seawolf

Remember Air Canada refusing to refund during COVID and actually went challenged US DOT Consent Order requiring AC to refund? Air Canada's argument was US DOT's position on requiring carriers to refund on cancelled/significantly changed flights was not binding.

Master thread Air Canada Refunds vs credits; Class action lawsuit filed

US DOT is about to making it binding - https://www.federalregister.gov/public-inspection/2024-07177/refunds-and-other-consumer-protections
https://www.transportation.gov/briefing-room/biden-harris-administration-announces-final-rule-requiring-automatic-refunds-airline

billdokes

It's a zero sum game for the airlines...it will just come back in the fares so some will win and everyone will lose.

Not saying I disagree with it, but it will just work it's way in as an input cost to building the fare structure, just like a rise in the price of fuel or wages.

CathayMVP

Lol I am fine with it

Intra-Europe tickets and tickets to Europe are very cheap still with EU261

The Top 3 Airlines in the world based on Revenue are DL, UA, and AA

https://companiesmarketcap.com/airli...es-by-revenue/

flyingcrooked

I'm not sure that's right. One often hears that consumer-protection regulation is bad because airlines will just raise prices. But it would have this effect (or at least should have this effect) only if airlines think raising prices is the best way to maximise profit given the new regulation. It might be. But it could be that raising prices will hurt passenger numbers and the best course of action is to do more to reduce cancellations.

Some airline travel is relatively insensitive to price, but a lot of it is price-sensitive discretionary travel, and it's not obvious that just baking these costs into ticket prices would be the astute business move for an airline. (It remains striking that the EU market is both the home of very cheap flights and very demanding regulations.)

nmpls

I will additionally note that some airlines do this stuff already instantly without question (WN springs to mind) and the legacy US airlines (but not AC, yet), have to still compete with them. I've also never had an issue with UA refunding, but my sample size is smaller. Actually, AC is the only one who has ever given me trouble.

AJNEDC

How is this about to come back in fares? Whatever fare is charged, airlines will have to refund if the situations identified by this DOT policy occurs. Further, quite a bit of travel is price sensitive. I see no possible reason why this policy should result in price increases.

blue2002

Airlines will adjust some of the fares upwards to maintain a contingency for these refunds / payments. Not all fares need to be adjusted, just the ones where "price sensitivity" is lower/lowest. Simple.

flyingcrooked

The problem is: why are they failing their shareholders by not already setting prices at that level? They are in effect donating shareholders’ money to the people buying those tickets.

AJNEDC

Contingency for what? The airlines are not being asked to refund more than what was originally charged. Simple, but rather incorrect reasoning, I would agree.

vancouver25k

Well the airline does net the fare increase for all the flights that do arrive on time.

Agreed mostly. My above statement was made with no consideration of this context.