Better airline customer service? New DOT rules may help

Stranded Southwest Airlines passengers look for their luggage in the baggage claim area in Chicago … (+) Midway International Airport

AFP via Getty Images

For years, it seemed like airlines were in a race to the bottom when it came to customer service quality. They packed more seats onto planes and added fees for everything from checked bags to seat selection. Additionally, many practices related to changes, flight cancellations, delayed bags and more favored airlines over flyers. The Biden-Harris Administration and Department of Transportation (DOT) 2024 regulations could help alleviate some of these problems.

The new rules, many of which come into force on October 28, 2024, aim to give passengers more control when something goes wrong. For example, airlines will be obliged to refund canceled flights, even if the tickets were previously non-refundable. The DOT will also require airlines to clearly disclose baggage fees and other optional fees up front.

Mario Matulich, President of the Client Management Practice, believes that DOT regulations come into play … (+) effect this month to be intuitive for consumers.

Source: Mario Matulich

“The adopted rules are very intuitive. I believe they are absolutely necessary,” says Mario Matulich, president of Customer Management Practice, in a recent interview. CMP

These changes could have a similar impact to regulations that crack down on unintentional aircraft strikes. While overbooking and bouncing ticketed passengers was once common, it is now relatively rare for passengers to be denied boarding against their will.

The proposed regulations also include provisions intended to make life easier for families traveling with small children. Airlines will not be able to charge extra fees to ensure that children under 13 can travel with a parent or adult guardian. In the past, some airlines charged as much as $50 per seat for this service.

Will DOT regulations have a different impact on airlines?

DOT’s current and proposed rules apply equally to all major airlines. However, some airlines may be better prepared to adapt than others.

“I think there are some differences across airlines,” Matulich says. “I think some of those who are already invested in the digital fundamentals… will be a little bit more advanced in some of these things.”

Southwest Airlines, for example, is investing heavily in improving its data infrastructure after last year’s holiday crash. But some experts say that may not be enough, citing the company’s traditional reluctance to prioritize technology spending.

Will airlines compete on customer service, not just price?

“CX is an interesting competitive battleground for any industry,” Matulich says. “We’re starting to level the playing field a little bit here.”

United Airlines provided one indicator that the battle over customer service quality is intensifying. Earlier this month, they announced that all planes would get improved Wi-Fi from Elon Musk’s Starlink and that it would be free for all passengers. This is a shocking departure from the previous standard practice of most major airlines of offering amenities as paid a la carte options.

“Airline Customer Service Panel” DOT

DOT has created an easy way for passengers to compare airline practices on various aspects of customer service.

Partial view of the DOT Airline Customer Service dashboard as of 9/30/24

Source: Roger Dooley

The DOT’s airline customer service dashboard shows, for example, which airlines will rebook passengers on a competitor’s flight if their own flight is delayed or canceled, and which airlines will provide stranded passengers with meal or hotel vouchers . This information can help consumers make more informed choices about the airlines they choose to fly with.

Will DOT fines cause change?

History shows that when customer inconvenience results in significant penalties, airlines minimize these profitability impacts by improving operations. When was the last time you saw a passenger denied boarding due to overbooking?

The Department of Transportation says it has levied nearly $170 million in fines on airlines for consumer protection violations since President Biden took office compared to just $70 million in the previous four years.

In 2023, the US flight cancellation rate was at a record low of less than 1.2%. It was the lowest rate in more than 10 years, even as air travel set new records. While it’s impossible to say how much increased fines or the threat of them impacted flight cancellations, they were likely a factor in airlines’ decisions.

Most airlines want to provide customers with an experience that will bring them back to flying. They may not like rules and penalties, but in the long run these penalties push them in the direction they know they should go.