are preliminary,
the results show mixed success and raise many questions and
concerns. Unfortunately, the report indicates that the airlines
still have a long way to go to make significant inroads on the
customer service front. The good news is that the Inspector
General's interim report makes several thoughtful suggestions
to help the carriers' customer plans work. Better yet the
carriers have time to respond to these suggestions before their
final report card is in.
At a minimum, it is necessary for the carriers to heed the
Inspector General's advice. What is at issue here are basic
standards of customer service, not dazzling promises designed
to exceed passengers' expectations. Air travelers need to know
that the airlines are bending over backward to meet and exceed
these basic commitments.
For instance, customers should know that they have 24 hours
to hold a seat at a quoted fare even if the ticket is non-
refundable. Delays should be communicated when they are known,
not simply when passengers show up at the gate. And information
on frequent flyer programs should be useful enough to help
consumers figure out the likelihood of redeeming their points
for travel.
According to the Inspector General, the airlines are quick
to blame their customers' dissatisfaction on the FAA and the
air traffic control system. Delays related to bad weather and
antiquated air traffic control equipment are indeed at the root
of many customers' complaints. If the airlines truly believe
that the air traffic control system is at the root of their
woes, I urge them to throw their weight and momentum behind a
serious, realistic plan for air traffic control reform.
As I said last year, I want and expect the airline customer
service commitment to succeed. But if the airlines' voluntary
effort falls short, I am committed to moving forward on
additional, enforceable passenger fairness legislation. The
Inspector General's December report will weigh heavily on our
decisions regarding a future course of action. In the meantime,
I expect the airlines to fully comply with the recommendations
of the Inspector General.
Several of my committee colleagues and I have asked the
Inspector General to go beyond his final report in December and
continue reporting on the airlines' compliance with their
voluntary customer service initiatives. I look forward to
continuing to work with my colleagues on this important issue.
I would mention to my colleagues again, at 9:45 we have a
vote. I would like to try to make our opening statements brief
so we could at least begin the opening statements of the
witnesses if they would agree.
Senator Kerry--or were you here first, Ron?
[The prepared statement of Senator McCain follows:]
Prepared Statement of Hon. John McCain, U.S. Senator from Arizona
One year ago, the Commerce Committee approved the Airline Passenger
Fairness Act, which was enacted into law almost three months ago as
part of the FAA reauthorization act. The Airline Passenger Fairness Act
was crafted in response to widespread and intense public frustration
with airlines' poor customer service.
Our legislation gave the airlines an opportunity to refocus their
attention on basic customer service. The member air carriers of the Air
Transport Association developed the Airline Customer Service
Commitment. Pursuant to that industry-wide initiative, each airline
developed its own customer service plan. Those plans were scheduled to
be implemented fully by last December, but I understand that full
implementation by all airlines did not occur until March of this year.
The legislation directed the Department of Transportation Inspector
General to report to Congress on the effectiveness of the airlines in
living up to their Customer Service Commitment. The first report is an
interim one, and is being released today. The final report is due in
December.
Although the Inspector General's findings are preliminary, the
results show mixed success and raise many questions and concerns.
Unfortunately, the report indicates that the airlines still have a long
way to go to make significant inroads on the customer service front.
The good news is that the Inspector General's interim report makes
several thoughtful suggestions to help the carriers' customer plans
work. Better yet, the carriers have time to respond to these
suggestions before their final report card is in.
At a minimum, it is necessary for the carriers to heed the
Inspector General's advice. What's at issue here are basic standards of
customer service, not dazzling promises designed to exceed passengers'
expectations. Air travelers need to know that the airlines are bending
over backwards to meet and exceed these basic commitments.
For instance, customers should know that they have 24 hours to hold
a seat at a quoted fare, even if the ticket is non-refundable. Delays
should be communicated when they are known, not simply when the
passenger shows up at the gate. And information on frequent flyer
programs should be useful enough to help consumers figure out the
likelihood of redeeming their points for travel.
According to the Inspector General, the airlines are quick to blame
their customers' dissatisfaction on the FAA and the air traffic control
system. Delays related to bad weather and antiquated air traffic
control equipment are indeed at the root of many customers' complaints.
If the airlines truly believe that the air traffic control system is at
the root of their woes, I urge them to throw their weight and momentum
behind a serious, realistic plan for air traffic control reform.
Otherwise, they will just be accused of trying to shift the blame.
As I said last year, I want and expect the Airline Customer Service
Commitment to succeed. But if the airlines' voluntary effort falls
short, I am committed to moving forward on additional, enforceable
passenger fairness legislation. The Inspector General's December report
will weigh heavily on our decision regarding a future course of action.
In the meantime, I expect the airlines to fully comply with the
recommendations of the Inspector General.
Several of my Committee colleagues and I have asked the Inspector
General to go beyond his final report in December, and continue
reporting on the airlines' compliance with their voluntary customer
service initiatives. I look forward to continuing to work with my
colleagues on this important issue.
Senator Wyden. Mr. Chairman, I have strong feelings about
it, but I know Senator Hutchison has something that is time-
sensitive.
The Chairman. Senator Hutchison.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Thank you, Mr. Chairman.
I have an amendment on the floor that is going to be voted
on at 9:45, so Senator Wyden has allowed me to say a couple of
words, which I appreciate very much. I do want to thank you,
Mr. Chairman, for holding this hearing on the interim report,
because I think it is good for the airlines to see what the
preliminary results are, and to be able to adjust to the
findings. I think, Mr. Chairman, the approach that you have
taken in getting everyone to the table and giving fair notice
and allowing the airlines a chance to respond is a good one.
I do think that dissatisfaction is up for a variety of
reasons. Certainly, we know that there are a lot more planes in
the air and I think the issue of air traffic control systems is
legitimate. I also believe that there are indications that the
airlines are doing a somewhat better job of disclosing their
lowest fares but I think we still need to do more in
simplifying for the passenger the fare structure and what it
takes to get the lowest fares.
Second, I hope that the airlines will continue to strive to
give more information to passengers. Most passengers will
understand better what is before them if they are told on a
frequent basis what the delays are, how long they will be, and
even looking for other options that might get them to their
destination on an expedited basis. I know that if the delay is
caused by weather that that is probably not possible, but
disclosure of information, I think, helps a lot.
So, Mr. Chairman, I look forward to hearing from the
witnesses and I hope that we can take positive steps that would
avoid the necessity for us to pass laws, but rather inform the
airlines of what should be done better and let them respond
without new regulations and new reporting requirements.
However, if these improvements do not happen, then I think
legislation is a viable option.
Thank you.
The Chairman. Thank you, Senator Hutchison.
Senator Wyden.
STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, let
me thank you especially for all your interest in this and for
scheduling this hearing this morning.
I would like to spend just a few minutes outlining the
significant gaps that our government's investigators found
between what the airline industry promised its passengers a
year ago and what the airlines have actually delivered.
First, on this question of the lowest fare, what the
Inspector General found is that a majority of this country's
airlines are not telling the passengers what the lowest fare
actually is. The way the airlines fudge this up is they try to
say, well, we will tell you the lowest fare you are eligible
for, but the fact is that often on the Internet you can get a
much lower fare. So the bottom line is that, as of today, a
majority of the nation's airlines are not telling this
country's passengers what the lowest possible fare that is out
there actually is.
Second, the airlines promised that they would notify
passengers of known cancellations and delays. At page 20 of the
report, the Inspector General states that flights are often
indicated as being on time when it is obvious that the flight
is going to be delayed because the aircraft is not even at the
gate. The Inspector General found that often there are delays
of up to 4 hours prior to departure because the airlines are
not telling the passengers the truth about where the airline is
and when it is going to leave the gate.
I think it is especially troubling--and here I will quote
just from the Inspector General's report--that very often the
information that is given to the passengers is inaccurate,
incomplete, or unreliable.
Third, the airlines pledged that they would return lost
baggage within 24 hours. The way they fudge this one up is
essentially by manipulating the clock. Some of the airlines say
that the pledge kicks in when the lost bags actually show up at
a destination airport. Others use a different kind of criteria
such as when the customer files the missing baggage claim.
I could go on about a variety of these others areas, Mr.
Chairman, such as the refund pledge. But let me tell you what I
am most troubled about. It is very clear to me that a majority
of this country's airlines will not write these commitments to
the passengers into the contracts of carriage. This is the
actual fine print, the legalese that protects the consumer.
[The information referred to follows:]
American Airlines/American Eagle
Customer Service Plan
=======================================================================
Handling of Customer Issues
Customer Relations can be reached at:
American Airlines Customer Relations
Mail Drop 2400
P.O. Box 619612
Dallas/Ft. Worth Airport, TX 75261-9612
Fax 817-967-4162
Helpful Suggestions
--Be as specific as possible, including dates and flight numbers
--LProvide all supportive documentation, such as copies of your tickets
and certificates
_______________________________________________________________________
We take the customer service goals in this plan very seriously. We know
that you expect nothing less. However, the Customer Service Plan does
not create contractual or legal rights. Rather, our contractual rights
and obligations are set out in our conditions of carriage, applicable
tariffs, and ticket jacket, all of which provide additional details on
the matters discussed and must be consulted to fully understand your
rights and our obligations. For example, we are not responsible for any
special, incidental, or consequential damages for delays,
cancellations, lost baggage, late refunds, or instances in which we do
not meet our service goals.
Customer Service Plan
September 15, 1999
So what I am troubled about is the prospect that, let us
say we do not have a Chairman like you, Mr. Chairman, who is
interested in this subject and the Inspector General is no
longer on the beat; the contracts of carriage do not end up
giving the consumer any meaningful protection and we are just
back to business as usual.
I will wrap up with one last comment with respect to the
airline industry's position on this. The airlines initially
said that there really was not any big problem here. They said
that this situation was largely anecdotal, that consumers were
bringing us various concerns, but there was not a problem.
Well, after we accumulated so many instances of that they
finally said, OK, there is a problem; let us deal with it
voluntarily.
Now that the Inspector General has found, as the newspaper
said this morning, that the airlines are coming up short on
their own pledges--this is not something that somebody
independent required, but now that they are coming up short on
their own pledges--the airline industry has begun to shift the
blame yet again and as of yesterday they are saying it is air
traffic control, the FAA, or one thing or another.
The bottom line it seems to me is we are not going to get
this job done in terms of protecting passengers until we pass a
bill that has got some teeth in it and gets passengers good
information. We are not talking about mandating gourmet meals
on airplane flights. We are talking about passengers getting
good, accurate, objective information that these airlines have
and they are stonewalling and not giving it to the passengers,
and I think it is outrageous.
I thank you.
The Chairman. How do you really feel?
[Laughter.]
The Chairman. Senator Burns.
STATEMENT OF HON. CONRAD BURNS,
U.S. SENATOR FROM MONTANA
Senator Burns. Thank you, Mr. Chairman, and thank you for
this hearing.
I do not know how many hours that you have spent behind a
ticket counter in an airport. You are looking at a guy that
has. Any time that you deal with the public, the traveling
public, it is a special challenge, and it is one that is
humbling and you learn a lot about how people are and what they
react to and this type of thing. I worked for Ozark Airlines
when I first came out of the Marine Corps and that is probably
the 2 years that I spent in public relations that was really--
you earn your stripes.
But nonetheless we know that, especially in the air travel
industry, the competitive nature of it, trying to keep all of
the loose ends tied together, trying to get them out on time
and trying to get them to arrive on time with the same luggage
that they started with--and we have all heard all the stories,
all the horror stories that you could hear about what happens
to luggage and this type thing. And I am still confident, I do
not think it has changed a lot from the time that I was a young
man working on the ramp, that there is some of those folks down
there that could tear up shotputs and they just have a knack of
doing that.
But nonetheless, for the most part, and if you look at the
volume and the tonnage, for the most part they do a pretty good
job.
If we are to look at this, if we are to look at this as
government, then I think we should also look at a State like my
State, who has captive shippers as far as ground transportation
is concerned, the railroads. We do not get very good service
there, either, and we pay a higher rate.
So I am interested to read the report. I am going to. And
if there are some things that are glaringly being done by the
airlines that is not in the best interest of the traveling
public, then I think we should take a look at it. There is no
doubt about it.
But for the most part, let us--I just think it is a
wonderful thing. Now, I know a lot of folks that are elected
and they go out and they work for a day on different jobs. I
would suggest you go to the airlines and say, I want to work a
ticket counter, I want to work a gate as a gate agent just 1
day, one shift. I am sure that there are folks that would allow
you to do that.
So I just think that--now we have got high fuel prices.
That further complicates things. We should be holding some
oversight on FAA because we hear them complain about FAA. I
have a good friend that was director of the FAA that I take
some advice from and think a lot of, and I think there are some
things there that could be done. Maybe it should be reformed
all the way together. We have got the technology to do it and
the equipment, the know-how, and some days I do not think we do
a very good job.
And we do not do a very good job controlling our
thunderstorms. Maybe Congress can do that, too. I do not think
so.
But I just want to throw an element of thought in this
thing. Whenever we start this dialog, let us make sure that we
have walked in the other man's shoes before we start talking
about passing laws and requiring things of an industry that we
do not take a look at ground transportation, because I will
tell you there is some things there that could stand a little
oversight.
I thank the chairman.
The Chairman. Thank you.
I would ask again my colleagues if we could complete our
opening statements so that when we come back from the vote we
can begin with the first witness.
Senator Kerry.
STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Kerry. Mr. Chairman, thank you. Thank you for doing
this hearing.
We hear two points of view, Senator Wyden and Senator
Burns, and there is truth in both of them, obviously. But I do
not think anybody here would feel constrained to say that the
system is not working very well and it is not living up to the
standards that we expected. Now, I know it is hard, obviously,
to deal with acts of God, with thunderstorms that suddenly crop
up and all of a sudden you have got a problem. But I do know
enough, because I stay current as a pilot and I love to fly and
I use this air system and I have watched the transition of it
in the last years, and it is increasingly at risk for a number
of different reasons.
The FAA bears some responsibility, there is no question
about that. We have finally put some funding into that and
hopefully some things can change.
But I will tell you, there are just some fundamental
standards of common sense and basic decency in how people are
treated that are not being applied. I speak as a user. I went
out to National Airport about 4 weeks ago, after 4 telephone
calls from my office by my scheduler prior to leaving within an
hour to see if my flight was leaving on time. And they said,
yes, scheduled on time, absolutely, we are all up to speed, you
go out there.
I arrive at the airport 6 minutes after one of those phone
calls was made and the line from the counter through the
corridor was halfway down the corridor and any dolt could have
walked in there and said this plane is delayed for hours. I got
to the counter and indeed I was told: Oh, 2 and a half, 3 hour
delay.
Now, in the age when I can sit on an airplane and e-mail my
office or anywhere in the world on a PalmPilot, it is
incomprehensible to me that people could not have informed us
properly in real time as to what was happening. This is a
matter of executive execution. It is a matter of smart people
running a show more intelligently in an age of communications
when there is no excuse for not knowing.
Now, my stepson this weekend was trying to go from New York
to California. For six and a half hours, he sat on a runway in
New York before they even left. You can fly across the great
pond in that period of time. I have spent 5 hours sitting on
the runway right here in Washington, D.C. to go to Boston.
Now, last Thursday I went out for the 9 o'clock flight.
Congress, somehow we finished our work, several of us got to
the airport, were told the flight is leaving on time and we
could board. I get on the flight and the pilot comes on and
says: Well, the good news is the flight time between here and
Boston is only 52 minutes; the bad news is the flight is
canceled, we are not going.
Why? Well, I could not understand it, so I went and got a
pilots' briefing. Indeed, there was nothing in the pilots'
briefing that suggested to me there was that kind of delay. I
was told: Well, there is a delay in Boston. So I got the
weather reports for the entire day. I have them.*
---------------------------------------------------------------------------
* The information referred to has been retained in the Committee
files.
---------------------------------------------------------------------------
Senator Kerry. Here is the satellite photography beginning
at 6:15 a.m., 10:15 a.m., 2:15 p.m., 6:15 p.m., 7:45 p.m.--
there is a little bit of activity down in the south--9:15 p.m.,
a little more activity in the south, nothing in Boston, nothing
in Washington; and right up to 10:15 p.m.* Then I got the GOES
satellite and it shows a little bit of thunderstorm activity
down here in the south, absolutely nothing here. In Boston they
were reporting 10 miles visibility, 3,000 foot ceiling; in
Washington a 20,000 foot ceiling, 10 miles visibility, which
incidentally is the maximum they can report in terms of
observations.
Yet the flight was canceled. Now, maybe it is because there
were only about 25 people left to fly on it and equipment was
tied up somewhere else in the country and they might not have
had a plane to leave in the morning, so they made an executive
decision to keep a plane there. I do not know, but they never
told us.
The next morning at 7 a.m. when I got on the flight to get
to Boston, the pilots from that flight the night before were on
that flight to go and I asked them, why did we not go? They
said: We do not have a clue; we cannot tell you; the weather
was fine, we should have gone.
Now, this happens--I am going to end, but this happens to
people all across this country. It is not because I am a
Senator. It is just I am a user, I am a traveler like everybody
else. And travelers all over this country are tired of being
lied to, tired of being told, oh, it is flight traffic control.
Flight traffic control says it must be the airline equipment.
The airline equipment people tell you: No, it is the airport
congestion or it is because they are down to a single runway or
high wind.
You hear every kind of excuse. But in the end the loss of
hours, the loss of productivity, the numbers of extra dollars
spent on hotel bills for cancellations, and so on and so forth
are driving people nuts. Already the sort of competition issue
is on the table in a very significant way in terms of these
mergers and other issues.
So I close by simply saying I am beginning not to have
confidence. I was one of those who fought for compromise. I was
one of those who fought to let the airlines have a chance to
prove that good management can change this. And I do not see
the kind of concerted effort between the FAA and the airlines
and others that indicates to me that we are not going to have
to be a little tougher.
I wait for the final report. I will wait for the final
report. We have got until December. But there is nothing that
gives me great confidence that smart people are applying their
ingenuity to creative means of providing people with greater
choice and capacity to be treated more decently in this
process.
I thank you, Mr. Chairman. I am sorry to go on longer.
The Chairman. Senator Gorton.
STATEMENT OF HON. SLADE GORTON,
U.S. SENATOR FROM WASHINGTON
Senator Gorton. Well, Mr. Chairman, I will put my formal
statement in the record and just reflect that, beginning a
couple of years ago and climaxing a year ago, we as well as the
FAA were getting an increasing number of complaints, some of
them extraordinarily serious. Some wanted to cure this problem
by passing a law. The airlines asked to do it voluntarily and
came up with the commitments that we see sitting before us
here.
I think it is really only a relatively few months since
they have been implemented. But the complaints have been
increasing during that period of time rather than decreasing.
It is an automatic American response to say, well, there ought
to be a law. I am not sure that there ought to be a law and
that any government entity is going to do any better. But the
concerns voiced here are real concerns and are a real threat to
the airlines unless they do do better.
I think Senator Kerry is correct when he says we ought to
wait for the final report before we determine what, if any,
actions should take place next.
It is not all airlines. Some of it is the FAA. But the
airlines are the victims of their own success. They are doing
extremely well. They are carrying more and more passengers
every year, and that means the burden on them to do things
right is greater. This hearing itself should be one more in a
series of wakeup calls.
[The prepared statement of Senator Gorton follows:]
Prepared Statement of Hon. Slade Gorton, U.S. Senator from Washington
I tend to be skeptical of any proposal to regulate an industry.
Government intervention in any aspect of the marketplace must occur
only when necessary and under extraordinary circumstances. That is why
I resisted initial attempts to impose federal customer service
standards on the airlines. I far preferred the approach taken by the
Committee last year that gave the airlines a reasonable opportunity to
make improvements on their own.
I fully understand the challenges facing the airlines. Deregulation
of the airline industry, coupled with a booming economy has created
increased demand for their product. More passengers are flying safely
than ever before. In 1999, over 635 million passengers took to the
skies. Planes are packed with passengers as airlines use complicated
yield management systems designed to fill every possible seat.
While this is good news for the airlines, and their shareholders,
this is not such great news for consumers. Passenger complaints are
reaching record levels. Most of these complaints are based on a
negative experience that has a significant impact on their travel
plans. Canceled or delayed flights impact about 20% of all air
travelers. While this number may seem low compared to the 80% of on
time arrivals, that leaves roughly 127 million passengers that are
delayed or stranded annually.
Whether it is anecdotal horror stories, the increasing number of
complaints sent to DOT, or public opinion polls, there is widespread
displeasure with the state of air travel, and all indicators have been
headed in the wrong direction. Air travel is no longer a luxury, as it
was before deregulation. It has become a form of long-distance mass
transit and an essential part of our society and economy. The public
now expects minimum levels of customer service.
Some of the blame for these problems may lie with the Federal
Aviation Administration. Some would even argue that the blame lies with
Congress, although I don't think that would be wise at this point.
Especially due to the fact that the recently passed AIR-21 bill
provides record levels of funding for our aviation system. Although I
don't feel that the airlines are solely to blame for their woes, they
must take responsibility for increasing customer dissatisfaction.
With the issuance of the Inspector General's interim report, we
have reached the first notable milestone in the review of the airlines'
efforts to improve customer service since their plans took effect last
December. The more important milestone will occur in December when the
IG issues the final report, which will contain a more fully developed
analysis of the airlines' progress.
As we will hear today, the results of the IG's testing to date have
been mixed. I had sincerely hoped that there would be more substantial
improvement than just mixed results. The airlines have been on notice
for more than one year that Congress may take stronger action in this
arena. Although their plans have been in place for six months, the
airlines have been painfully aware of the problems for much longer.
My natural resistance to further congressional action on this issue
is being tested by the airlines. Customer service is usually subject to
the strong forces of the free market. If customers do not like a
business's service, they will usually vote with their feet. But the
airline industry operates in an environment that sets it somewhat
apart. Too many air travel markets lack multiple competitors and market
entry can be difficult. When all parts of the system are not subject to
vigorous competition, the discipline of the market is weakened. In that
sense, the airline industry may need closer attention than others.
At the same time, we must not lose sight of everything that the
airlines do right. Thousands of flights, passengers, and bags are
handled in a safe, timely, and satisfactory manner each day. Given its
size and complexity, we have an outstanding air transportation system
that no other nation can match. But it is a system that is becoming a
victim of its own success. Aircraft are being filled up more
efficiently than ever and more flights are filling the skies. The
system is starting to burst at the seams on several levels. Whenever
there is greater congestion in any environment, there is likely to be
greater friction. At such times, sensitivity to customer needs becomes
more critical.
I still support fully deregulation of the industry. The less need
for governmental interference, the better. I am certainly not ready to
consider any additional action at this time. The IG's final report may
be a turning point, however. The airlines still have ample time to
improve their overall performance. I hope they will heed the warning
signs of potential government interference. If the IG's final report is
negative, there will be little tolerance of airline claims that they
need more time.
The Chairman. Senator Bryan.
STATEMENT OF HON. RICHARD H. BRYAN,
U.S. SENATOR FROM NEVADA
Senator Bryan. Thank you very much, Mr. Chairman. Let me
try to be brief because we have got a vote.
I think all of us are venting this morning and that is
because we are frustrated. We are frustrated, not because we
are Members of Congress, but because we are passengers, we are
users.
I think it is fair to say that the system is overloaded in
terms of volume of passengers. Today, airline travel, to be
very honest, is not much fun. I mean, the airports are crowded
and congested. It is a sea of humanity moving from one gate to
another. That is an issue that is broader than the focus of our
discussion here this morning.
But I think what my colleagues are talking about, among
other things, is No. 2, ``Notify customers of known delays,
cancellations, and diversions.'' I have traveled back and forth
from Nevada almost every weekend for the last 12 years. The
last 4 weeks have been an absolute nightmare, most of it, in
fairness, weather-related out of Chicago. You cannot account
for the weather. Nobody that is reasonable and rational holds
you accountable for that.
But let me just share a couple of examples. We all share
anecdotal experiences. In Chicago for a period of 5 hours,
canceled from one flight to another, probably legitimately. But
as you look at the monitor, all of a sudden the flight that you
have been rescheduled on has disappeared from the monitor. What
has happened? You wait in line to get the answer and they say:
Oh, that plane has been canceled, too. This cancellation is not
even on the monitor.
You will be racing from a session here to the airport. You
get downstairs. The monitors say the plane is on time. You have
nearly a cardiac arrest as you are racing to get to the
counter, and you find out that the plane that you are scheduled
to depart on has not left its point of origin, it has not even
arrived. That misinformation on the monitor is something that
is correctable.
My wife was the victim of a cancellation last week as she
was traveling to visit our little granddaughter in Rochester,
New York. The individual who was at the counter did not even
have the basic information as to what options were available.
I would say with great respect, acknowledging all of the
difficulties that you face, and that not everybody in the
traveling public is reasonable or rational--we all understand
that; we are in a line of business in which we deal with the
public every day. But I must say I do not see any improvement
since the last time we visited, and I will be anxious to hear
your response to my comments as well as others.
Thank you very much, Mr. Chairman.
The Chairman. Senator Rockefeller.
STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
Senator Rockefeller. Thanks, Mr. Chairman.
I will put my statement in the record and I agree basically
with what Senator Gorton said. But I will say that I think
there have been some improvements, but I do not think they have
been what I would have expected. The airline folks I hope will
remember that Senator Gorton and I indicated at our press
conference that the airlines were going to be given a chance,
but if there were not going to be improvements there was going
to be legislation.
I do not like legislation because I think it is a lousy
idea. I think we do a lousy job at it. The Congress would
typically overreact, some people would showboat, and it would
not be good.
But I think it is No. 2 and No. 3, on-time baggage
delivery. I am really, really fed up with slow baggage
delivery. Not on all airlines. I have seen some improvement. On
some I have seen some almost what I think is disimprovement.
But the one group we have not blamed is ourselves, and when
we talk about the FAA we are talking about ourselves. We are
the ones who have failed to fund air traffic control. We are
the ones. The thunderstorms are not just the acts of God. They
are the acts of what we have not done in order to upgrade
computer systems to allow all of this to work itself through a
nationwide system.
So every one of us are to blame for customers' frustration.
But the airlines have spent a lot of money and they have made
some improvements. There are those little mobile units
traveling here and there to try and please passengers, make
life more convenient. Those things have happened. There is more
space in some places. Those are heavily advertised. But the
question is is the movement moving--is it going fast enough?
My last point, Mr. Chairman, is that this is an interim
report. Some will want to jump upon this like it is the final
report. The final report will come at the end of the year. That
will be the report that we need to react on.
Mr. Mead, I congratulate you, sir, on the work that you are
doing. But this is a serious situation and there is a lot of
blame to be cast in many directions, perhaps some of it toward
the airlines' insufficient intensity. Maybe they did not think
we meant it. Maybe they do not think Slade and I mean it. I do
not know, but we have got a public to satisfy and we ourselves
have been very slow in Congress to give tools for all this to
improve.
I might say, even though we did do an FAA bill, it is going
to take several years for it to kick in and be effective, and
that will cause people to blame airlines where sometimes they
should be blamed, where sometimes we should be blaming
ourselves in Congress for having failed to do our duty by the
nation's air system.
Thank you, Mr. Chairman.
[The prepared statement of Senator Rockefeller follows:]
Prepared Statement of Hon. John D. Rockefeller IV,
U.S. Senator from West Virginia
Thank you, Chairman McCain and Senator Hollings, for
holding this very timely and important hearing.
Almost exactly one year ago, the Chairman, Senator
Hollings, Senator Gorton and I joined together to work with the
major airlines on a plan to improve customer service. Chairman
McCain, together with Senator Wyden, had introduced legislation
to address what seemed to be a burgeoning customer service
crisis across the country. Congressman Shuster in the House had
also introduced so-called ``passenger rights'' legislation. And
Vice President Gore and Secretary Slater led an effort in the
Administration to do the same.
Clearly, the American people had spoken about the lousy
service and unfair treatment they were receiving, and all of us
in Washington wanted desperately to put something in motion to
solve the problem.
The difficulty we ran into is not an uncommon one. It was
and is the difficulty of coming up with a one-size-fits-all set
of rules for a highly complex industry. It was and is the
difficulty of trying to do something that will help consumers
without micro-managing the running of an airline.
Telling the carriers that they must announce a delay at
exactly 20 or 30 minute intervals, regulating the size and
pitch of airline seats, setting specific definitions for what
constitutes ``food'' in an emergency, and writing the script
for the telephone reservation agents seemed to be a bit much--
or at least a bit much for a first step.
So, instead, we implored the airlines to take the first
step themselves--to develop a common set of minimum, industry-
wide customer service standards. To acknowledge that their
service has not kept pace with the surge in air travel in the
past decade, and to re-commit themselves to the effort.
Last June, the ATA member carriers came forward with a new
Airline Customer Service Commitment called ``Customer First.''
They promised to do more and to do better--or in some cases
actually to do at all some of the things they were supposed to
have been doing all along--for their customers.
They made 12 customer service promises, ranging from
quoting the lowest available fare and notifying customers about
delays, to paying more for lost bags and giving prompt refunds.
They committed to better treatment for disabled passengers and
minors; they promised to develop emergency plans for planes and
passengers stuck on a runway; and they took responsibility for
assigning senior personnel the responsibility for handling
complaints within 60 days, among other things.
They agreed to fully cooperate with the DOT Inspector
General in a comprehensive, ongoing audit of their efforts and
their results.
Some critics immediately declared there was nothing new
here and that the effort was useless before it even got off the
ground. Certainly, every one of the items on the commitment
list was supposed to be being done by at least one of the major
carriers at least some of the time. And in a few cases, they
were to have been done by all of the carriers all of the time
under existing regulations. But none of these commitments were
a part of the routine practice of all of the airlines and none
were being implemented in a comprehensive way. None were being
given priority status at the airlines.
So, I joined with the Chairman and Subcommittee Chairman
and Ranking Democrat in supporting the voluntary effort as an
important and meaningful first step. I saw it as an
opportunity--not just to avoid legislation and avoid regulatory
micro-managing, but more importantly to get better results for
consumers. My hope was that the airlines would take the effort
seriously, make a major investment of human and financial
capital in the effort, and actually begin to compete with one
another in the service arena in ways we haven't really seen
since deregulation.
I am grateful to the Inspector General Ken Mead for the
tremendous effort he and his staff have made in monitoring this
initiative. I am interested to hear from him at this mid-point
in the process about how its going--whether the airlines have
followed through on the commitment and whether there is any
preliminary feedback on the results.
I would emphasize the word ``preliminary'' in that context
because I think it goes without saying that we shouldn't be
making any grand pronouncements one way or the other before the
full tests and audits have been completed and the results have
been analyzed. There is undoubtedly more work to be done and we
have all made clear that, if the voluntary approach fails, then
we will have no choice but to consider a regulatory approach.
I understand that the early signs are mixed and this is an
opportunity for some dialogue about that. I want the airlines
to know clearly that this Committee expects them to comply not
just with the letter of this agreement, but with its spirit.
And I want to assure the airlines that we in Congress know
that air traffic control and airport infrastructure deficits
are a major contributing factor to the customer service
challenge. With AIR-21 we have finally enacted legislation to
begin to meet our responsibility in the aviation system, but it
will take time--a very, very long time--to fix our side of the
equation.
Finally, I would like to note before we start today that
while we must always pay very careful attention to the human
side of the passenger experience, we shouldn't lose sight of
the human side of the airline experience. By that I mean the
tens of thousands of airlines employees who care deeply about
their jobs and have taken this customer service effort on in
their day-to-day work lives.
I would very much regret if the message to employees from
this hearing or this report is a discouraging one. Gate agents,
reservationists, flight attendants, baggage handlers and
mechanics--are the ones on the front lines every day. None of
us would suggest that these employees, who are themselves also
airline consumers, want or intend to provide lousy customer
service.
Well, these employees must not think that all we in
Congress have seen in the last year is business as usual. I
hope, instead, that our message to those on the front lines is,
first, thank you and, second, stay the course.
We know you are trying, and in many respects succeeding
under very challenging circumstances. We know that safety is
your top priority and that you deliver millions of passengers
safely every single day. You have tough jobs, and we want you
to succeed in this customer service effort.
The Chairman. Thank you, Senator Rockefeller.
When we return we will begin with you, Mr. Mead. I think it
is going to be about 5 to 10 minutes because we have 2 votes,
one that is just concluding now and one beginning.
I just would make one comment. I have been a member of this
Committee for 14 years. I know of no time that Congress has not
funded the request of the FAA for the modernization of the air
traffic control system. I think it is a scandal the way the
money has been wasted by the FAA, but I know of no time where
Congress has withheld funds. In fact, it is remarkable the
amounts of money that have been wasted in failed efforts to
modernize our air traffic control system.
We will have, this Committee will have, a hearing
concerning the FAA and the failures of the air traffic control
system in the near future.
I thank the witnesses for their patience. I apologize for
the parliamentary procedures that are taking place, and we will
be back and recommence the hearing as soon as possible. Thank
you.
[The prepared statement of Senator Hollings follows:]
Prepared Statement of Hon. Ernest F. Hollings,
U.S. Senator from South Carolina
Mr. Chairman, I am glad that we are here to discuss the interim
findings of the Department of Transportation Inspector General, Mr.
Mead. Last year, the Chairman worked with other Members of this
Committee to force the airlines to first admit that service was awful,
and then to ensure that they began to make changes. Some Members wanted
to dictate point by point what should be done. Instead, the air
carriers developed their own ``voluntary agreement,'' which was
bolstered by legislation increasing the fines on air carriers for
consumer violations from $1,100 to $2,500 and doubling the baggage
liability limit to $2,500. Additionally, this legislation also directed
Mr. Mead to report to us first on whether the carriers had implemented
the voluntary agreement, and then again in December on the
effectiveness of the carrier actions.
On Monday, the Chairman and I, along with Senator Rockefeller and
Senator Wyden, sent Mr. Mead a letter asking him to continue auditing
the carrier customer service performance. All of us know that the
industry has worked hard to improve safety, but we have yet to see the
result of improved customer service. It is now a little over a year
since the air carriers signed the voluntary agreement committing to 12
points of improvement in customer service. While Mr. Mead's report will
acknowledge that the air carriers have made significant effort towards
bettering customer service, I will need to be firmly convinced that
change has occurred. I move through the airports each week. I see the
long lines, and have experienced them myself. So far, I have not seen
the benefits of the voluntary agreements.
I suspect that Mr. Carty, Ms. Escarra and Ms. Jopplin will explain
that what each of their carriers are doing is making improvements, and
I know they are spending money to make changes. Continental just got an
award from Ziff Davis for its service. Delta will show us its new
screens today, and apparently is investing about a billion dollars in
customer service items. American has taken rows out of its planes and
beginning to use new voice technologies at a number of airports, along
with installing new mobile check-ins at 65 airports. Each of the
carriers retrained their employees to demonstrate the point that
consumers matter. I do not know that it will be enough, but it is a
start.
Let's look at one area--delays. Why does it come as a surprise to
air carriers that delays occur? Delays are up 50% since 1995. This is
not a new phenomenon. I know they happen, the airlines know they
happen, but many times they are not prepared to handle the
consequences. Some carriers try to place the blame of delays on the FAA
and air traffic control; yet, we have thunderstorms every year. We have
snow storms. We have ATC outages.
Cancellations increased 68 percent between 1995 and 1999, from
91,905 to 154,311. At the nation's 28 largest airports, the number of
flights experiencing taxi-out times of 1 or more hours increased 130%,
from 17,164 to 39,523, during the same time frame. Despite these
dramatic numbers, it is the manner of response and accommodation by the
carriers, no matter the cause of the delay or cancellation, that will
go a long way to convincing Congress not to legislate. The burden of
proof is on the carriers. For each of the 12 parts of the voluntary
agreement, our attitude will remain ``prove it.''
Delays are often cited as the primary root of customer
dissatisfaction and certainly, flight problems are the number one
complaint received by the Department of Transportation. Complaints are
up 115% for 1999 over 1998, and up 74% for the first 4 months of 2000
(compared to the same period last year). Although these numbers do not
reflect the new customer service plans, they do reflect the tremendous
task of addressing customer dissatisfaction. There was a time when
businesses courted one with the axiom, ``The customer is always
right.'' I am sure that we all remember this. In this economy, though,
it is a sellers' market. There are more than enough customers to go
around and this goes double for the airline industry. According to the
FAA Forecast Information, daily enplanements are expected to
approximately double over last year's figure to more than 1 billion by
2009.
In the best scenario, the aviation infrastructure would keep up
with demand. And certainly, as a national asset, the airspace should be
modernized and the infrastructure should expand to meet the demands of
the market. In recognition of this, we passed the FAA Reauthorization
Act--FAIR 21--unlocking the Trust Fund and increasing the funding for
infrastructure and modernization of equipment and airspace. But, as
Rome was not built in a day, neither will the revamping of our airspace
and infrastructure occur overnight.
Despite these hurdles, industry has the obligation to provide
passengers with safe and courteous service. On the latter point, they
have acknowledged that they have fallen down on the job and they have
not yet righted the ship. Last summer's voluntary agreement, accepted
in lieu of legislation, would have prescribed service levels and if
there is not more significant improvement by Mr. Mead's final report,
we will be right back at that point. It is inexcusable that passengers
sit on the tarmac for hours at a stretch and that it is a herculean
task to work through the paperwork to receive compensation for lost
luggage. For an industry that is self-described as a customer service
business, the airlines must do better.
[The prepared statement of Senator Snowe follows:]
Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine
Thank you, Mr. Chairman, for holding a hearing on this important
matter. On behalf of the millions of air passengers traveling every
year, I want to thank you for your attention to this issue.
Coming from a state which is vastly under served in terms of access
to air service, I can tell you the air passengers in Maine need some
protections from a service industry which too often seems to be more
concerned about the bottom line and profits than the service they
provide. That is why I became an original cosponsor of legislation
reported by this Committee last year--the Airline Customer Service
Commitment Act--which was designed to spur improvements in airline
customer service. I also fought for provisions in AIR-21, the FAA
reauthorization bill, to enhance a range of customer service
protections, including protections for disabled travelers.
Among the major provisions of the Airline Customer Service
Commitment Act were requirements to: direct the DOT Inspector General
to report to Congress on the effectiveness of the airlines in living up
to their customer service commitments; direct the DOT to increase the
airlines' financial responsibility to passengers for lost bags; and
significantly increase the civil penalties against airlines that
violate aviation consumer protection laws.
Such customer service improvements are long overdue, Mr. Chairman.
According to figures from the U.S. Department of Transportation, the
number of passenger complaints per 100,000 passenger boardings was 26%
higher in 1998 than the year before. The airlines argue that despite
the increase in consumer complaints, the actual number of complaints--
roughly 6,000 annually--is relatively low when taking into account the
approximately 500 million aircraft boardings that occur annually.
Nevertheless, one customer service survey found that of a list of
33 major American institutions, only the Internal Revenue Service
received worse consumer satisfaction ratings than the airline industry.
And DOT estimates that for every complaint it receives against an
airline, the airlines themselves receive anywhere from 100 to 400
complaints. You know things are really bad when the situation has sunk
to this level . . .
This is why Congress and the airlines have both taken steps to
address customer service concerns. Last year, the airlines voluntarily
entered into a joint agreement to make a range of customer service
improvements, such as offering the lowest fare available, notifying
customers of delays, cancellations, and diversions, and being more
responsive to customer service complaints in general.
In addition, the FAA reauthorization bill, which was signed into
law earlier this year, as well as last year's transportation
appropriations legislation, included provisions designed to bring a
greater focus to the concerns of air travelers.
For example, the FAA bill included a provision I authored requiring
air carriers to notify the purchaser of any expiration date of an
electronic ticket. The measure also required the DOT IG to monitor the
implementation of each airline's customer service plan, and evaluate
and report on how each airline is living up to its commitment. The bill
also added preventing discrimination against the handicapped as one of
the responsibilities of the DOT consumer office.
The FY2000 DOT appropriations legislation included language
requiring the DOT IG to investigate whether air carriers are engaging
in unfair and deceptive practices and methods of competition when they
sell tickets on flights that are already overbooked or offer different
low fares through different media (such as the telephone or the
Internet). The IG was also required to report to Congress on the extent
to which barriers exist to access to comparative price and service
information from independent resources (such as travel agents) on the
purchase of airline tickets. In addition, the legislation required the
IG to report on the extent to which carriers deny travel to airline
consumers with non-refundable tickets from one carrier to another.
Finally, the legislation expressed the sense of the Senate that the
penalty for involuntary ``bumping'' of passengers should be doubled.
None of this is to say that airlines have an easy job. I understand
that airlines face significant challenges, including: efforts to
increase efficiency and at the same time remain profitable; increased
demand for flights; air travel delays due to inadequate airport and air
traffic control infrastructure; and a range of other factors.
In addition, the airlines have a responsibility to their share
holders. But they also have a responsibility to the public. In my view,
the airlines need to remember that they must serve the passenger if
they wish to continue serving the share holder. Because, Mr. Chairman,
without the passenger, there would not be any share holders.
In recent years, I have received numerous complaints from
constituents in Maine who have had horrible experiences while traveling
on commercial carriers. These experiences do not reflect a real
commitment on the part of some major airlines to customer service, or
even an understanding of what travelers expect.
I believe that customer service requires a real commitment--that,
for example, your bags arrive at your destination sometime around the
time you do. While it is preferable to have those bags arrive
simultaneously with you, it would be nice to at least have them within
24 hours of your arrival.
Is it too much to ask that your bags arrive within a reasonable
period of time after you do . . . ? Is it too much to ask that you
arrive at your destination without having to be held prisoner by the
airlines . . . ? Is it too much to ask that you be able to redeem
frequent flyer miles for a ticket without unreasonable restrictions . .
. ?
I hope we can explore some of these issues and concerns today. I
look forward in particular to hearing from the DOT IG on the results of
the work they have been doing in this area. And I firmly believe that
we must act on the findings of the IG, in order to ensure that the
airlines improve customer service in real, tangible ways.
Thank you, Mr. Chairman.
[Recess.]
The Chairman. The hearing will reconvene. The hearing will
reconvene.
We would like to begin with the Honorable Ken Mead. But
before we do, I notice that we have some other people at the
table who obviously are here to add to this hearing, so
perhaps, in addition to Mr. Carty and Mr. Mead, perhaps we
could have for the record the other people at the table
identify themselves. We will begin with you, Mr. Dupont.
Mr. Dupont. Yes. I am Mark Dupont. I work with American
Airlines as the Managing Director of the Customer Services and
the Liaison for the Customer Services Plan for American.
The Chairman. Welcome. Mr. Macey.
Mr. Macey. Hello. I am Scott Macey. I am with the
Department of Transportation Office of Inspector General. I am
the Project Manager for this review.
The Chairman. Ms. Escarra.
Ms. Escarra. Good morning. I am Vicki Escarra, Executive
Vice President for Delta Air Lines. I have responsibility for
45,000 of the front line men and women who are in charge of
customer service.
The Chairman. And Ms. Jopplin.
Ms. Jopplin. Good morning. I am Mary Jopplin. I am the
Director of Customer Service for Continental Airlines and I
have been the Customer First liaison on behalf of Continental.
The Chairman. Welcome to all of you.
The Chairman. Mr. Mead, welcome back before the Committee.
STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL,
DEPARTMENT OF TRANSPORTATION, ACCOMPANIED BY: SCOTT MACEY,
PROJECT MANAGER, AIRLINE CUSTOMER SERVICE REVIEW, OFFICE OF
INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION
Mr. Mead. Thank you, Mr. Chairman.
I am not going to repeat ground that you have already been
over. I appreciate the opportunity to be here today. I know
this is a very sensitive review on a subject that can at times
be very controversial. I want to note right up front, before I
get into the meat and the substance of this, that the airlines
agreed with you to cooperate in our review and now, 6, 7 months
into it, I want to note that the airlines as well as the Air
Transport Association cooperated fully with us in doing our
work. I think that is an important note and tone to set here.
Also, I would ask that the report that we are issuing be
submitted for the record.*
---------------------------------------------------------------------------
* The information referred to has been retained in the Committee
files and is available on the web at www.oig.dot.gov/
show_pdf.php?id=48.
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The Chairman. Without objection.
Mr. Mead. Thank you, sir.
As shown in this chart in front of me, the commitment
addresses such matters as improved communication with
passengers, quoting the lowest available airfare for which you
are eligible, timely return of luggage, allowing reservations
to be held or canceled without penalty, and meeting passengers'
essential needs during long on-board delays.
Overall, in our testing to date we have found that the
airlines are making a clear and genuine effort at strengthening
the attention paid to customer service, but bottom line results
are mixed. The airlines have a long way to go to restore
customer confidence.
The Chairman. Could I ask that we move that in a way that
all Members of the Committee--maybe we want to put it over
there, so that all Members of the Committee can see that chart.
Maybe our staff can help out here.
Is that chart relevant to your presentation?
Mr. Mead. Yes, sir. I am going to refer to it just once, so
he can probably just hold this up when I come to it.
The Chairman. OK.
Mr. Mead. I want to say also that certain factors in
determining the overall quality of customer service were not
covered in the commitment or the plans, but the airlines have
implemented other initiatives to improve customer comfort and
convenience. I will let the airlines speak for themselves on
what those initiatives that went beyond the commitments are,
but I want to point out that I think the reason that they did
some of these other initiatives--one of them is additional leg
room--was competition, the force of competition, which is an
underpinning of our system.
I also want to point out that the commitment does not
directly address underlying reasons for customer
dissatisfaction, such as extensive flight delays and
cancellations, baggage not showing up on arrival, long check-in
lines, and high fares in certain markets. In our opinion, until
those areas are effectively addressed by the airlines, FAA, and
a host of others, there will continue to be widespread
discontent among the traveling public.
Now, I would like you to focus on this chart for a minute.
Can everybody see it? Can the members see it?
The Chairman. Yes.
Mr. Mead. The increases in flight delays and cancellations
have fueled customer dissatisfaction. I know you have heard
that before, but I want to share with you a couple of
statistics that are quite telling about what has happened over
the past 5 years. Cancellations have increased 68 percent in
the last 5 years. What this chart shows is that at the 28
largest airports, the number of flights experiencing taxi-out
times of 1 hour or more increased from about 17,000 to nearly
40,000, which is a whopping 130 percent increase.
The Chairman. How do you account for the drop between 1996
and 1997?
Mr. Mead. I would have to get back to you on that.
The Chairman. I was just curious if there were some
upgrades in the system or what. It does not matter, it does not
matter.
Mr. Mead. Those figures represent the point in time after
the plane left the gate and basically reflect the time spent on
the runway after departure.
The Chairman. So on-time takeoff and landing is somewhat
skewed by these numbers.
Mr. Mead. Yes, as is the legal definition of what an on-
time departure is. An on-time departure is backing away from
the gate within 15 minutes or less of the scheduled departure
time. If you leave 14\1/2\ minutes late, you are on an on-time
departure. The fact that you may spend 3 or 4 hours on that
runway is not germane to the on-time departure statistic.
I would like to cover complaints for a moment. DOT has
ranked flight problems as the number one air travel complaint.
I do not think that is surprising. Customer care and baggage
complaints ranked as number two and number three.
Senator Kerry. Just a quick one. Who sets that standard of
on-time? Is that industry-set?
Mr. Mead. No, that is a regulatory standard. I do not think
it is anything Congress came up with. I think it is a
regulatory standard. And I am not sure when it was first
established that people appreciated what the implications were
going to be over time.
I think that backing away from the gate is probably a
legitimate measure for the airlines to use internally, but to
tell the American public that you have had an on-time departure
when you are sitting on the runway for 2 hours is absurd. So it
can be changed by regulation. In fact, we issued a report a
couple years ago suggesting that that be done.
The Chairman. Well, I hope we will take that suggestion
more seriously.
Mr. Mead. Anyway, the top complaints are flight problems,
customer care, and baggage. They account for roughly 70 percent
of the complaints received by DOT, which have really been
increasing. The complaints doubled in 1999. You already heard
that. The track record for 2000, at least for DOT, is they are
going to exceed the number that were filed in 1999.
Now, you will hear that the Internet is responsible for
that. In part it is, but I think we ignore the increase in
those numbers at our peril. They are clearly an indication of
widespread discontent.
The commitment and the airlines' plans for implementing
them, implementing the commitment, were essentially a
commitment to substantially re-emphasize attention, resources,
and focus on customer service. The corporate board rooms of the
airlines realized that improvements were needed in the way
passengers were treated. I think a number of the CEO's will
tell you that the commitments were a good thing and that the
prompting that led up to that was necessary.
Two of the provisions of the commitment were new policy.
The commitment to hold a non-refundable reservation for 24
hours without penalty and the increase in the baggage liability
limit. The 24-hour hold provision was completely new. As for
the remaining ten provisions, the airlines agreed to focus on
better execution of customer service policies and procedures.
Many were required by law, regulation, under the airlines'
contract of carriage or were part of the airlines' operating
policies. The baggage liability limit was the other new one.
That increased from $1250 to $2500.
A few of the provisions had subsets that provided new
policies, such as notifying customers in a timely manner of the
best available information regarding delays, making every
reasonable effort to return checked bags within 24 hours,
issuing an annual report on frequent flyer mile redemptions,
and providing information regarding aircraft configuration like
seat width and leg room.
The preliminary results on the implementation of the
commitment and plans are mixed. We identified some areas that
appear to be working well, but also areas that need
improvement. For example--and I will just provide some
highlights here--the airlines pledged to offer the lowest fare
available. Actually, this means the lowest fare available via
the telephone. Testing of this provision showed that the
airlines were usually offering the lowest fare available via
the telephone.
But there were a sufficient number of exceptions that we
think this is an area the airlines need to pay special
attention to. I want to note that the problems we identified
were not deliberate on the part of the airlines. They were due
to employees not following established procedures.
Also, the airlines need to disclose when you call up on the
phone that the lowest fare available over the phone is not
necessarily the airline's lowest available fare. Some airlines
already do this, others do not.
Notify customers of known delays, cancellations, and
diversions. We found that the airlines were making a clear and
substantial effort, both at the airport and on board the
aircraft, to improve the frequency of communication with
customers about delays and cancellations. They were also making
technology investments in communications equipment and in media
displays that are germane to this particular commitment. But we
found major room for improvement in the accuracy, reliability,
and timeliness of the airlines' communications to customers
about the status of flights.
So what we have is a very substantial effort to communicate
more information, and to communicate more frequently, but the
content of the information needs to be improved.
We found several airlines repeatedly pointing to air
traffic control as the problem. Some would point to FAA by
name. And in a number of these cases, the delay was due to
extremely bad weather, crew not available, or maintenance
problems. Sometimes the plane was not there and it was delayed
getting there by a storm, and I suppose some of the airlines
think that air traffic control can deal with all manner of
weather.
We think the airlines that have not already done so ought
to establish systems for notifying passengers before they show
up at the airport of cancellations and extended delays.
On-time baggage delivery. Passengers expect to find their
checked baggage on arrival, but this commitment actually does
not deal with that, but with the misrouted or delayed baggage
and its return within 24 hours. We found that the airlines were
not consistent in what ``within 24 hours'' means and they need
a formal definition. For instance, some airlines started this
24-hour clock when a passenger filed a missing bag claim, which
I think is probably the right time to start the clock; others
only after the bag showed up at the destination airport.
Allow reservations to be held or canceled. As I said
before, this is a completely new customer service commitment
and it applies to otherwise non-refundable tickets. It should
be real popular with the consumer. Essentially, it allows the
customer to hold a telephone reservation without payment for 24
hours or cancel a paid reservation without penalty for up to 24
hours. It is up to the airline which one of those two options
it picks.
Our preliminary testing shows that with a few exceptions
the airlines were living up to that commitment, but where a
ticket purchase was required the reservation agents typically
did not tell us that we could receive a refund if the
reservation was canceled within 24 hours. We do not think the
customer should have to ask if this option is available. We
think the airline should affirmatively disclose it, and that in
fact is the policy of a number of airlines.
Provide prompt ticket refunds. Essentially, the airlines
agreed to comply with existing law here and we did not find
compliance problems with this commitment.
Properly accommodate disabled and special needs passengers.
I am not reporting results on this today, Mr. Chairman, because
we are working with groups representing these passengers to
collect their views and we feel that the benefit of their
expertise will be invaluable, and we have not gotten a complete
portfolio of these views yet.
Meeting customers' essential needs during long on-board
aircraft delays. This provision and the plans to implement it,
they use general terms like ``food,'' ``make every reasonable
effort,'' ``for an extended period of time,'' or ``emergency''
in meeting passenger needs. These terms do not provide the
passenger with a clear understanding of what to expect and
these terms and provisions need to be clarified.
In addition, in our initial checks less than half the
airlines had comprehensive customer service contingency plans
in place for handling extended delays on board aircraft. All
the airlines now tell us that they have them in place and we
have to go out and verify airline by airline that that is in
fact the case. We found examples where the airlines have
invested in such things as air stairs and have secured special
backup supplies of food and beverages.
Handle bumped passengers with fairness and consistency. We
found several inconsistencies and ambiguities between the
check-in times in the airlines' plans and those identified on
the airlines' contracts of carriage. For example, in its
contract of carriage one airline says that passengers must
check in 10 minutes prior to the flight's scheduled departure,
but on the customer's receipt the check-in time is stated as 20
minutes. Check-in times also vary from airline to airline.
The reason check-in time is relevant is because he or she
who gets there last is the first to get bumped. So it is
important that you know what time you are supposed to check in.
Be more responsive to customer complaints. It seemed to us
that the airlines appear to be taking this commitment
seriously. That does not mean that customers get a satisfactory
response that takes care of all their concerns, but it does
mean that they are getting substantive responses and they are
getting them usually well within 60 days. The commitment
specifies 60 days. They are clearly more than just mere
acknowledgments that we received your complaint, we are sorry
you had an unfortunate flight experience. They are much more
meaty than that.
Now, a key to the success of these plans is the need for
each airline to have a credible tracking system in place. This
is to check compliance with their plan. It should be buttressed
by performance goals and measures. The reason this is important
is because in the long term you do not want to rely on the
Inspector General to have the only tracking system. You want
the airlines to track their performance independently.
Initially, most of the airlines did not have one in place.
They gave us assurances that they would put one in place and we
will verify that. We expect, for example, that when we go out
we will be able to see how good they are doing on returning
lost bags within 24 hours to the customer.
We found that the airlines also need to train non-airline
employees, like skycaps or security personnel, on the airlines'
policies and procedures for customer service, since these
individuals are often mistaken for airline employees. Yet these
individuals have duties that interface with the execution and
implementation of customer service plans, and the public cannot
reasonably be expected to differentiate between those people
who are airline employees and those who are not if both
individuals are responsible for implementing the plan. Five
airlines told us they do not plan to train the non-airline
employees.
Also, the commitments in the airlines' plans, while
promising customer service standards, do not necessarily
translate into legally enforceable passenger rights. Each air
carrier has a contract of carriage, which is the enforceable
document that defines your rights. At present it is uncertain
whether an airline's plan is binding and enforceable on the
airline. Why is that? Well, one airline states right in the
plan that it takes the customer commitments very seriously, but
the plan does not create contractual or legal rights.
So to resolve this question the airlines could incorporate
all the details of their plans right in the contract of
carriage. But based on our results thus far, we are concerned
that, without direction to the contrary, the modified contracts
of carriage might be more restrictive to consumers than
envisioned in the plans. For example, in the critical area of
when an airline will provide overnight accommodations, we found
a contract of carriage that includes restrictions and
limitations not found in the commitment or plan. Whereas the
plan said that they will accommodate people overnight if the
delay is occasioned by airline operations, the contract of
carriage was much more limited and said we will accommodate you
overnight if you are diverted overnight to some other airport
that you had not planned to go to.
Finally, an important issue facing this Committee, I think
facing the appropriators, and facing the DOT is DOT's capacity
to enforce existing customer service regulations, given the
workload. Staff responsible for overseeing and enforcing air
travel consumer protection requirements have declined from 40
to 17 during a period of air traffic growth, more than a
doubling of complaints, and additional consumer protection
requirements.
Back when air travel was not so problematic, you had 40
people out there at DOT that were charged with enforcing all
the consumer protection laws and now we are down to 17. We have
serious concerns, given this situation, about the capacity of
the office at DOT to handle this workload in a responsible
manner.
Mr. Chairman, that concludes our oral statement.
[The prepared statement of Mr. Mead follows:]
Prepared Statement of Hon. Kenneth M. Mead, Inspector General,
Department of Transportation
Mr. Chairman and Members of the Committee:
We appreciate the opportunity to discuss airline customer service
and the efforts taken by the airlines to improve customer service.
Concerned over increasing complaints in air travel, compounded by the
Detroit airport incident of January 1999, when hundreds of passengers
were stuck in planes on snowbound runways for up to 8\1/2\ hours,
Congress considered whether to enact a ``passenger bill of rights.''
Hearings were held in both the House and Senate to discuss the
treatment of aviation passengers and specifically the ``passenger bill
of rights.''
Congress, the Department of Transportation (DOT), and the Air
Transport Association (ATA) agreed that, for the time being,
legislation would not be necessary. Instead, ATA and 14 of its member
airlines (Airlines) executed a document on June 17, 1999, known as the
Airline Customer Service Commitment (the Commitment), to demonstrate
the Airlines' ongoing dedication to improving air travel. The
Commitment includes 12 provisions. Each Airline would prepare a
Customer Service Plan (Plan) implementing the Commitment. The Airlines
also agreed to cooperate fully in any request from Congress for
periodic review of compliance with the Commitment, and we would like to
thank them for cooperating fully with us during our review.
----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
The Airlines Commit to:
1. Offer the lowest fare available
2. Notify customers of known delays, cancellations, and diversions
3. On-time baggage delivery
4. Support an increase in the baggage liability limit
5. Allow reservations to be held or canceled
6. Provide prompt ticket refunds
7. Properly accommodate disabled and special needs passengers
8. Meet customers' essential needs during long on-aircraft delays
9. Handle ``bumped'' passengers with fairness and consistency
10. Disclose travel itinerary, cancellation policies, frequent flyer rules, and aircraft configuration
11. Ensure good customer service from code-share partners
12. Be more responsive to customer complaints]
----------------------------------------------------------------------------------------------------------------
Today, I would like to address three issues: (1) preliminary
results on the implementation of the Commitment and Plans, (2)
improvements needed by the Airlines to ensure the success of their
Plans, and (3) changes to the contract of carriage.
Overall, the Airlines are at the 6-month point in implementing
their Plans. We reported our preliminary results in our Interim Report
on Airline Customer Service Commitment\1\, which we request be included
for the record. We will issue a final report by December 31, 2000, on
the effectiveness of the Airlines' Plans to improve customer service,
including recommendations for improving accountability, enforcement,
and protections afforded to commercial air passengers. By December the
Airlines will have had a full year in which to fully implement their
Plans, and we will be better able to judge the results.
---------------------------------------------------------------------------
\1\ Report Number AV-2000-102 issued June 27, 2000.
---------------------------------------------------------------------------
In our initial observations and testing, we found the Airlines are
making a clear and genuine effort at strengthening the attention paid
to customer service, but bottom-line results are mixed, and the
Airlines have a ways to go to restore customer confidence. The results
include areas where the Airlines can improve upon disclosures provided
passengers, such as fare and refund availability, and required check-in
times.
The Commitment addresses such matters as improved communication
with passengers, quoting the lowest available airfare, timely return of
misrouted or delayed baggage, allowing reservations to be held or
canceled without penalty, providing prompt ticket refunds, and meeting
passengers' essential needs during long on-board delays. However, the
Commitment does not directly address underlying reasons for customer
dissatisfaction, such as extensive flight delays, baggage not showing
up on arrival, long check-in lines, and high fares in certain markets.
In our opinion, until these areas are effectively addressed by the
Airlines, FAA, and others, there will continue to be discontent among
air travelers.
Although certain factors in determining the overall quality of
Airline customer service were not covered in the Commitment or the
Airlines' Plans, the Airlines have implemented other initiatives to
improve customer comfort and convenience. These initiatives include
reconfiguring airplanes to increase the room between rows of seats and
replacing overhead luggage compartments with large, easier to use bins.
We also noted several other important factors concerning customer
service. Each Airline needs to have a credible tracking system for
compliance with the Commitment. The Airlines also need to ensure that
non-Airline employees who interact with passengers are trained on the
Airlines' Plans because non-Airline personnel are often mistaken for
Airline employees. We found that some Airlines' contracts of carriage
terms were less advantageous to passengers than the provisions found in
the Airlines' Plans. Finally, we are concerned that oversight and
enforcement expectations for DOT, the agency responsible for airline
consumer protection, may significantly exceed its capacity to handle
the workload, since staff has significantly declined over the years.
Increase in Flight Delays and Cancellations Fuel Customer
Dissatisfaction
Air travel has doubled since 1980. With this growth has come growth
in delays and cancellations, and customer dissatisfaction with air
carrier customer service. Delays, as measured by the Federal Aviation
Administration (FAA), have increased by over 50 percent, and
cancellations have increased 68 percent in the last 5 years.
Much of the delay is occurring on the ground in the form of longer
taxi-out and taxi-in times (taxi-out is the time between an aircraft
departing the gate and taking off, taxi-in is the time between landing
and reaching a gate). At the 28 largest U.S. airports, the number of
flights experiencing taxi-out times of 1 hour or more increased 130
percent between 1995 and 1999, from 17,164 to 39,523.
The 1999 DOT Air Travel Consumer Report disclosed that consumer
complaints against U.S. air carriers more than doubled in 1999 over the
prior year, from 7,980 to 17,381. Complaints for the first 4 months of
2000 increased 74 percent (3,985 to 6,916) over complaints during the
same period in 1999.
While a contributing factor to the increase in air traveler
complaints is undoubtedly the ease of making a complaint to DOT via the
Internet, the number of complaints and the increase during the first 4
months of 2000 cannot be ignored. They signal a high degree of consumer
dissatisfaction with air carrier service that must be addressed.
Over the last several years, DOT has ranked flight problems
(delays, cancellations and missed connections) as the number one air
traveler complaint, with customer care (such as the treatment of
delayed passengers) and baggage complaints ranked as either number two
or number three. As depicted by the chart, 1999 data show that these
three types of complaints account for nearly 70 percent of all
complaints received by DOT against U.S. air carriers.
Preliminary Results on Implementation of the Commitment and Plans Are
Mixed
The Commitment and the Airlines' Plans for implementing it were
essentially a commitment to place substantially greater emphasis,
attention and resources on customer service. The Airlines realized they
needed to improve the way they treat passengers and that good customer
service begins with the successful execution of, and continuous
improvement to, existing customer service policies and procedures,
programs and plans, as well as systems and technologies.
In developing the Commitment, the Airlines included two provisions
that constituted new policy. The provision to either hold a reservation
without payment for 24 hours or (at the Airline's choice) cancel a paid
reservation within 24 hours without penalty is a new service the
Airlines are providing. Another new provision was to support the
increase in the baggage liability limit from $1,250 to $2,500, which
became effective January 18, 2000.
As for the remaining 10 provisions in the Commitment, the Airlines
agreed to focus on better execution of customer service policies and
procedures, many required by law or regulation, required under the
Airlines' contracts of carriage, or part of Airline operating policy. A
few of these provisions had subsets that provided new policies such as
notifying customers in a timely manner of the best available
information regarding known delays, cancellations and diversions;
making every reasonable effort to return checked bags within 24 hours;
issuing an annual report on frequent flyer redemption programs; and
providing information regarding aircraft configuration (seat width and
leg room).
Our interim results are based on visits to the Airlines' corporate
headquarters and other key facilities, and review of Airline policies
and procedures before and after implementation of the Commitment. This
allowed us to evaluate what impact the formal Commitment had on the
Airlines' customer service. We also reviewed each of the 14 Airlines'
Plans and contracts of carriage to determine whether the provisions of
the Commitment have been incorporated into these documents. To date, we
have visited 25 domestic airports to observe and test portions of the
individual Airlines' Plans that are in place. We are continuing to test
the effectiveness of the Commitment and will provide our results in our
final report. To date, our preliminary results have identified areas
that appear to be working well, as well as areas for improvement, as
illustrated in the following examples.
Offer the lowest fare available--The Airlines agreed to
offer, through their telephone reservation systems, the lowest
fare available for which the customer is eligible. However,
Airlines did not commit to guaranteeing the customer that the
quoted fare is the lowest fare the Airline has to offer. There
may be lower fares available through the Airlines' Internet
sites that are not available through the Airlines' telephone
reservation systems.
We found six Airlines enhanced the provision by (1) offering the
lowest fare for reservations made at their city ticket offices
and airport customer service counters, not just through the
Airlines' telephone reservation systems; or (2) requiring their
reservation agents to query the customer about the flexibility
of their itinerary in terms of travel dates, airports and
travel times to find the lowest fare available; or (3)
notifying the customer through an on-hold message that lower
fares may be available through other distribution sources and
during different travel times.
Testing of this provision showed that Airline telephone agents
were usually offering the lowest available fare for which we
were eligible, but there were a sufficient number of exceptions
to this that it is an area to which the Airlines should pay
special attention. The problems we identified were not
deliberate on the part of the Airlines, but were due to
employees not following established procedures.
Notify customers of known delays, cancellations, and
diversions--For the most part, we found the Airlines were
making a significant effort, both at the airport and on-board
aircraft, to improve the frequency of communication with
customers about delays and cancellations. These improvements
include investments in various communication technologies and
media as well as more frequent announcements to customers.
However, we also found major room for improvement in the
accuracy, reliability, and timeliness of the Airlines'
communications to customers about the status of flights. For
example, several Airlines pointed to the air traffic control
system as the reason for delays, even in cases of extremely bad
weather, crew unavailability, or maintenance problems.
Additionally, with respect to delays, cancellations and
diversions, we found the Airlines are promising the consumer
more in their Plans than they guarantee in their contracts of
carriage. For example, with one exception, the Airlines' Plans
provide accommodations for passengers put in an overnight
status due to cancellations or delays caused by Airline
operations. However, only two Airlines provide for this in
their contracts of carriage.
We suggested the Airlines improve the lines of communication and
streamline the flow of accurate and reliable information
between (1) FAA and the Airlines' Operations Control Centers,
and (2) the Airlines' Operations Control Centers and frontline
personnel who deal directly with passengers. We also suggested
that the Airlines consider making their contracts of carriage
consistent with their Plans to clarify the customers' rights
when put in an overnight situation due to delays,
cancellations, or diversions.
On-time baggage delivery--Passengers expect to find their
checked baggage upon arrival at their destination airports, but
this provision actually deals with the delivery of misrouted or
delayed baggage. The Airlines committed to return the misrouted
or delayed bag to the passenger ``within 24 hours.'' We found
that the Airlines were not consistent in their Plans when
defining what constituted ``within 24 hours.'' For instance,
some Airlines started the 24-hour clock when a passenger filed
a missing bag claim and others only after the bag arrived at
the destination airport. We have also found examples where
Airlines have invested in advanced baggage scanning
technologies to facilitate the return of baggage or increased
staff resources for processing claims.
The Airlines should consider committing to returning unclaimed
and lost checked baggage to customers within 24 hours of
receipt of a customer's claim. The filing of a claim is when a
customer would reasonably expect the 24 hours to begin. Also,
those Airlines that have not already done so should consider
providing a toll-free telephone number for customers to call to
check on the status of their bags.
Allow reservations to be held or canceled--This is a
completely new customer service commitment, which allows the
customer either to hold a telephone reservation without payment
for 24 hours or (at the Airline's option) cancel a paid
reservation without penalty for up to 24 hours. This provision
should be very popular with passengers who book nonrefundable
tickets, because it allows customers to check for lower fares
and time to coordinate their travel without losing a quoted
fare.
Our preliminary testing shows that, with a few exceptions, the
Airlines were living up to this commitment in practice.
However, where a ticket purchase was required, the reservation
agents typically did not tell us that we could receive a full
refund if the reservation was canceled within 24 hours.
Therefore, we suggested that the Airlines requiring a ticket
purchase affirmatively notify passengers that if they cancel
the reservation within 24 hours they can receive a full refund
without a penalty, even on otherwise nonrefundable tickets.
Provide prompt ticket refunds--By agreeing to this
provision, the Airlines have, in essence, agreed to comply with
existing Federal regulations and requirements. The 7-day refund
requirement for credit card purchases has been in effect for
nearly 20 years and is governed by Federal regulations. The 20-
day refund requirement for cash purchases has been in effect
for over 16 years. Our preliminary testing did not show
compliance problems with this provision.
Properly accommodate disabled and special needs passengers--
This provision is all about disclosing policies and procedures
for handling special needs passengers and for accommodating
persons with disabilities. It does not require the Airlines to
go beyond what is in the regulations for accommodating persons
with disabilities or to improve the treatment of special needs
passengers. Of the 12 provisions addressed in their Plans, we
found the Airlines disclosed more detailed information to
passengers on this provision than on any other. Between now and
October 2000, we will assess how well the Airlines are
complying with regulations for accommodating persons with
disabilities. During this process, we will also collect views
from groups representing the disabled, which we will consider
in reaching a conclusion on whether this provision was
effective.
Meet customers' essential needs during long on-aircraft
delays--During our initial visits to the Airlines, less than
half had comprehensive customer service contingency plans in
place for handling extended delays on-board aircraft at all the
airports they served. Subsequent to our initial visits, the
Airlines have all stated that comprehensive customer service
contingency plans are in place for addressing delays,
cancellations and diversions. Over the next several months, at
the airports we visit, we will determine whether the (1)
Airlines' customer service contingency plans are in place, (2)
Airlines' customer service personnel are knowledgeable of
contingency plan procedures, and (3) contingency plans have
been coordinated with the local airport authorities and FAA.
This provision also does not 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. The provision uses general terms such as ``food,''
``every reasonable effort,'' ``for an extended period of
time,'' or ``emergency.'' These terms should be clearly defined
to provide the passenger with a clear understanding of what to
expect.
We have found examples where Airlines have invested in air stairs
for deplaning passengers when an aircraft is delayed on the
ground but does not have access to a terminal gate; secured
additional food and beverage supplies for service at the
departure gates or on-board flights experiencing extended
delays; or made arrangements with medical consulting services
to resolve medical emergencies that occur on-board an aircraft.
Handle ``bumped'' passengers with fairness and consistency--
The requirement that the Airlines establish and disclose to the
customer policies and procedures regarding denied boardings has
been in effect for over 17 years. One critical element of
disclosure is the Airlines' check-in time requirements that
passengers must meet in order to avoid being ``bumped.'' This
is important because the last passenger to check in is
generally the first to be denied a seat.
We found several inconsistencies and ambiguities between the
check-in times identified in the Airlines' Plans, and those
identified on the Airlines' contracts of carriage, ticket
jackets, or other written instruments, such as the customer's
receipt and itinerary for electronic tickets. For example, in
its contract of carriage, one Airline requires passengers to
check in 10 minutes prior to the flight's scheduled departure,
but on the customer's receipt and itinerary for electronic
tickets, the check-in time states 20 minutes prior to the
flight's scheduled departure, making it unclear to passengers
which check-in time must be met in order to avoid losing their
seats and being ``bumped'' from the flight without
compensation.
Be more responsive to customer complaints--The provision
requires the Airlines to respond to complaints within 60 days;
it does not require resolution of the complaint within the 60-
day period, nor that when resolved, the disposition will be
satisfactory to the customer. Our testing of this provision
found the Airlines were responding to written complaints in
accordance with their internal policies, generally less than 60
days. In addition, the replies we reviewed were responsive to
the customer complaint and not merely an acknowledgement that
the complaint had been received.
Airline Performance Measurement Systems and Non-Airline-Employee
Training Are Needed
A key to the success of the Plans is the need for each Airline to
have a credible tracking system for compliance with its Plan,
buttressed by performance goals and measures. The Airlines also need to
train non-Airline employees on customer service issues contained in the
Plans, since these individuals are often mistaken for Airline
employees.
The Airlines need to have performance measurement systems in place
to ensure the success of the Commitment and Plans. Therefore, the
success of the Customer Service Plans is dependent upon each Airline
having a tracking system for compliance with each provision and the
implementing Plan. We found that most of the Airlines originally did
not have such a system in place, but we received assurances that the
needed systems would be established. In our work between now and
December, we intend to determine whether the Airlines have followed
through on their assurances and these performance measurement systems
are in place. The expectation, for example, is that each Airline will
have in place a tracking system to ensure the lowest eligible fare is
offered, that misrouted and delayed baggage is returned within 24
hours, that refunds are paid within the requisite timeframe, and that
communication systems for advising passengers of flight status are
working properly, and generating reliable and timely information.
Another area the Airlines need to address to improve customer
service is the training of non-Airline employees who interact with
customers at the airport such as skycaps, security screeners or
wheelchair providers. The Airlines must ensure non-Airline employees
who interact with their passengers are adequately trained on the
Airlines' Plans, policies and procedures for customer service.
When these personnel perform customer service functions covered
directly by the Airlines' Commitment, the public cannot reasonably be
expected to differentiate between those who work for the Airlines and
those who do not. Therefore, it is critical to the success of the
Commitment and Plans for these personnel to be properly trained.
However, 5 of the 14 Airlines told us they did not intend to train non-
airline personnel on their Plans' procedures. This is unfortunate. For
example, it is critical that the Airlines ensure that non-Airline
personnel performing passenger security screening service on behalf of
the Airlines understand the Airlines' policies and procedures in their
Plans for accommodating persons with disabilities.
The Terms in the Airlines' Contracts of Carriage Can Be More
Restrictive Than the Terms in Their Plans
The Commitment and the Airlines' Plans, while conveying promises of
customer service standards, do not necessarily translate into legally
enforceable passenger rights. Rather, each air carrier has an
underlying contract of carriage which, under Federal regulations,
provides the terms and conditions of passenger rights and air carrier
liabilities. The contract of carriage is legally binding between the
air carrier and the passenger.
Because of their clear enforceability, the Airlines' contracts of
carriage have become an important issue in the customer service debate.
Our results indicate that, in general, the Airlines have not modified
their contracts of carriage to reflect all items in their Plans.
Although 1 Airline incorporated its Plan in its entirety into the
contract of carriage, 3 Airlines (as of April 20, 2000) have not
changed their contracts of carriage at all since they agreed to the
Commitment, and the remaining 10 Airlines have changed their contracts
of carriage to some extent. This means, for example, that the
provisions for returning misrouted baggage within 24 hours and holding
a reservation for 24 hours without payment are not in some contracts of
carriage.
At present, it remains uncertain whether an Airline's Plan is
binding and enforceable on the Airline. In fact, one Airline, in its
Plan, has stated that the Plan does not create contractual or legal
rights. To resolve this question, the Airlines could incorporate their
Plans in their contracts of carriage. However, based on our results
thus far, we are concerned that, without direction to the contrary,
this would leave open the possibility that the contracts of carriage
may be more restrictive to the consumer than envisioned in the
Commitment or the Plans.
In some cases, we found the modifications made to the contracts of
carriage included restrictions not found in the Commitment or the
Plans. For example:
One Airline, in its Plan, states that it would accommodate
passengers required to stay overnight for delays and
cancellations caused by the Airline's operations. However, in
its contract of carriage the terms are more limited--the
Airline provides accommodations if the passenger is diverted to
another airport and put in an overnight status at the other
airport.
One Airline, in modifying its contract of carriage to
implement the provision to hold a reservation without payment
for 24 hours, limited the benefit to passengers calling from
the United States for travel within the United States. However,
the Commitment does not make this distinction.
Customer service is likely to become more of a competitive market
force as air carriers strengthen and implement plans to provide better
service. Over time, where there is competition in the air markets
served, measures to improve customer service should serve as a catalyst
for other Airlines to introduce initiatives to improve their customer
service in order to remain competitive. However, inclusion of the
Plans' provisions in the Airlines' contracts of carriage will become
more important if an environment develops where there is less
competitive pressure to maintain or improve customer service.
Implications for DOT's Capacity to Oversee and Enforce Air Carrier
Customers' Rights
DOT is congressionally mandated to oversee and enforce air travel
consumer protection requirements, some of which are covered by the
Commitments, and the Airlines' Plans and contracts of carriage. These
include compensation rules for bumped passengers, rules governing the
accommodation of disabled air travelers, ticket refund provisions, and
baggage liability requirements. The Office of the Assistant General
Counsel for Aviation Enforcement and Proceedings, including its
Aviation Consumer Protection Division, carries out this mission. This
office is also responsible for enforcing other aviation economic
requirements, such as legal issues that arise regarding air carrier
fitness determinations and competition.
DOT, in preparing and justifying budget requests for this office,
and Congress, in reviewing those requests, should look closely at this
office's capacity to fulfill its mission and be responsive in a timely
way to consumer complaints. In 1985, this office had a staff of 40; in
1995, it was down to 20; and by 2000, it had a staff of 17 to oversee
and enforce aviation consumer protection rules as well as carry out its
other responsibilities.
In fact, staffing has declined during a period of air traffic
growth, complaints have increased from 7,665 in 1997 to 20,495 \2\ in
1999, additional requirements have been established (such as the Air
Carrier Access Act and the Aviation Disaster Family Assistance Act),
and recently, the Commitment emerged as an important element in
protecting passenger rights. An issue that office will face soon is
whether policies contained in the Commitment and the Airlines'
implementing plans are enforceable if they are not also contained in
the Airlines' contracts of carriage.
---------------------------------------------------------------------------
\2\ Total aviation consumer complaints filed with DOT for the
entire industry (U.S. airlines, foreign airlines, tour operators,
etc.).
---------------------------------------------------------------------------
We believe there is cause for concern whether the oversight and
enforcement expectations for the Office of Aviation Enforcement and
Proceedings significantly exceed the office's capacity to handle the
workload in a responsive manner.
Mr. Chairman, this concludes my statement. I would be happy to
answer any questions you might have.
The Chairman. Thank you, Mr. Mead.
Mr. Carty, welcome.
STATEMENT OF DONALD J. CARTY, CHAIRMAN, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER, AMERICAN AIRLINES, AND CHAIRMAN, EXECUTIVE
COMMITTEE, AIR TRANSPORT ASSOCIATION OF AMERICA, ACCOMPANIED
BY: MARY JOPPLIN, SENIOR DIRECTOR FOR CUSTOMER SERVICE,
CONTINENTAL AIRLINES; VICKI ESCARRA, EXECUTIVE VICE PRESIDENT
FOR CUSTOMER SERVICE, DELTA AIR LINES; AND MARK DUPONT,
MANAGING DIRECTOR OF CUSTOMER SERVICES, AMERICAN AIRLINES
Mr. Carty. Mr. Chairman and members of the Committee: My
name is Don Carty. I am the CEO of American Airlines and I
appear today not only in that capacity, but in my capacity as
Chairman of the Executive Committee of the Air Transport
Association.
I am here today as much to listen as to speak. I have
obviously not had a chance to review in detail the interim
report of the Inspector General. Therefore I cannot comment on
the specifics in it. But I consider it my responsibility to
listen to your comments and concerns and certainly convey them
promptly and accurately to my colleagues. While I intend to be
a conduit for your comments and concerns to the industry as a
whole, I would like to give you a sense of at least what we at
American have done to respond to your call for more
responsiveness to customer needs.
It is no secret that virtually no one in the business
community likes government telling them what to do. When
Congress debated a passenger bill of rights last year, I think
all of you know we resisted. That debate did, however, cause
the ATA carriers to refocus sharply on and address customer
satisfaction much more quickly than we might otherwise have
done.
While I still firmly believe that you made the right
decision in not enacting rigid legislative standards, I have to
say that the actions of this Committee and others were very
beneficial in focusing the industry on customer issues. I think
it is fair to say that you forced us, all of us, to recommit
ourselves to improving customer service. In direct response to
your initiative, we have and we still have people from
different departments literally across our companies asking how
we can treat our customers better.
We have cut across functional lines and have taken a
comprehensive look at the whole question of customer service. I
think it is fair to say that when we did we found areas that
needed improvement, such as communications and training. Most
importantly, we started talking with each other about
developing common objectives that were focused on the customer.
Now, I realize that many of you are not satisfied with the
results so far. You might be surprised to learn that neither am
I. Despite an enormous effort, we are still not getting all the
results that either you or we had hoped for. But I firmly
believe that we have made very significant strides in the
industry in the right direction and that, in fact, the pendulum
on customer service is swinging back in the right direction and
there is an intensification of competition around customer
service.
Some of the criticism directed toward the airline industry
assumes that we are cavalier in our attitude toward our
customers. I can assure you nothing could be further from the
truth. We want nothing more than for every single customer to
have a safe and comfortable experience on our airline.
But in today's operating environment, as a number of you
have mentioned, that is a monumental task. The airline industry
today transports over two million passengers each and every
day. The vast majority of these people do get where they want
to go, when they want to go, and at a price that they are
willing to pay. We transport all these people with a safety
record that really is second to none in inter-city travel. This
summer the industry's passenger loads are breaking all records.
In fact, on Friday we will certainly have at American the
busiest day in the history of our company.
Now, as much as we try, we will never be able to satisfy
all of these customers all of the time. But we can certainly do
better than we have and we can certainly do better than we are
doing today. Again, I genuinely believe, and I do believe this,
that we are making progress, and we are making this progress in
a very challenging and demanding environment.
The record number of travelers this summer, while certainly
good news, is making a task of providing better service for
every passenger even harder. That is because when high load
factors exist and when something goes wrong there are more
people who miss connections, more bags to transfer, fewer seats
on other flights to carry people who missed planes, and fewer
facilities at airports to feed and house stranded passengers.
Transporting this record number of people has been made
even more challenging by early summer weather patterns that
have caused very substantial delays throughout the system,
delays which I am sure many of you have experienced.
Indeed, as Ken commented, delays are the source of the vast
majority of consumer complaints. And while some of the delays
are certainly within our ability to manage and we should manage
them better, such as maintenance, most really are, in fact by
far the majority are, the result of weather or air traffic
control problems.
The Nation's air traffic control systems and practices have
simply not kept pace for the growing demand for air travel, and
there is no greater cause of delays. Now, I know this is not
news to this Committee. No committee in Congress has been more
involved for a longer period of time in looking at air traffic
control problems than this one in particular. Mr. Chairman,
your early commitment to ATC reform has moved the issue forward
faster than anything anyone else has been able to do.
But I think it is fair to say we are only beginning to
identify the long-term fixes to the problem. We have a long,
long way to go and until we get there, customer service is
unfortunately going to suffer. I have to say to you personally,
I am not terribly optimistic about dramatic improvement on that
front in the next several years.
Now, some argue that delays are the result of the airlines
overscheduling. With load factors in the 80's and the 90's on a
continual basis, I think it is fair to say we cannot be accused
of flying empty planes through scarce air space. Rather, we are
responding to a stronger demand for air service than we have
ever seen before in the history of our country. And I am sure
that passengers who cannot find seats to destinations they
desire do not think that we have too many flights.
So what have we at American done about all of this? Taking
off my ATA hat for a minute and putting on my American hat, I
am very proud of our response to your concerns, particularly in
the areas that go above and beyond the voluntary plans. Let me
share just a couple.
There is no more customer-friendly act than to provide
medical service that saves lives. We were the first carrier to
place defibrillators on all our planes and as a result there
are people literally alive today who were brought back to life
on our airplanes. We have now supplemented this by adding
state-of-the-art medical kits to all of our planes as well.
As a response to our customer surveys and to your criticism
of the flying experience, we identified the single greatest,
one of the single greatest complaints, crowded flying
conditions, and as a result, as all of you I think know, we
decided to remove two rows of seats from the coach section of
each of our planes, returning the coach seating to the way it
was before deregulation.
In fact, a number of you were there the day we launched
this plan, and we have now reconfigured over 500 of our
aircraft and will complete the conversion of the fleet by the
end of the year. We certainly hope that passengers will choose
American as a result of this vastly superior product.
I am really very proud of the customer service improvement
made by our people and I thank you for the opportunity to
shamelessly promote it in front of you today.
We have also added newly designed seats in most of our
planes that are far more comfortable than the old ones and are
the best in the industry. This program has cost us $400
million.
In an effort to reduce delays at O'Hare, American Eagle has
voluntarily agreed to use lower flying altitudes for some of
its O'Hare flights. That, quite simply, frees up air space at
higher altitudes. Although this increases Eagle's costs because
flying at lower altitudes uses more fuel. However, we made the
decision in order to help all carriers at O'Hare to reduce
delays and improve customer service.
We have committed billions of dollars to refurbishing our
terminals in numerous airports, including Miami, JFK, Los
Angeles, and Boston, to make the traveling experience better
for our passengers. We have made available additional food and
water on all our flights for passengers to eat and drink during
long delays. In fact, since the beginning of this program we
have, unfortunately, distributed approximately 500,000 packages
during extended delays.
By July we will have deployed mobile check-in stations at
more than 65 airports, which will allow passengers to check
bags and get boarding passes without having to go to the ticket
counter. We are using voice recognition technology to handle
telephone inquiries regarding gate assignments and flight
status, which gives passengers a new option for obtaining
information and frees up our agents to handle calls needing
special attention more quickly.
But perhaps most importantly, we have spent countless hours
talking to our employees about these issues and providing them
with the training on how to deal with difficult situations. Our
agents and our flight crews are literally on the front line
each and every day and their jobs are incredibly stressful and
incredibly challenging, and they get even more difficult when
we see the delays that we have experienced.
We really have made every effort we can to support them in
their desire, and they really do want this, to provide our
customers with the best possible information at all times. I
think we are doing a much better job telling our customers
about delays, schedule changes, and other problems when they
occur. I know that we are far from perfect in that regard thus
far. Yet I think we are working very hard to provide consistent
and accurate flow of information.
Part of what I have said in the last few minutes has been a
bit of a plug for American Airlines, but I would be remiss if I
did not say these kinds of efforts in one form or another are
going on at virtually every airline in the industry. Because we
engage with them competitively, when one of our competitors is
offering something that we are not yet offering and we respond
to that, just as many of our competitors are responding to us.
I am going to suggest that Vicki Escarra of Delta spend
just a couple of minutes talking about some of the technology
Delta is using to help provide customers with better
information. Again, Delta is not exclusive in this effort. A
number of airlines in the industry are spending an enormous
amount of money in identifying new technologies as a way to
communicate better with our passengers.
So let me say again, I am certainly here to answer
questions and, most importantly, to listen very carefully, as I
did in your opening comments to everything you have to say to
us, and I certainly intend to convey your comments and your
concerns to all my colleagues, not only at American but in the
entire industry.
Vicki.
[The prepared statement of Mr. Carty follows:]
Prepared Statement of Donald J. Carty, Chairman, President, and Chief
Executive Officer, American Airlines, and Chairman, Executive
Committee, Air Transport Association of America
Mr. Chairman and Members of the Committee, my name is Don Carty. I
am Chairman of the Board, President and Chief Executive Officer of
American Airlines. I appear today in my capacity as Chairman of the
Executive Committee of the Air Transport Association. ATA represents
the major U.S. passenger and cargo air carriers. Our members transport
approximately 95% of the passengers and goods transported by air on
U.S. flag carriers.
I am here today as much to listen as to speak. I have obviously not
had a chance to see the interim report of the Inspector General.
Therefore, I cannot comment on any specifics in it. But I consider it
my responsibility to listen to your comments and concerns, and then
convey them promptly and accurately to my colleagues. The Members of
this Committee have strong views, but you have also been willing to
work with us to develop our various plans. For that we are most
appreciative.
While I intend to be a conduit for your comments and concerns to
the industry as a whole, I would like to give you a sense of how we at
American have responded to your call for more responsiveness to
customer needs.
It is no secret that virtually no one in the business community
likes government telling them what to do. When Congress debated a
``passenger bill of rights'' last year, we resisted. That debate did,
however, cause the ATA carriers to focus on and address customer
satisfaction issues more quickly than we would have otherwise. While I
still firmly believe that you made the right decision in not enacting
rigid legislative standards, I have to say that the actions of this
Committee and other were very beneficial in focusing the industry on
customer issues.
You forced us to recommit ourselves to improving customer service.
In direct response to your initiative, we had, and still have, people
from different departments across our companies asking how we can treat
our customers better. We have cut across functional lines and have
taken a comprehensive look at customer service.
This was not a trivial task. Thousands of individuals put down
pressing work to focus on the problem. We looked at other businesses to
help us in developing better practices. And more and more we started
looking at our business from the customer's point of view. When we did,
we found areas that needed improvement, such as communications and
training. Most important, we started talking to each other to develop
common objectives that were focused on the customer.
I realize that many of you are not satisfied with the results so
far. You might be surprised to learn that neither am I. Despite an
enormous effort, we are still not getting all the results that either
you or we had hoped for. But I firmly believe that we have made very
significant strides in the right direction and that, in fact, the
pendulum in customer service is swinging back in the right direction.
Some of the criticism directed towards the airline industry assumes
that we are cavalier in our attitude toward customers. Trust me, we
want nothing more than for every single customer to have a safe and
comfortable experience on our airline. In today's operating
environment, that is a monumental task.
The airline industry transports over 2 million people each and
every day. The vast majority of those people get to where they want to
go, when they want to go, at a price they are willing to pay. We
transport all these people with a safety record second to none in
intercity travel. This summer the industry's passenger loads are
breaking all records. On Friday, we expect to have the busiest day in
our history.
As much as we try, we will never be able to satisfy all of these
customers all the time. But we can certainly do better than we are
today and, again, I genuinely believe we are making great progress, and
we are making this progress in a very challenging and demanding
environment. The record number of travelers this summer, while
certainly good news, is making the task of providing better service for
every passenger even harder. This is because with high load factors,
when something goes wrong, there are more people who miss connections,
more bags to transfer, fewer seats on other flights to carry people who
missed planes, and fewer facilities at airports to feed and house
stranded passengers. Transporting this record number of people has been
made even more challenging by early summer weather patterns that have
often caused substantial delays throughout the system.
Indeed, delays are the source of the vast majority of consumer
complaints. While some of the delays are within our ability to manage,
such as maintenance, most are a result of weather or air traffic
control problems. The nation's air traffic control systems and
practices have not kept pace with the growing demand for air travel,
and there is no greater cause of delays. I know that this is not news
to this Committee. No Committee in Congress has been more involved for
a longer period of time in looking at air traffic control problems than
this one. In particular, Mr. Chairman, your early commitment to ATC
reform has moved the issue forward faster than any one else has been
able to do. But we are only beginning to identify the long-term fixes
to the problem. We have a long, long way to go, and until we get there,
customer service will unfortunately suffer.
Some argue that delays are a result of the airlines
``overscheduling.'' With load factors in the 80's and 90's on a
continual basis, we can hardly be accused of flying empty planes
through scarce air space. Rather, we are responding to a stronger
demand for air service than we have ever seen before. I am sure that
passengers who cannot find seats to the destinations they desire don't
think we have too many flights.
So what have we at American done about all this? Taking off my ATA
hat and putting on my American hat, I am very proud of our response to
your concerns, particularly in areas that go above and beyond the
voluntary plans. Let me share a few:
There is no more customer friendly act than to provide
medical services that save lives. We were the first carrier to
place defibrillators on all of our planes. As a result, there
are people alive today who were brought back to life on our
planes. We supplemented this by adding state-of-the-art medical
kits to all of our planes as well.
As a response to our customer surveys and to your criticisms
of the flying experience, we identified one of the single
greatest complaints--crowded flying conditions. As a result, we
decided to remove two rows of seats from the coach section of
each of our planes, returning the coach seating to the way it
was before deregulation. A number of you were there the day we
launched this plan. We have now reconfigured over 500 of our
aircraft and will complete conversion of the fleet by the end
of the year. We hope that passengers will choose American over
our competitors as a result of this vastly superior product. I
am immensely proud of this customer improvement and thank you
for the opportunity to shamelessly promote it today.
We have added newly designed seats in most of our planes
that are far more comfortable than the old ones and are the
best in the industry. This program has cost us $400 million.
We have committed billions of dollars to refurbishing our
terminals in numerous airports, including MIA, JFK, LAX and
BOS, to make the traveling experience better for our
passengers.
We have made available additional food and water on all of
our flights for passengers to eat and drink during long delays.
Since the beginning of this program, we have distributed
approximately 500,000 packages during extended delays.
By July, we will have deployed mobile check-in stations at
more than 65 airports which will allow passengers to check bags
and get boarding passes without having to go to the ticket
counter.
We are using voice recognition technology to handle
telephone inquiries regarding gate assignments and flight
status, which gives passengers a new option for obtaining
information and frees up our agents to handle calls needing
special attention more quickly.
Most important, we have spent countless hours talking to our
employees about these issues and providing them with training on how to
deal with difficult situations. Our agents and flight crews are on the
front line each and every day. Their jobs are both stressful and
challenging. We have made every effort we can to support them in their
desire to provide our customers with the best possible information at
all times. I believe that we are doing a much better job telling our
customers about delays, schedule changes, and other problems when they
occur. I know we are far from perfect, but we are working very hard to
provide a consistent and accurate flow of information.
So let me say again, I am here to answer any questions and, most
importantly, to listen carefully to you and to convey your comments and
concerns to my colleagues at American and the ATA.
The Chairman. Thank you, Mr. Carty. Since you agreed to be
the one to appear before the Committee, you certainly deserve
the luxury of a couple of commercials for your airline.
Mr. Carty. Thank you, Senator.
The Chairman. Ms. Escarra.
Ms. Escarra. Well, again good morning, Mr. Chairman,
Senators, and thank you for an opportunity of being with you
and to as well listen to your concerns, which are certainly our
concerns.
Just a brief mention, if I may, about the technology that
is in the room. I am sure many of you are wondering what this
is. For Delta, this is a significant way to address many issues
around notifying customers of known delays, cancellations, and
diversions. It as well will provide to our consumers and to our
employees accurate and reliable information. It will address
the issues that Ken talked about with regard to content, which
are certainly concerning to us.
If we know that there is a crew problem, a maintenance
problem, a weather problem, this system will help us. Simply
put, if you look at the back of the room, the first screen that
you will see is called a Flight Status Monitor System. It is
what our operations control center uses to actually enter
information, retrieve information from our pilots or our system
or the FAA about known delays and cancellations. It as well
helps us monitor gate changes and so forth.
Moving around the room, the second screen that you will see
is technology at our gates which allow our gate agents to
manage customers in a different and better way. The last two
screens that you see are actually customer information display
screens and they do a number of things for us. But the real
power of this system is that at Delta over the last year and a
half we have been merging our systems and our data bases
together so that with a simple push of one keystroke in our
operations control center around a cancellation or delay our
consumers know about that within a matter of a few seconds.
The Chairman. How many airports do you have this
information right there, those displays?
Ms. Escarra. The gate information currently is at 28 of our
airports. We will be moving it into 56 additional airports by
the end of this calendar year.
Senator Kerry. Just in the airport?
Ms. Escarra. Just in the airport. The customer information
display screens are in the airports and we are launching them
in the major cities that we serve today, as well as in our
crown room clubs.
Senator Kerry. Could they be accessed by Internet by
somebody?
Ms. Escarra. Yes, they can, and that as well, Senator
Kerry, is really the power behind this system. As we move into
the next decade, all of our technology will have Internet
capability and access.
Thank you.
The Chairman. Thank you.
Anyone else?
[No response.]
The Chairman. Then I want to thank all of you for coming.
Mr. Mead, I thank you for a very important report. Give me
a guess or an estimate, an estimate I would prefer. Clearly the
delays are increasing. Clearly this system is becoming
overtaxed. Clearly there are therefore additional
inconveniences to the airline passenger.
A couple years ago we had a report that was given to
Congress and the American people by a very important blue
ribbon committee. I think you remember that report. You know
the one I am referring to. In that report what struck me is
they had a line that said: Unless something drastic changes as
far as the air traffic control system is concerned, every day
in a major airport in America will be like the day before
Thanksgiving. Do you remember that?
So my question to you is how much responsibility can we
place on the failure to modernize the air traffic control
system versus poor performance on the part of the airlines
themselves? And with an increase in flights--we see that all
along--how significantly will this failure of the air traffic
control system to absorb this dramatic increase in flights play
in our attempts to give the American people what they deserve,
which they are not getting today, in all due respect?
Can you ruminate a bit? I am trying to--rather than focus
on whether there is on-time baggage delivery and those kinds of
things, I think first we need more of a big picture here,
because I think that we need to look at the known factors--
increases in flights, increases in congestion of the system,
the failure of construction of airports to keep up with the
number of flights, failure of the air traffic control system to
modernize--and we can debate as to whose fault that is at
another time.
But crank in all those factors. You have been involved in
aviation issues now for many, many years. Please.
Mr. Mead. You know, it is not a de novo question. When you
are preparing for testimony like this, you think, well, what
can you offer the Committee in the way of a solution? This is a
tough cookie. I think the blaming of this substantially on air
traffic control is misplaced. I think air traffic control and
modernization do bear some of the responsibility. But if you
reflect on the airports and more and more aluminum tubes on the
airport, if a community is not prepared to significantly expand
the airport, put in more runways, what can air traffic control
reasonably be expected to do?
Weather. There are some weather patterns in this country--
for example, just 2 weeks ago there were thunderheads that
literally split the United States in half. It was like a wall.
There was not a way, as it has been explained to me, that you
could fly over it. A U-2 pilot perhaps could have, but not
commercial airliners. Expecting air traffic control to deal
with that type of situation I think is a bit unreasonable.
I think the airlines in their scheduling do anticipate that
they will have normal flying conditions. They do not anticipate
that there is going to be a terrible storm on a particular day.
You will have an aircraft that is flying to three or four
different locations throughout the day and it never makes it to
its second location. This has a domino effect throughout the
airline system that they are unable to compensate for because
in many cases they do not have a spare aircraft sitting around
at the destination.
That is why sometimes you will see a situation where the
weather at the destination and point of origin is just fine,
but the aircraft that is supposed to be used has been delayed
someplace because of weather.
I would not want to attach a percentage to it. I think
there are multiple factors. But I do believe the airlines bear
a good bit of responsibility. The FAA's initiatives, such as
Free Flight, which I know you are familiar with, they could be
expedited. They need to be expedited.
We should not underestimate the importance of the
availability of runways in this country. FAA cannot force a
community to expand an airport, nor can the airlines. The
statistic on that chart I put up that showed a 130 percent
increase in delays of more than 1 hour, those were delays after
the planes left the gate and before takeoff. That is not always
because of weather.
The Chairman. I do not like to ask questions related to
personal experiences particularly, but I have been flying the
shuttle to New York and-or Boston for many years now. Even on
good weather days, there are delays because of congestion
within the system, just that there is too many airplanes using
the Northeast Corridor. So does that not--that is probably the
most severe case of the overstress of the air traffic control
system.
Mr. Mead. When we went to deregulation, with the exception
of four airports, there were no slot controls. There were no
slot controls placed on them. Now we are lifting slot controls
at Chicago. I do not know where this country is headed in 5 or
10 years. If we continue to have the low fares and the demand,
we are going to have more and more planes and we are going to
have to face some means of allocating the space.
Some economists would suggest that it be congestion, or
peak-hour, pricing, but that would be translated to you, the
passenger, on the ticket price. If you wanted to get a cheap
fare, you would be unable to go from market A to market B at a
peak hour at what you would consider to be a cheap fare.
Mr. Carty. Senator, could I make a comment on that subject?
The Chairman. Sure. Sure, Mr. Carty. Bring the microphone a
little closer if you would.
Mr. Carty. I do not disagree with much of what Ken has
said. There are a number of infrastructure problems. But I
think we would be naive if we assumed that we are simply taxing
the air space dramatically. I think there are runways we are
also taxing, airports that we are taxing. But the air space is
being taxed.
There is a tremendous increase in demand for that air
space, not just by the gradual growth in our business, but by
the changing nature of it. Regional jets do not occupy the same
air space as turboprops do. They are up there with the big
airplanes. You have seen just a huge increase in the number of
regional jets flying in this country.
The Northeast quadrant which you identified is clearly
getting more and more clogged, and it backs up in the rest of
the country because many of the flights coming out of the rest
of the country are headed for the Northeast. So a Dallas to
Boston flight is just as badly affected as a New York to Boston
flight.
So we are really beginning to clog this up. I would
predict--and I am not a technical expert--that no matter what
the airlines do in the next year, no matter how good a job they
execute, the delay situation next summer will be as bad as it
is this summer.
We all try to avoid the anecdotes. Let me give you an
anecdote that happened to me last night. I was on a flight
coming out of Dallas leaving at 4 o'clock and I was sitting in
a line at 5:15 waiting to take off an hour and a quarter later
and the captain came on and said he expected, he was being
informed he would be able to take off at 5:30. I looked out the
window and it did not look like to me he was taking off at
5:30. I must say in his defense, he said: But I am not sure
about that. There were a lot of airplanes out there.
So I called our systems operation control. They said they
were being told 5:30 by the FAA, but they doubted it and they
had no information.
Now, there were a couple of comments made about the
airlines providing better information and we certainly should
when we have it. We have not done as good a job there as we
need to do and we need to get more focused, more information to
our people, more use of information systems, and more training.
But I called at 6, I called at 6:30, I called at quarter to 7,
and no one--I am the CEO of the company! If anybody at American
Airlines had known when that plane was taking off, they would
have told me, I can assure you, and by the fourth call they
certainly would have!
The plane took off at 7:20, 3 hours and 20 minutes late.
And there was weather in the Dallas region, there was weather
in the Washington region, but no one could understand how that
weather, even in our systems operation control, had backed up
the air traffic control system.
One further comment on weather. Ken is quite right, you
cannot fly through weather that cannot be flown through and
none of us want to. But once weather clears, if the
infrastructure has more capacity than it currently has you can
clear up the delays. They do not have to last all day and into
the next day to catch up. The problem is the system is at
capacity and we are going to be in deep trouble in this country
in terms of providing good service to our customers even if we
do a better job, and I can assure you, at least at American, we
will do a better job.
Mr. Mead. I had one thing, a postscript to add, that I
think is a very major improvement, or at least it has that
potential. Last year, at this time, we were experiencing all
these delays--you will probably recall the experiences of last
summer. At that point in time, FAA and the operations centers
of the airlines were not collaborating nearly as much as they
are today.
This last Friday, I was at Northwest Airline's operations
center in Minneapolis. There was a storm, thunderheads going
from the ground practically to 55,000 feet near Chicago. So
there was no way planes were going to be getting into or out of
Chicago once that storm hit. But I was seeing first-hand
something that the Northwest people told me had not happened 7
months before, and that was they were there discussing and
collaborating with Herndon air traffic control on the
scheduling and movement of their flights around the country.
In the past, they said, they would just get orders. Air
traffic control would say this is the way basically it is going
to be, and the airline did not have as much input. So I think
that is a non-technology-related initiative, but it is clearly
an improvement. They were telling me at Northwest that they
feel that they will be able to make better judgments on how
well this will work 6 months from now, because they are still
fairly new at it.
The Chairman. Mr. Carty, when you had that experience how
often did the pilot come up on the intercom and tell everybody
what was going on?
Mr. Carty. He did, he did a very good job. He was on every
15 or 20 minutes, and our flight manual tells him to be on
every 20 minutes.
The Chairman. I want to tell you, that is very rare. I fly
every weekend. That is rare. And I do not know whether it is
their military background or what it is, but very rarely do you
get the pilots coming up every 15 or 20 minutes to tell us what
is going on. And that--I cannot write that rule, we cannot
write that regulation. It would be foolish to do so. But pilots
do not do that routinely.
I have been in a plane as long as 2 hours without
information. So everybody starts harassing the flight attendant
for information. So again, we have a tendency to micromanage,
but I have the experience all the time. I am glad you were
given the ability to have that information shared with you. I
have been as long as 2 hours.
Mr. Carty. Senator, I agree with you we have not done as
good a job as we should have there by any means. I think it is
a mind set by the pilot, if he does not have anything to tell
you he does not tell you anything. But I agree with you it is
nice----
The Chairman. I would rather have him come up and say.
Mr. Carty.--to hear that he does not have anything to say.
The Chairman. I would rather have him come up and say, I do
not have anything to tell you.
Mr. Carty. And I think we are making progress. We are doing
some statistical measuring of that in delays and our pilots are
doing a better job. They are far from where they need to be. We
have now built it into our training and built it into our
flight manuals.
I notice there was an anecdote in USA Today or something
that the pilot on a USAirways flight was applauded when he
simply came on and said: We are going to be here for a while
and I do not have an idea how long. I wish I could tell you,
but I cannot. And he got applause just because somebody talked
to them. I could not agree more with you.
Ms. Escarra. Mr. Chairman, may I make a couple comments
about your question? That is, when we look at what the growth
is planned out to 2008, today we are carrying about between 635
and 650 million customers. We are planning on carrying or the
demand looks like it will be right at a billion customers at
the year 2008. So the issue around how we manage service for
airlines----
Senator Kerry. How many are you carrying today?
Ms. Escarra. The industry is carrying about 635 million
customers.
So when you look at--No. 1, I would say when you look at
deregulation, one of the greatest benefits of deregulation is
that more people are traveling today, certainly, than were
traveling in 1978 at lower fares, and we could talk about that.
But clearly, when we look at the demand based on what customers
are telling us they want to do, and that is fly more
frequently, it is not a one size fits all solution.
Airlines have got to do everything that we can to provide
good service in light of the fact that crows are inevitable. We
have got to do a better job of working through local
communities, State communities, on expanding runways. Atlanta
is a good example. It has taken us years to get a fifth runway
approved and now we are moving ahead.
But finally, I would say when we look at air traffic
control, and our team is involved twice a day in talking to the
Herndon center as far as FAA is concerned to discuss how we lay
out what we are planning on doing as far as weather and ATC
delays are concerned throughout the day. We are doing a better
job, I think, in teaming on communication. But we have got to
find a way of holding the FAA accountable and the air traffic
controllers accountable, as we should be held accountable, for
the production line of how we are actually running our system.
I know we are working on some ways of actually addressing
those kinds of issues. But the public is demanding that we
continue to fly greater schedules and that demand will only get
greater in the next 6 years.
The Chairman. Well, I will tell you one thing you can do
and that is man your gates better and your ticket counters
better. I have stood in lines of 100 people and not had the
attendant show up, and then that same attendant is the one who
has to open the gate for the pilot or do a lot of other
administrative duties while we stand and wait. That is wrong,
and clearly statistics indicate that staff employment has not
increased along with the increase in passengers.
Finally, Ken--and I apologize to my colleagues for taking
so long--your report indicates that passengers get bumped
according to the reverse order of check-in, or the last person
to check in is the first to be denied boarding. Is that always
the case?
Mr. Mead. No. We are finding some indications, not enough
for us to formally report on it yet, of people that are
frequent flyers, that may not be treated in the same fashion.
The Chairman. Mr. Carty.
Mr. Carty. Senator, I am not aware of any such treatment at
American. As I think you know, we always attempt to deal with
overbooking situations with voluntary means and it is only rare
occasions when we resort to involuntary. But involuntary
generally is handled, as best I know across our airlines
system, on the person that shows up late, last.
The Chairman. Well, do you agree that that should be the
rule?
Mr. Carty. I think it has got to be the rule. I think
airlines have to make an enormous effort to make this happen
voluntarily.
The Chairman. Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, I
think you are right to look at this in the big picture. I want
to look at another aspect of the big picture and that is
information and, specifically, the public's right to know,
because I think that is what this debate is really all about. I
want to focus on this question of the inability of passengers
to get good information about the lowest fare that is
available.
Now, as I was visiting with my friend from Montana, who
made some comments earlier on this issue, this is something
that is within the industry's control. This is not a matter of
thunderstorms or things of this nature. This is within the
industry's control.
My reading of the report indicates that if you get on the
telephone and you ask what is the lowest fare available, a
majority of the country's airlines will not tell it to you,
because very often that is available on the Internet or some
other kind of way. So I would like to start out by having you,
Mr. Mead, name the airlines by specific name that actually give
out, if a passenger calls up on the telephone, the lowest fare
that is out there.
Mr. Mead. I do not know that any of them give the lowest
fare that is out there over the phone. That is because there
are fares available over the Internet that are not available
over the phone. The point we are making in our report is that
when you call up on the telephone that the airline should give
you not only the lowest fare that is available over the phone,
but should affirmatively tell you that there may be lower fares
available through other distribution outlets.
Senator Wyden. Which airlines tell you that and which do
not?
Mr. Macey. Yes, sir. Delta Air Lines has on their telephone
reservation system, when you are put on hold, a recording that
makes announcements that there are lower fares available on
their Internet website. USAirways reservation agents also share
that information with the consumer.
Senator Wyden. So that is two. We have got 14 that signed
the pledge. My understanding is 6 of the 14. Who are the other
four, so we can know who the eight are that do not seem to tell
you?
Mr. Macey. Well, we know 6 of the 14 have modified their
contracts of carriage to include the commitment to offer the
lowest fare.
Senator Wyden. Who are they?
Mr. Macey. We have Delta, Hawaiian, Northwest, Southwest,
United, and USAirways.
Senator Wyden. So that leaves us with eight who either do
not make it legally enforceable to tell you the lowest fare or
you simply do not know what their practice is, is that not
correct?
Mr. Macey. Well, I also should point out, Senator, that in
their plans several of the airlines disclose that there are
other fares available through the Internet, through other
distribution systems, not just on their own Internet sites, but
other Internet sites. So the information is in a combination of
places. They will tell you over the telephone. They have it in
their plans.
Mr. Mead. The commitment--it is important to realize that
the commitment is that they will offer the lowest fare
available over the telephone. It does not go on, nor do the
airlines pledge to go on and say, gee, you might get a cheaper
fare on the Internet. Also, they did not pledge that their city
ticket offices would offer a lower fare, although six airlines
have gone beyond what was just committed to.
Senator Wyden. But the reason that this is so important is
that this illustrates that the consumer is still part of a
shell game, a kind of three-card monte with respect to fares.
The airlines did not even promise what is really in the
public's interest, which is to just get straight information on
the lowest fare available. Now we are finding many of them are
stonewalling even on what they said they would do, which was
pretty limited in the first place.
The reason I make this point is that this is not an air
traffic control matter. I happen to think that Chairman McCain
is right with respect to congestion and infrastructure and the
like. But on this lowest fare issue, which is so important to
consumers, they are not getting straight information. It is
within the control of the industry and the industry will not
give it to them.
I think you performed a great service by laying out exactly
what is going on with an issue that is within the industry's
control.
The second area I wanted to examine with you, Mr. Mead, is
this issue of the contracts of carriage. As you know, I feel
this is especially important. Mr. Carty, I think it is great
that you are putting in the extra leg room, but, frankly, I
would rather have seen you change this document that you all
put out in 1999 that basically said the contracts of carriage
are not going to be changed, because to me that is what really
protects the consumer.
What I would like to know, Mr. Mead, is of the 14 airlines
which ones have changed their contracts of carriage to reflect
that they would now put most of these voluntary commitments
into writing?
Mr. Mead. One airline, which I might as well say for the
record was Southwest Airline, incorporated the commitments as
well as the plans in the contract of carriage without
limitation. None of the other airlines went that far. Three
airlines did not change their contract of carriage at all in
response to the commitments.
That leaves ten who changed their contracts of carriage to
some extent at least to reflect the commitment. Now,
parenthetically I want to stress that the commitment itself is
not the entire portfolio that we are all interested in here.
Each airline has its plans. The plans get specific. For
example, let me take the commitment on notifying people of
delays and accommodating them when they are delayed or
canceled.
The commitment does not require an airline to accommodate
anybody overnight. It says you will disclose what your policies
are. It is the plan that says what specifically the airline
will do. Now, so that is why it is very important when we are
talking about these commitments and plans that we specify what
exactly we are speaking of. The plans in many cases have a more
liberal provision in them on, for example, accommodating people
overnight than do the contracts of carriage. A very important
distinction.
Senator Wyden. And it is especially important because after
December, when your work may be done, and if we do not have a
chairman who is interested in these issues, the question is
going to be what the consumer has in these contracts of
carriage. Again, this is an issue, Mr. Carty, that is in the
industry's control. This is not subject to thunderstorms and
other problems. This is something that you all can change.
I will tell you, until I see some changes in this area I
will continue to believe that these consumer protections are
really not substantive.
A question for you, Mr. Carty, and that is on this on-time
departure matter. I think you heard Mr. Mead describe you get
out of the gate 14 and a half minutes, so you are within the
15-minute rule, but you sit on the runway for 5 hours. Do you
think the rule ought to be changed so that that is not
considered an on-time departure?
Mr. Carty. Senator, I think the focus on on-time
dependability that you see in the DOT and certainly the public
reporting airlines do, is not on on-time departures, but on on-
time arrivals. Obviously, if you sit on the runway for 2 and a
half hours you are not going to have an on-time arrival. So I
do not think there is any need to change that definition,
because the focus is on promising the customer an arrival time
and reporting against that, and that measure has become much
more important to the DOT and consumers than the departure
question.
Airlines try to get off the gate quickly even in adverse
conditions because they know the sooner they get off the gate
the sooner they are going to be in that line and the sooner
they are going to be able to be taking off. So I do not think
that reporting issue is a big problem.
Senator Wyden. One last question if I could on this round,
Mr. Chairman. Mr. Mead, AIR 21, the legislation in this area,
increased the penalties for violating airline passenger
consumer protection rules. Can you report how often that
increased penalty has been imposed?
Mr. Mead. I do not know if it has been. The point I tried
to make in the statement was that there is some concern, I
know, about the adequacy of the penalty. The deeper concern we
have is whether they are going to get enforcement at all
because of the number of staff in that office and the load that
they are facing.
Senator Wyden. My time is up, Mr. Chairman, and I will just
wrap up by saying I am very sympathetic to what you and Senator
Rockefeller, Senator Gorton, Senator Burns and others are
saying with respect to the complexity of the system and the
congestion. But each one of these areas that I focused on this
morning is solely within the industry's control. I think that
is why we need passenger rights legislation and I continue to
want to work with you and our colleagues on a bipartisan basis
to get it done.
Thank you.
The Chairman. Thank you.
Senator Burns.
Senator Burns. Ms. Jopplin, you are a gate agent where?
Ms. Jopplin. I have been in the industry 23 years. I used
to be a gate agent about 8 years ago. Now I am Director of
Customer Service. I was also a reservationist and I was also a
ticket counter agent.
Senator Burns. Whereabouts, though?
Ms. Jopplin. In Houston, Texas, at Continental.
Senator Burns. Houston. I remember Continental a long time
ago, but anyway.
Ms. Jopplin. I do too, Senator Burns.
Senator Burns. We were still flying DC-3's, so that is how
far I go back.
[The prepared statement of Ms. Jopplin follows:]
Prepared Statement of Mary Jopplin, Senior Director for Customer
Service, Continental Airlines
Good Morning, my name is Mary Jopplin and I am the Director of
Customer Service at Continental Airlines. For the last year, I have
been the lead coordinator for system-wide implementation of the
voluntary customer service plan for Continental Airlines, the nation's
fifth largest airline with hubs in Houston, Newark and Cleveland.
Continental Airlines, more than most, understands that good
customer service is key to long term success in the airline industry.
Just seven years ago, we emerged from our second bankruptcy. We were
last in DOT metrics on every level. We failed miserably at efforts to
get passengers to their destination on time; our mishandled bag ratio
was unacceptable and many of our customers were understandably
motivated to write the Department of Transportation. We knew that in
order to attract both business and leisure travelers back to our
airplanes, we needed to distinguish ourselves.
Frankly, what all of the airlines do day in and day out is
basically the same task: we hand out boarding passes to passengers; we
take a long metal tube with seats and load passengers into that tube;
we load bags and cargo in the belly of that tube; we wait for the FAA
to tell our pilot when to takeoff, where to fly while enroute to their
destination and when/how to land. Since we are all supplying basically
the same ``event", we have to distinguish ourselves in some way and
frankly, while you can build a more beautiful airport or gate, the way
we all try to distinguish ourselves is by providing better customer
service.
In the last seven years, Continental Airlines has reworked how we
provide customer service. And we have been recognized for our efforts.
Just within the last year we have won the J.D. Power award for
providing the best long and short haul service; Best U.S. Airline for
Business Travel from Smart Money Magazine in 2000; Best Airline in the
U.S. from Fortune Magazine in 1999; Best Airline Website from Forrester
PowerRankings in 1999; and Best Elite Program and Best Customer Service
as part of the Freddie Awards from Inside Flyer in 1999.
But with all that Continental had accomplished in the area of
customer service prior to last June, we recognized that our passengers
and the Congress were sending us a wake-up call with their debate about
passengers' rights. The Congress motivated us to recommit ourselves to
improving our levels of customer service by working with us to develop
the voluntary Plans.
At Continental, we have taken the implementation of our voluntary
customer service plan (known as Customer First) very seriously. While
we were already doing several of the ``initiatives'' prior to the
publishing of the voluntary plans, there were a number of things we
were not doing at all or we were not doing with consistency. Here are
just a few examples of what has changed at Continental as a result of
Customer First:
While Continental had a policy of providing the lowest
available fare, as a result of our Customer First commitments,
we developed and installed new software that ensures that
reservations agents will always offer the lowest fare available
to our customers.
And, while we would hold a reservation for 24 hours if
asked, our policy did not allow a passenger to hold a low fare
reservation past its applicable date (e.g. a 14 day fare would
not be held to the 13th day--even if you reserved at 11 p.m.,
14 days before departure, you had just one hour to make up your
mind). Now we honor the low fare for 24 hours past the time of
reservation no matter when that reservation is made.
Our baggage liability limit has been increased to $2500 from
$1250.
We have implemented a system-wide policy that pilots and
gate agents should issue updates every 20 minutes to keep
passengers informed about delays or cancellations. Our previous
policy was to keep passengers at the airport or onboard
aircraft informed as to delays, etc., but, we didn't have a
good program to get the best information to the gate, we didn't
stress the importance of providing the information and we
didn't have a way to measure performance. Not surprisingly, we
didn't have good compliance.
While we have received numerous awards for the quality of
our frequent flyer program, prior to the implementation of
Customer First, we did not post the number of frequent flyer
redemptions annually on our website and in our newsletters. Now
we publish our annual and monthly redemptions each month on our
website.
We now have the capability to provide a customer who asks
with the width/pitch for each of our aircraft types seats.
Prior to implementation of Customer First, this information was
not readily accessible to customer service and reservations
agents.
We now require that our domestic codeshare partners provide
comparable consumer plans and policies, a step we did not apply
with consistency prior to the implementation of Customer First.
Because of Customer First we developed coordinated internal
policies and procedures to ensure that all appropriate actions
are taken to provide food, water, restroom facilities and
access to medical treatment for passengers onboard aircraft for
more than 2 hours. We negotiated with vendors and other
catering services that business hours be extended as well as
for the delivery of supplies--we even added diapers and baby
food to our on-hand supplies at airport locations.
We developed a plan in coordination with airport operations
and FAA which provides for the safe movement of customers from
an airplane to the airport terminal including consideration of
aircraft parking locations, walkways and routes, ramp escorts
and secure entrances to the airport terminal in the event that
an airplane which needs to return to the terminal is unable to
pull up to a gate.
Clearly, the Congressional debate about the quality of customer
service delivered by the U.S. airlines in recent years has forced all
of us to put the spotlight on this issue within our own companies. And
as each of the airlines has intensified our internal review of customer
service, this has had a positive effect on our passengers because the
airlines have basically been trying to ``outdo'' each other on a
multitude of customer service fronts. Consider what we have seen
implemented by various airlines in just the last few months:
Several airlines have put additional leg room into part of
their cabin.
Several airlines have put bigger bins for carry-on baggage
on their aircraft.
At least one airline is now providing compensation in the
event that a bag is mishandled.
Airlines have set up new systems (like mobile lounges, hot
lines, or service recovery centers) to reaccommodate,
passengers in the event of a cancellation or bad weather, etc.
At least one airline has developed and installed new screens
at the gates to provide up to date information for passengers
on delays.
In short, competition to have the best customer service is intense
and that is a real victory for the consumer!
Over the last eighteen months, much public attention has been
focussed on what goes wrong in the airline system but it is important
to put the quality of airline service in perspective. Here are just a
few statistics about customer service industry-wide since the voluntary
programs were developed:
From January through March of 2000, approximately 133
million passengers traveled in the United States on major
airlines.
These 133 million passengers traveled on 1,380,000 flights,
the vast majority of which arrived within fifteen minutes of
the scheduled arrival times.
Only one half of one percent of these passengers' bags was
mishandled.
Less than three one thousands of one percent of the
passengers complained to the Department of Transportation
(4,011 people) in this time period.
And, for the record, at Continental, where we have toll free
fax and phone lines for complaints, and postage-paid postcards
in our on-board magazines, complaints versus enplanement are
down over 10% for the first three months of this year compared
with the same period last year.
In short, in so many ways air travel is actually working well. But
is it working perfectly? No. When you think about the monumental task
of transporting all those people and their bags on all those planes
every day and then add in the impact of thunderstorms, rain, fog, snow,
maintenance issues, and runway construction, the result is delays. Some
would blame the FAA for most of the delays but the fact is that they
are doing their very best to keep up by managing our aging and
overburdened air traffic control system with inadequate resources and
equipment. Truthfully, no matter what the cause of a delay is, it has a
dramatic impact on our passengers, our employees, our crew time, our
baggage delivery, our fuel supply, etc.
The bottom line message for this Committee and for the traveling
public is that we, the industry, are not done doing everything we want
and should do for our customers. Good customer service is a day in and
day out project. Every day we want to do it better than the last. Every
day new technology comes along that enables us to improve the
passengers' experience. Every day we have to train our people and yet,
everyday we will make some mistakes--it's human nature. We know that
some days we don't do as well as we should. But, we get up the next day
and do it all over again and try to do it better.
In short, Customer First is not ``done''--it is and always will be
a work in progress. But I am here today to tell you that this industry
and certainly this airline and its 50,000 employees, has been listening
to you in Congress and to our customers. We are committed to doing the
best we can today and we are committed to work harder to do it even
better tomorrow and beyond.
Thank you for the opportunity to appear before you today.
Senator Burns. I want to--this on-time thing, you hit on
it, Mr. Carty, when you responded to Mr. Wyden's question. I
think on-time arrival is probably a more--gives us a better
picture of what is going on out there than on-time departure.
In other words, I can see a little better leeway there as far
as on-time arrival is concerned, because with this situation
here it does not paint a real accurate picture of what we can
engage things in.
Also, on bags, Mr. Mead, I was surprised you say now on
lost bags 24 hours should start when it is reported. I come
from a different view of that. I say you have got to find it
first. You know, we do not know where it is. And then maybe the
clock starts running to get it back to you and whatever. But it
has got to be found first, and I would look at that.
The lowest fare does concern me, what Mr. Wyden says. I
think that can be taken up. If you worked in reservations, Ms.
Jopplin, you are perfectly aware that before you went on a
shift there was always a little meeting before you sat down at
your telephones and started answering reservations, doing in-
line or on-line or inter-line. It did not make any difference.
You had something to refer to.
Today fares change hourly, it seems like, and that is
pretty tough to keep up with. But nonetheless, I think that can
be done at the head of the shift when they go on.
Do you want to respond to that, or maybe Ms. Escarra could?
Ms. Jopplin. Thank you, Senator Burns. I would like to
respond to that. If you will recall, when customers call the
reservation system many times they will ask, what is the lowest
fare to a destination, and they will be quoted a range of
fares. Then they will be asked when their travel date is or
what date in the future they would be traveling. Then it gets
more specific.
The customer is quoted the lowest fare for the applicable
travel. They have an opportunity to change their dates to
modify their travel in order to obtain a lower fare.
I think what is important to understand is that the
airlines have done programming that automatically offers the
lowest fare for the applicable travel dates. Second, the
customer now has the ability to hold that fare for 24 hours
without penalty. If we are holding a customer's fare for 24
hours and that fare is a 14-day advanced purchase, for example,
they have into the thirteenth day to purchase that ticket, and
that is giving them just a little bit extra time to explore
alternative distribution methods such as the internet and then
make their decision.
Senator Burns. Now, also--that is good to know. Also, give
me your policy, either Ms. Escarra or you, give me your policy
on when you learn of a major delay, say a flight is going to be
an hour late out of Kansas City, OK, and what time before
departure do you not call the passengers that you have
telephone numbers on? In other words, is it 2 hours before
flight time do you try to call your passengers on that flight
to notify them of a major delay?
Ms. Escarra. A very good question, Senator. At Delta we
have a policy that says we will do everything we can if we know
of a flight being canceled outside of 2 hours to notify
customers. We have got good information around that that says
we are doing well. Of the customers whose telephone numbers we
have on record, we are contacting 80 percent of those customers
to let them know about that.
Obviously, within 2 hours, generally speaking people have
already made attempts to go to the airport.
Senator Burns. I will say something here. There was a term
used a long time ago, and everybody travels, this is just
``RCNNO,'' ``reconfirmation not necessary.'' Remember those
days? Well, none of us reconfirm. We walk off an airplane and
then we go do our business and we fly the next day, but very
seldom do we ever reconfirm what hotel we are staying in while
we are on the road.
So I am just wondering. The contact of those people is
pretty tough. But that was an old term that I threw out there
that you probably would recognize as an old reservations
person.
I say I am going to probably stay on this thing. Like Mr.
Wyden, I think the fare thing is probably the most important
thing as far as the customer is concerned.
Mr. Mead. Mr. Burns.
The Chairman. Yes.
Mr. Mead. A point on the lowest fare and your interest
there. Some airlines' reservations agents, the ones you call up
on the phone do not know what the lowest fare is that the
airline has to offer, except for the lowest fare that is
available via the telephone. They may not have access to the
Internet fares. So the lowest available fare may not be
available to the reservation agent.
Senator Burns. I am going to tell you something. You have
got a supervisor, a supervisor of that shift, that has ways of
finding out, I think so that they could be brought up to date
on that information. I just feel that--but then again, that
takes extra people, it takes extra, and that is costly. But
nonetheless, I think you have got shift supervisors that also
have certain responsibilities, too.
Mr. Carty. Senator Burns, if I could just make one comment
on that. I just want to be sure the Committee understands that
part of the airline commitment was not to make the lowest fares
on the Internet available over the phone. We never intended
that. I think the policy of a number of airlines to say on
their recording, there may be a fare lower available on the
Internet, is a good one.
But remember, what we are trying to do by using this new
Internet technology is to lower our cost of distribution so we
can offer even cheaper fares. If we have to layer onto the
selling of those fares reservations calls, we will drive up our
costs and we will not be able to offer as cheap a fare. So part
of the whole strategy here is to use today's new technology to
offer lower fares than we otherwise would be able to if we
built in the costs that you just referred to.
So that is why we did not originally make the commitment.
It is not part of the customer service plan. We do
differentiate between Internet fares and res fares, and I just
wanted to be sure that that was understood by the Committee.
Senator Burns. Thank you, Mr. Chairman.
The Chairman. Senator Cleland.
Senator Cleland. Thank you very much.
All of us, I think, have a vested interest in----
The Chairman. I am sorry. I am sorry, Senator Cleland.
Senator Kerry was--I apologize----
Senator Kerry. No, no, no. You go.
Senator Cleland. Yes, sir.
The Chairman. My apologies to both of you. I am sorry.
Senator Cleland. No, not at all.
STATEMENT OF HON. MAX CLELAND,
U.S. SENATOR FROM GEORGIA
Senator Cleland. All of us have a vested interest in a safe
and secure flight. So many of us in America fly now. So the
questions of airline services, airline safety, passenger
convenience, are now a very major public interest.
Atlanta is the largest airport, the busiest airport, in the
world. Ms. Escarra, it is also the great hub of Delta Air
Lines. I would like to know from your point of view what the
fifth runway, adding the fifth runway at Hartsville, will do in
terms of its impact on Delta. Will it improve customer service
by Delta out of that major hub that you have there?
Ms. Escarra. Thank you for the question, Senator Cleland.
Clearly it will improve. Around the information that we were
shown today about delays, pushing back from the gate but not
taking off, improving. A fifth runway will allow, if you will,
the constraint to be moved to a further destination away from
the gate.
We still have concern, and I will reiterate this, that we
find solutions on improving the capacity of air traffic
control. So it will certainly help in the Atlanta hub with us
having the ability to handle more capacity on the ground and
generally speaking in the air. But as we get out--that fifth
runway is actually 3 years away from being completed, as you
well know. We have got to continue to work on ensuring that we
do not move the constraint from being capacity on the ground to
further constraints on capacity in the air.
Senator Cleland. Capacity in the air, which means in your
definition the ability of air traffic controllers to handle the
traffic coming in and out of the busiest airport in the world.
Is that your understanding?
Ms. Escarra. That is my understanding.
Senator Cleland. So with an expansion of a runway it solves
one problem for you, but then it transfers the problem to
another part of the system, is that correct? That is the
crowded corridors the Chairman referred to and the ability of
air traffic controllers and the FAA to handle that traffic, is
that correct?
Ms. Escarra. That is correct.
Senator Cleland. Mr. Mead, it does seem to me that what we
are talking about here and the impact on passengers is the
result of a total system, that the airlines are part of it and
there are certain things that only the airlines can control.
But there are other aspects of the system that affect passenger
service. Sometimes the airlines get blamed fairly, sometimes
they get blamed unfairly.
Weather is an uncontrollable factor for any of us. But it
would be helpful to me, and I do not know whether it is part of
your charge or not, over the next 6 months as you complete this
report on passenger service, if you could maybe allude to the
fact of what is responsible for what. In other words, what are
the airlines basically guilty of, A, B, C, D, then what are the
communities around America that are not expanding airports
guilty of, then what is the FAA and, shall we say, a shortage
of air traffic controllers guilty of?
All of this adds up to a very, very serious situation,
where those of us in the Senate and in the Congress hear
increasing complaints from passengers, and I understand
passenger complaints have increased in the airline industry 100
percent just in 1 year. So, Houston, we have a problem.
But how do we go about managing this problem? How do we
deal with it? Is it just a passenger bill of rights here that
we are talking about? That is like saying we want the cure for
cancer and we want it now, but then how do we get there? Is
your report going to help us get there?
Mr. Mead. I hope to a degree. I think you are right that,
first of all, passenger service is a tough thing to legislate
and I do not think you want to have to try to legislate service
if you can through other measures ensure that it happens.
Senator Cleland. And I would like to talk about that point
in just a minute, as you finish.
Mr. Mead. But as we pointed out in our statement, the
commitments do not directly address some of the underlying
sources of dissatisfaction. Those are the delays, the
cancellations, lengthy lines, lost baggage, and baggage not
showing up when you arrive.
Now, I think the airlines can do a lot better job on the
lengthy lines. That is something that is certainly more within
their control than delays, because there are all these
different factors that come into a delay.
On that point, I would like to say that a year ago we could
not come up here and really tell you how much air traffic was
being delayed. That is because everybody had their own system
of counting delays. The FAA had one system, DOT's Bureau of
Transportation Statistics had another one, the airlines each
had their own, and people could argue about whether there even
was a delay and how much it was.
Over the past year, FAA and the airlines have gotten
together and they now have a common base for calculating when a
delay actually happens. At least that is in place for a number
of very busy airports. Very key. But they have not pushed the
envelope yet to where they have a common framework for keeping
track of why a delay happens. That is why you see a lot of
finger-pointing. People say, well, it is air traffic control;
air traffic control says no, it is the airlines and their
schedules.
This is something that the airlines and FAA really could
accelerate if they put their minds to it, so that we would
start the next year with a framework that people agreed upon
and we could move beyond the finger-pointing. Now, we will go
into that in our report on delays and we will also go into in
our report the different reasons people say that delays occur
and cancellations occur. But it is very difficult on a system-
wide basis to do that without a system in place.
Senator Cleland. Mr. Carty, are we gaming the system? I
mean, I can understand if a plane leaves within 15 minutes of
the scheduled departure time and you call it a departure on
time and that is all right with me. But then to get out on the
runway and sit there for an hour or 2, and to get to where you
are going, as the distinguished Senator from Montana suggested,
it is getting there on time. The passengers know whether they
departed on time and they know when they arrived on time.
Are we playing games here? And is it correct--and I am not
trying to be personal here--that some compensation for airline
executives are based on on-time departure and so therefore if
you push back at the gate on time then your compensation is OK,
but if you sit on the runway for 2 hours nobody is held
accountable? Are we gaming the system here?
Mr. Carty. I do not think so, Senator. As I said a few
moments ago, the critical customer service measure in terms of
dependability has clearly emerged as on-time arrival, not on-
time dependability. And to the extent we have any customer
service measures in our management's incentive plan, they all
relate to arrival dependability, not departure dependability.
When we have extended delays on the runway, the airplane is not
going to arrive on time, so those numbers will fail.
So my own view is we are not gaming it, but the statistics
that Ken shared with you and the deterioration in on-time
dependability and the increase in cancellations we have seen in
the country are really happening. As I said earlier in my
testimony, I am quite pessimistic about our ability to keep up,
the infrastructure's ability to keep up with the tremendous
demand that has been stimulated by deregulating this business.
Senator Cleland. And so much of that is out of your
control. As an airline executive, you cannot go to a community
and say, gee, this is a major hub of ours, we wish you would
put another runway out here so we can do better; or go to a
half a dozen cities and say, gee, we would like to improve our
service to these cities because these are key markets of ours.
Mr. Carty. We are actively engaged as individual airlines
and as an industry to lobbying local airports on capacity.
Certainly, as Ken suggested, we are now collaborating much
better than we were with the FAA on the process of managing the
air space.
But I am concerned that the technology and the
infrastructure, no matter how well we collaborate, simply is
not going to keep up.
Senator Cleland. And part of that infrastructure is the
government, is the FAA, is the air traffic controllers. You are
really a consumer, you are in effect a customer of that
government service, is that not correct?
Mr. Carty. That is absolutely correct.
Mr. Mead. I think we are gaming the system. I would like to
pursue that a bit. With all respect to my friend Mr. Carty
here, I think we are gaming the system on departure delays and
that we ought to face up to it. When the airline's schedule
says that a plane is leaving at 10 a.m., for example, the
airline wants that plane away from the gate within 15 minutes.
I can tell you, I can see it all over the country, our folks
see it all over the country.
They do not tell you, however, if that plane is going to
back away from the gate between 10 and 10:15 so that it is
within that 15-minute window, but that it's not going to take
off. It is not often that I hear the airlines say: And by the
way, when you pull away from the gate at 10:14 there is another
2 hours on the runway. I think the airlines can do a lot better
job of telling people that before they get on that aircraft.
Senator Cleland. May I just go back to the point where the
pilot came on the air and said: We are in this situation; I do
not have a clue what is going on here and I will let you know
when I find out. He gets applause. I think the American people
understand that traveling in the airlines is kind of a risky
business and they do not expect perfection. But I think they do
expect honesty. I do think they expect total access to
information, whether it is air fares, the lowest fare
available, or on-time departure or on-time arrival or whatever.
I think, like so many aspects of communicating with people,
if we just tell them the real story, I think we would all get
along much better. In terms of telling them the real story, Ms.
Escarra, tell us about Delta's effort here to get more
information to the traveling public here.
Ms. Escarra. We briefly mentioned this in the opening, but
let me go back and just talk. Actually, it ties in with the
comment that Ken just made, and that is we agree that when we
know what the delays and-or cancellations are, the causes for
those, and if we know the length of the delay, we absolutely
should be communicating that to customers. It is clearly a big
issue. When you talk to consumers, as we all do day in and out,
they want to know. They want to manage their time.
Our systems are tied together so that all of our operating
systems communicate today--and this is just a month in the
works--communicate today with what the customer sees on the
front line and what our gate agents see. It includes a clear
overview of the content. Now, we still have the issue when you
push away from the gate, and I think our people are doing a
much better job of communicating, maintenance, flight crew,
weather, if we know how long it is going to be.
But Senator, we still have a problem, as was experienced by
Don last night, and I got 8 pages during the course of dinner
about major ATC delay, shutdowns 4 and 5 hours up and down the
East Coast and over Dallas-Fort Worth. When we are not getting
any information from FAA, it is tough to tell customers how
long it is going to be. You think it is tough for all of us. It
is certainly tough on our staff out there to manage those kinds
of situations.
So that continues to be a big concern of ours.
Mr. Carty. Senator, let me just reiterate. With all due
respect to Ken, our agents are not aware of how long these
delays are. Let me read you, if I could, from the FAA's June
21st--this is on their public web site of what is going on,
delays by destination: ``One, due to loss of land and hold
short, departure traffic destined to Boston Logan International
Airport is currently experiencing delays averaging 2 hours and
53 minutes, some flights receiving as much as 8 hours and 10
minutes delay.''
``Due to weather, departure traffic destined to New York
John F. Kennedy International Airport is currently experiencing
delays averaging 32 minutes, but some flights are receiving as
much as 1 hour and 45 minute delays.''
``New York La Guardia, average 2 hours and 48 minutes, some
flights 4 hours and 22 minutes.''
This is last week and this is a typical day with the FAA.
So for an agent to know which of these is going to happen when
the airplane pulls back from the gate is an absolute
impossibility.
Senator Cleland. Thank you very much.
Ms. Escarra. Let me add one more thing, Senator, and that
is the customer information display screens that you are seeing
here are live and there is a delay on a flight from Fort
Lauderdale to Atlanta, which is delayed right now based on a
maintenance problem. So we are telling the customers that it is
a maintenance issue. We are giving them information about how
long we expect that delay to be. So this is real-time
information, again to address your concern.
Senator Cleland [presiding]. Well, a great challenge to us
all, Mr. Chairman, and I think we ought to vote on it.
Thank you all very much for being here.
Senator Kerry [presiding]. I would like to pick up there if
I may. You know, I just do not accept that when you say it is
impossible to know where the delay is going to be. The problem
is we do not have a system. I mean, you are nodding here. We do
not have a system. You are running a major airline and we do
not have a system, in the sense that the FAA is not
coordinating with you, you are not coordinating with each
other. I mean, there are various reasons why that happens and
maybe we have to deal with some of them.
But I know when you get in that cockpit and you sit there
and you call clearance control and clearance control comes on
and they tell you what your clearance is going to be and they
say, expect a delay of X amount of time usually. So you get it
straight from clearance control before you push back.
Now, there ought to be a way with clearance control coming
in. I do not like the idea of Congress trying to legislate
service. I agree with you, Mr. Mead. And I was one of those who
resisted the original passenger bill of rights, based on the
notion that we ought to give people in the private sector the
opportunity to up their service.
But I am beginning to wonder whether we have to create some
standards that say that you are going to have certain
expectations about getting off if there is a certain type or
amount of delay, or there is going to be a right to be able to
be reimbursed under certain circumstances or so forth.
As to the gaming issue, I mean, come on, folks. The entire
schedule is gamed. Delay is written in. An on-time flight to
Boston is about a 2-and-a-half-hour time period, so you can
spend an hour-and-a-half on the ground and you still get in and
the pilot comes on and says: Hurray, we are on time. It is a
50-minute flight and you are telling us that 2-and-a-half hours
is ``on time''.
You game it by building into your schedules the amount of
time that you anticipate normal delay is now going to be. And
you are forced to do that because we do not have adequate
capacity between the FAA and otherwise.
Why do you all leave at 8 o'clock? Why is every flight
scheduled for 7, 8 in the morning? Because people want to fly
then. But every airline says: We are leaving at 8 o'clock. It
is physically impossible for every airline to leave on the
schedule you tell people they are going to leave on, physically
impossible. But you all persist in this myth where we have got
8 o'clock departures. Not going to happen.
You know, I learned something. I ran a small business for a
very brief period of time and it would be laughable compared to
what you all do. But I learned the fundamentals, because we
were going to produce edible goods that were natural and so we
used all natural goods. I knew I had to price these things
accordingly, and so we had to price them a lot more than goods
that were not similarly made. But people bought them, and
within a year, because they were good, we became ``best of
Boston.''
You are trying to run a discount business in a mass way
that pretends it can offer the service, but you cannot because
you are not pricing them accordingly. I mean, why do we have
lines? And I do not want to get into the business of picking
and choosing winners and losers here.
But why is it that we have to send a wakeup call for an
entity that is in the business of providing a service to
people? Why do any of us walk into the terminals anywhere in
America and see these long lines of people? I am astounded at
hundreds of people waiting for hours to get to a counter. Why
is this happening?
Because you are not putting enough people on, because you
do not have enough counter space? That costs money? Well, maybe
the tickets should cost more. Maybe you are not pricing your
service at the rate that the service costs because you want
more and more and more people, because you want more people to
ride on a service that does not have the ability to provide
people what you pretend you can provide them. That is what is
happening here. It is exactly what is happening here.
If you can tell me otherwise, tell me. You are all
competing with each other to get that lower fare, to get more
people into an airport that cannot hold more people, to fly
into airports that cannot hold more airlines. This is the best
advertisement for Amtrak I have ever heard of.
Now, am I wrong at that? I mean, are we not gaming this
thing?
Mr. Carty. No, you are not wrong. You are talking about to
some degree the inadequacies of the infrastructure. You walk
into the Boston Airport at 8 o'clock in the morning, every
ticket counter position we have is manned. The airport needs to
be bigger because Boston traffic is growing. We all know that.
But getting an expansion in Boston, as you know, Senator Kerry,
is no trivial thing.
Senator Kerry. And you are doing that and I love it and it
is going to be a great thing, and I admire you for being able
to try to pull it off in the midst of everything else that is
going on up there.
Mr. Carty. But moving that infrastructure, moving the air
traffic control infrastructure--I mean, we could go at 9
o'clock, let everybody else go at 8, and most of the passengers
are going to go on the 8 o'clock flights.
Senator Kerry. No, because there are not enough slots to
take them at that hour and there are not enough aircraft.
Mr. Carty. There are not slots now. Now, if you impose
slots then we will put the airplanes where the slots are.
Either we need to--Ken made this point earlier, I think.
Either we need to increase the infrastructure or some
government policymaking people have to define capacity for us
and we will operate as competitively as we can under that
environment.
Actually, most recently Congress is headed in the opposite
direction. Three of the four airports that have been slot-
constrained are going to become unslot-constrained.
Senator Kerry. And there is going to be chaos.
Mr. Carty. As a big operator in Chicago, we are going to
have chaos in Chicago.
Senator Kerry. That is right, it is an invitation to it.
Mr. Carty. Because we have not added capacity. It is an
invitation to it.
Now, there are things that can be done to broaden the air
traffic control infrastructure. As a pilot, I know you know
this and so I will not go through it. But a lot of it is going
to involve a lot of technology and a lot of investment, and it
is not going to happen by next summer.
Senator Kerry. Well, let me ask you this question. Is it
true that the spacing is 65 miles on an awful lot of aircraft
flying cross-country at this point? Do you know what the
spacing is?
Mr. Carty. The spacing will change. That is part of the way
the air traffic control people manage it.
Senator Kerry. But current spacing, current spacing I
understand, according to a number of friends in the industry,
is almost absurd.
Mr. Carty. It is longer than we believe it needs to be.
Senator Kerry. I see heads nodding. People are agreeing.
Ms. Escarra. It is very conservative.
Senator Kerry. But why? Why are we doing that?
Mr. Carty. I would say we are managing the existing
capacity more conservatively than we have ever managed it
before.
Senator Kerry. Is there not a greater capacity to
restructure even some of the corridors, some of the airways, in
ways that channel aircraft? I mean, it seems to me common sense
would say we can get some cross-country aircraft coming in at X
number of altitudes, bringing them down, out over the water,
bring them back in, in a way that they stay out of the traffic
on the other side.
I mean, I see someone sort of saying, yeah, let us go do
this. Why are we not doing this? I do not understand. It seems
to me--let us get General Horner, who seems to have a pretty
good sense of how to coordinate a lot of aircraft at the same
time, to put a new system together. Would you like that?
Mr. Carty. I think there is no question in the short to
intermediate term we are going to have to agree to some rules
of the road that are different than they are today. The FAA has
got to coordinate it.
Senator Kerry. Have you asked the FAA to do that?
Mr. Carty. I have explicitly asked the FAA to do it.
Senator Kerry. Have all of the airlines come to them and
said, will you do this?
Mr. Carty. I do not know that, Senator Kerry, but I do not
believe they all have.
Senator Kerry. Well, do you not represent them all as the
Air Transport Association?
Mr. Carty. Well, I certainly do not get to speak for all of
them, although I would like to on most days. I do not mean to
be facetious.
Senator Kerry. But should not all of you be beating down
the door of the FAA and saying: We can facilitate this; here is
a plan; we can simplify the approaches and the use of these
corridors much more efficiently?
Mr. Carty. Yes, I think we should. In fact, it is a very
good segue into a comment I was going to make, and that is the
ATA is focusing right now on putting together a consensus among
the members of what all the priorities that we think should be
in place at FAA, both in terms of process and procedure and in
terms of new technology, and we intend to deliver that to the
FAA as fast as we can get it done.
Mr. Mead. You have to look at modernizing the national
airspace system in 5-year blocks of time, Senator. I see
measures that need to be put in place over the next 5 years as
being different than the measures that would be in place 5
years from now.
For example, Senator McCain earlier mentioned that later
this session he is going to hold hearings on ATC modernization.
One of the big projects that FAA has under way is the Wide Area
Augmentation System, or WAAS, which is a satellite-based
navigation system. WAAS will shift navigation from a ground-
based system to a satellite-based system that relies on the
DOD's Global Positioning System. This is very integral to the
Free Flight initiative that you have heard about.
The WAAS program is having a fair number of problems, but
the airlines, once they can transition to satellite navigation,
will be able to fly more flexible routes. The airlines will be
able to do a lot more in reference to those maps in the sky
that you were suggesting be redrawn. But WAAS, unfortunately,
is some years away.
Senator Kerry. Some of the technology is years away. But a
lot of this is not technology-dependent. A lot of this is just
common sense, creativity, thoughtfulness, not being stuck in
bureaucratic mud and being willing to try to coordinate with
the airlines how we can do this better.
We cannot tell the American people that we are going to
keep inviting more and more people into airports that are more
and more crowded and incapable of providing the service. We
have got underutilized airports in certain places. I look at a
place like Westover Air Force Base or other places in New
England. But we do not have the connections. I mean, this is
where we need a transportation policy where we have high-speed
rail and high-speed connection capacity to alleviate it.
Incidentally, the high-speed corridor in the Northeast
could alleviate some of it. Now, you do not like to hear that
because it may mean less people ``flying'', but you do not have
the infrastructure to support what is flying today.
So people have got to start making some smarter business
choices here, I think, respectfully. And I do not understand
how you board an aircraft where you know there is going to be
as long a delay as there is. I know you need the gate, so maybe
somebody has to back the aircraft off and take it out to the
apron and sit there without the people in the plane. Let them
have the conveniences of these wonderful airports that are
being built with stores to buy things in, places to eat, then
bring it back to the gate and give them 15 minutes to board and
take them out.
I mean, there have to be better ways to do this.
Ms. Escarra. We agree with that. One thing that we are
clearly doing today versus where we were a year ago is having
our management team and front line people at the gate talk
about information that they know, obviously in line with what
we discussed today, and if it appears that there is going to be
a 2-hour delay to talk to the customers about that but not
board the airplane. That is a great point and we are doing
that.
Senator Kerry. Well, I need to go vote. There were other
areas that I wanted to try to pursue with some of you. Maybe we
can do that by written questions. But I know the FAA is
planning some of this redesign and I know that we are behind in
terms of some of the technological expenditure that should have
been made. I have for a number of years now been ranting about
Congress' own inadequacy in responding to this in terms of the
capital costs of some of the technology that ought to be put
out there.
But I cannot, notwithstanding all of those difficulties,
excuse easily the lack of coordinated effort that ought to be
taking place to deliver a better service here. And I feel so
badly for good people behind those counters who endure the
wrath of so many people on a daily basis. They are good folks
and they are the victims, too. They do not know what is going
on. They cannot get the answers. It is very tough on them.
So I think we have really got to see the leadership of the
industry take initiative here and help to make it happen. And
we will do everything we can to leverage the FAA, leverage the
government response, and make certain that we are being
creative and thoughtful here.
But when I hear about some of these spacings and some of
the reasons for delay and the excessive sort of bureaucracy
that is restraining people from some creative and thoughtful
kinds of responses here, particularly given some of the
technology we have in the air today--I mean, the TCAS and other
kinds of things that are improving safety--it seems to me we
can do better, all of us, and I hope we are going to do it.
I have got to go vote. I thank you for being here. Mr.
Mead, we will look forward with great anticipation. You can get
a sense from the Committee that you are on the right track, and
we are going to watch with interest.
I hope the airlines will come to us and ask us. Do not wait
for us to come here to the next hearing and say, look, this is
the problem. I will convene a meeting. I am sure the chairman
will happily get the FAA and people at some meetings. Let us
get people together and see if we can constructively get a
response to this, because we are all going to suffer greatly if
we are just promising Americans another summer like this one.
That just is unacceptable.
With that, we are adjourned. Thank you.
[Whereupon, at 12:12 p.m., the Committee was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Slade Gorton
to Hon. Kenneth M. Mead
Question 1. You report that the Commitment does not directly address
underlying reasons for customer dissatisfaction, such as extensive
flight delays, baggage not showing up on arrival, long check-in lines,
and high fares in certain markets. In your opinion, until the airlines,
FAA, and others also effectively address these areas, there will
continue to be discontent among air travelers. How did you come to that
opinion? Who are the ``other'' that you refer to?
Answer. The sources for identifying the underlying reasons for
customer dissatisfaction are found in DOT'S Air Travel Consumer Report,
independent surveys conducting by consulting firms such as JD Power,
and academic studies by Universities. ``Others'' we refer to include
airport operators and organizations representing airline employees such
as flight attendants and pilots.
Question 2. It has been six months since the airlines have implemented
their customer service plans. You are of the opinion that this is not
enough time to evaluate the effectiveness of these plans, but that at
the 12-month, it should be possible to judge the success of these
plans.
If you ultimately conclude that the airlines' plans have been
successful, or that a small portion of the airlines has not met the
grade, would there be any need for OIG to continue monitoring the
execution of the plans or let ATA and its member airlines do the
monitoring?
Answer. Periodic monitoring would have a healthy effect of keeping
the airlines vigilant and focused on customer service. In fact,
subsequent to our Interim Report, Chairman McCain and Senators
Hollings, Rockefeller and Wyden have requested that we continue to
monitor, review, and report, following the release of our final report
in December, on the implementation of the customer service commitments
and airlines plans. The results in our final report will determine the
scope of follow-on reviews. We may find that there are only a few
customer service areas that require continuous monitoring, especially
those that are governed by DOT regulations such as involuntary denied
boardings.
If you ultimately conclude that the airlines' plans were not
successful, would you recommend that Congress legislate good customer
service?
Answer. Good customer service, like good management, is difficult
to legislate. If we find areas that lend themselves to legislation, we
would recommend that actions be taken. It is important to note that 7
of the 12 commitments and corresponding provisions in the airlines'
plans are already covered by existing legislation. For example, the
requirement for accommodating persons with disabilities are found in
the Air Carrier Access Act of 1986 and codified in title 14 Code of
Federal Regulations Part 382.
Other areas of the commitments and their implementing plans, such
as the 24-hour hold or refund for reservations made over the telephone;
offering the lowest fare available over an airline's telephone
reservation system, returning delayed or mishandled baggage within 24
hours; and accommodating passengers put into an oversight status due to
Airline operations could be covered by legislation if circumstances
warrant. While such legislation is possible, we would much prefer the
airlines achieve good customer service through healthy competition.
Another reason we hope the Airlines implement good customer service
on their own is that some areas in need of attention are difficult to
legislate. One such example is the commitment to meet customers'
essential needs during long aircraft delays. As currently written, the
provision uses general terms such as ``food,'' ``every reasonable
effort,'' ``for an extended period of time,'' or ``emergency.'' These
terms are not clearly defined and do not provide the passenger with a
clear understanding of what to expect.
Question 3. You report that most of airlines did not have performance
measurement systems in place to gauge where the airlines were with
respect the success of their plans.
Were you surprised to find this to be the case?
Answer. Yes. We would have expected to see established, credible,
time-tested systems for monitoring customer service, including
performance goals and measures.
What would you expect to see in respect to an airlines performance
measurement system?
Answer. At a minimum, a credible tracking system for compliance
with its Plan, buttressed by performance goals and measures. The
airlines argue that most of the commitment provisions can not be
measured quantitatively. However, we disagree because we have designed
tests for measuring each provision quantitatively, and have, so far,
been successful in doing so.
What have the airlines done to assure you that performance measurement
systems are in place and properly executed?
Answer. We discussed our concerns about the lack of performance
measurement systems with the airlines. Based on those discussions, the
carriers have committed to take action by establishing performance
measurement systems. We have had an opportunity to review several of
the airlines' performance measurement systems and the systems, if
properly executed by the airlines, should be an effective tool for
measuring success of their customer service plans.
Question 4. You reported that the majority of Airlines did not have a
system in place for tracking what they considered to be their 24-hour
window. As a result, the Airlines could not ensure they were in
compliance with the provision.
Do you have any assurances from the airlines that systems are in place
to track compliance with this commitment?
Answer. As part of their performance measurement systems, the
Airlines assured us that systems to track and monitor compliance with
the Commitment would be implemented. So far, however, our testing has
shown that most the airlines have come up short in putting a tracking
system in place to ensure that misrouted and delayed baggage is
returned to the passenger within 24 hours.
Have your testers had a chance to see any of the systems in place and
whether they are working?
Answer. Our testing is ongoing and the results are mixed. We have
seen at the different airports visited that there is really no uniform
tracking system in place within an airline's operations or among the
airlines. We have found tracking systems in place and being used; in
place and not being used; and simply not in place. At those airports
where the airlines had a tracking system in place and being used, our
testing showed higher levels of compliance with this Commitment to
return baggage with in 24 hours.
Question 5. The airlines have said they should not be judged on their
customer service plans yet and everyone should withhold judgment until
the end of the year, when they will have ample time to implement their
plans. Would you expect the number of complaints will decrease by the
end of the year as the airlines continue to implement their plans?
Answer. We would hope to see complaints decrease as the airlines
continue to implement and improve on their customer service plans.
However, there are different dynamics that make it very difficult to
predict if complaints will decrease or increase. The reality is that
the Internet has undoubtedly made it easier to file a complaint to DOT.
In addition, the increased visibility of airline customer service in
Congress and the national media may have an influence on the number of
complaints filed with DOT. It is clear that there has been an increase
in complaints in 1999, continuing on into 2000. For example, complaints
for the first 6 months of 2000 increased 60 percent (6,584 to 10,530)
over complaints during the same period in 1999. As expected, flight
problems (delays, cancellations, and missed connections) ranks as the
number one complaint. Also, the trend for 2000 shows consumer
complaints on the rise, month to month. For example, complaints for
June 2000 increased 43 percent (1,495 to 2,141) over complaints in May
2000. Because of the different factors involved, especially the new
technology of the Internet, DOT may want 2000 as the new baseline year
for measuring whether air travel consumer complaints have increased or
decreased.
______
Response to Written Questions Submitted by Hon. John McCain
to Hon. Kenneth M. Mead
Question 1. With respect to the airline commitment to offer consumers
the lowest fare, you report that there were sufficient number of cases
in which the lowest fare was not offered to warrant that the airlines
pay special attention to this area.
What do you mean by sufficient number?
Answer. At the time of our report, we had tested three airlines
making 272 telephone reservations based on statistical sample of
flights, and found for 13 of the reservations made the lowest fare was
not offered.
What was the error rate?
Answer. This equates to a simple arithmetic error rate of 5
percent. However, using statistical sampling we will be able to project
a more precise error rate to the sampled population once we have
completed all our testing and analysis.
We recently completed testing at 8 other airlines and found that
the lowest available fare was offer at least 99 percent of the time for
7 of the 8 airlines. However, for the remaining one airline, we found
an error rate of 15 percent. We expect by year end to make a qualified
statement on the percentage of compliance, by airline, for offering the
lowest fare available.
Question 2. You have reached out to industry groups representing the
disabled to assist in testing the industry's compliance with the Air
Carrier Access Act. Do you have any results to report on how well the
survey is working and whether the airlines are complying?
Answer. To date, we have not received enough information to arrive
at a conclusion on whether the airlines are complying with the Act. We
have recently posted on the DOT'S OIG web site a survey that will help
us evaluate how well the US. airlines are accommodating the needs of
air travelers with disabilities and special needs. We have reached out
to 11 different organizations representing persons with disabilities
and special needs to assist in the survey. Organizations such as the
Paralyzed Veterans of America, National Association for the Deaf
American Federation for the Blind, and the National Organization on
Disability will have direct access to the survey through the Internet.
We do expect by year end to make a qualified statement on the treatment
of persons with disabilities and special needs during air travel.
Question 3. Are passengers who purchase electronic tickets at a
disadvantage when it comes to the information they receive regarding an
airline's customer service plan or contract of carriage? In other
words, what do the airlines do to ensure that passengers who fly
ticketless receive the same information ahead of time as those who
purchase traditional tickets?
Answer. Various DOT regulations require US. and foreign air
carriers to provide consumer notices on or with passenger tickets.
These notices provide information about protections afforded by federal
regulations, limitations on air carrier liability, and contract terms
that passengers may not otherwise be aware of such as ticket refund
penalties or baggage liability limits. DOT'S Statement of Compliance
Policy: Ticketless Travel: Passenger Notices filed under Docket No.
OST-96-993 and published in the Federal Register Vol. 62, No. 77, dated
April 22, 1997, states that the consumer notices required by Department
regulations must be given or be made readily available to
electronically ticketed passengers in writing no later than the time
that the passengers check-in at the airport for the first flight of
their itinerary. However, DOT also opined that airlines may find it
advantageous to continue to provide DOT ticket notices to ticketless
passengers in advance. In our review, we have found that most of the
airlines provide its ticketless passengers, at the time of purchase or
shortly thereafter, the consumer notices required by DOT. The consumer
has a choice of having the notices mailed, e-mailed or faxed.
Question 4. Your report states that cancellations increased 68 percent
between 1995 and 1999. While I understand you have a separate review on
flight delays and cancellations, in general, what percent of
cancellations are the results of airline operations versus other
factors that are beyond the control of the airlines?
Answer. Based on information we received from 8 of the 10 major air
carriers during our audit of flight delays and cancellations,
approximately 66 percent of cancellations between 1995 and 1999 were
due to service irregularities within the carriers control such as (1)
aircraft maintenance and equipment, (2) lack of aircraft/flight crew,
or (3) lack of ground support services, such as fueling. There are also
other miscellaneous factors attributable to cancellations reported by
the carriers but not necessarily within their control, such as runway
closures or FAA security checks. However, cancellations attributable to
these factors represent a very small percentage. The air carriers also
attributed 26 percent of cancellations over this period to poor weather
and 8 percent to FAA's Air Traffic Control (ATC). In 1999,
approximately 54 percent of cancellations were due to service
irregularities within the carriers control, followed by weather (32
percent) and ATC (14 percent).
Question 5. Your report states that for the most part, the airline's
commitment for better customer service was essentially a recommitment
to place a substantially greater emphasis on compliance with existing
law and airline policies and procedures. Should government do a better
job of enforcing the existing laws and regulations related to customer
service?
Answer. We agree that the DOT should do a better job of enforcing
the existing laws and regulations related to customer service,
especially regulations pertaining to accommodating the needs of air
travelers with disabilities. A recent report submitted to the President
from the National Council on Disability (NCD) discloses that although
things have improved since the Air Carrier Access Act was passed in
1986, people with disabilities continue to encounter frequent,
significant violations of the statue and regulation. However, as
pointed out in both the NCD's report and our Interim Report, we believe
there is cause for concern whether the oversight and enforcement
expectations for the DOT'S Office of Aviation Enforcement and
Proceedings significantly exceed the office's capacity to handle the
workload in a responsive manner.
For example, resources dedicated to the Aviation Enforcement Office
are inversely proportionate to its workload. Staffing has declined by
more than half during a period when the office's workload has been
expanding: air traffic more than doubled, complaints increased from
7,665 in 1997 to 20,495 \1\ in 1999, additional requirements were
established (such as the Air Carrier Access Act and the Aviation
Disaster Family Assistance Act), and recently, the Commitment emerged
as an important element in protecting passenger rights. An issue that
office will face soon is whether policies contained in the Commitment
and the Airlines' implementing plans are enforceable of they are not
also contained in the Airlines' contracts of carriage.
---------------------------------------------------------------------------
\1\ Total number of aviation consumer complaints filed with DOT for
the entire industry (U.S. air carriers, foreign air carriers, tour
operators, etc.).
Question 6. Do you think telephone reservation agents should be
required to tell passengers that they could find lower fares on the
Internet? Do you think that these reservation agents would feel that
they are putting themselves out of a job by telling people to use the
Internet?
Answer. In our discussions with the airlines' telephone reservation
agents about the Commitment provision to offer the lowest fare
available, we found no evidence that the agents would feel their jobs
were in jeopardy if they disclosed to the customer that lower fares may
be available on the Airlines Internet web sites. Also, as part of their
customer service plans, 8 of the 14 airlines disclose to the consumer
that lower fares may be available on their Internet web sites or other
distribution systems. Additionally, four airlines already notify the
customer through an on-hold message in their telephone reservation
systems that lower fares may be available through other distribution
sources and during different travel times. In our Interim Report, we
suggested that the airlines (10 of 14) that have not already done so
should consider affirmatively informing the customer that lower fares
may be available if the customer has a flexible schedule, or through
other airline distribution systems including their Internet web sites.
Also, in our review of this Commitment provision, we found that
airline Internet fares are not part of the airlines computer
reservation systems and telephone reservation agents do not have access
to the airlines Internet fares and fare rules. Therefore, we believe
that airline telephone reservation agents should only be required to
notify consumers that lower fares may be available on the airline's
Internet web site and should not be required to quote Internet fares.