Recent FAA Reauthorization bill directs DOT to address issues with its Refunds and Other Consumer Protections final rule
June 12, 2024 – Today, the Travel Technology Association (“Travel Tech”) sent a letter to Secretary Pete Buttigieg, asking the U.S. Department of Transportation (“DOT”) to immediately begin the rulemaking process called for by the Securing Growth and Robust Leadership in American Aviation Act to require airlines promptly provide refunds to ticket agents. The Securing Growth and Robust Leadership in American Aviation Act was recently passed by Congress and signed into law by President Joe Biden.
“Ticket agents’ core purpose is to serve consumers and act on their behalf in merchant-of-record situations,” said Laura Chadwick, Travel Tech President & CEO. “When refunds are required, consumers are due back their money from airlines and no one else. We are thankful Congress has directed DOT to take up this new rulemaking to protect consumers and ticket agents alike.”
In its Refunds and Other Consumer Protections final rule, published on April 26, 2024, DOT declined to require airlines to provide prompt refunds to consumers when ticket agents serve as the merchant of record. This will create situations wherein ticket agents must provide refunds to consumers without first receiving consumers’ funds back from the airlines.
To rectify DOT’s decision, at Travel Tech’s urging, Congress included a provision in the Securing Growth and Robust Leadership in American Aviation Act that states, “(2) TRANSFER OF FUNDS.—The Secretary shall issue regulations requiring air carriers and foreign air carriers to promptly transfer funds to a ticket agent if—“(A) the Secretary has determined that the ticket agent is responsible for providing the refund; and “(B) the ticket agent does not possess the funds of the passenger. (Sec. 503, Refunds)
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
On Wednesday, May 8th, Travel Tech hosted airline industry attorneys Jol A. Silversmith and Barbara Marrin of KMA Zuckert to outline the “Top 7 Takeaways on the New U.S. DOT Ancillary Fee and Refunds Rules.”
As discussed in the webinar, both rules have serious implications for both large and small travel technology businesses.
Did you miss the live webinar but still want to learn more about how these new rules will impact your business?
Fill out the form below to receive the link to the webinar and a PDF summary of the top seven takeaways:
Disclaimer: The Travel Technology Association is providing this webinar and the accompanying document as educational materials and not as legal advice. You must consult your own legal counsel for specific interpretation and applicability of these rules to you or your company.
Amendment #1954 ensures the fiscal solvency of ticket agents, large and small
May 6, 2024 —The Travel Technology Association (Travel Tech) issued a letter in support of an amendment to the FAA reauthorization bill currently under consideration by the U.S. Senate. Amendment #1954, sponsored by Senator Rand Paul (R-KY), instructs the U.S. Department of Transportation to issue a new regulation within six months to clarify that “a ticket agent shall provide a refund only when such a ticket agent possesses, or has access to, the funds of a passenger.” Similar language was included in H.R. 3935, Securing Growth and Robust Leadership in American Aviation Act, the House-passed FAA reauthorization bill in July 2023.
The U.S. Department of Transportation recently issued its final Refund rule, which requires airlines to automatically provide refunds to passengers who book through their platforms. Per the final rule, ticket agents must make refunds to customers within seven business days when they are the merchant of record. However, the final Refund rule makes no provision on when airlines must provide refunds to ticket agents. As a result, ticket agents will be unfairly forced to make refunds without first having the customers’ funds returned by airlines.
“Senator Paul’s Amendment is of utmost importance to ensure the solvency of ticket agents large and small, especially during massive refund events like winter storms and hurricanes,” said Laura Chadwick, President and CEO of Travel Tech. “Ticket agents play no role in airline delays or cancellations yet will be held financially responsible for them, perhaps indefinitely. The U.S. Senate should adopt Amendment #1954 and require the Department to issue a new rule to protect ticket agents when they are the merchant of record.”
Over 100 amendments, including #1954, have been filed in the U.S. Senate ahead of consideration of the newly released bipartisan, bicameral bill to reauthorize the Federal Aviation Administration (FAA). The current authorization for the Federal Aviation Administration ends on May 10, 2024.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
Monday, April 29, 2024 — Last week, the U.S. Department of Transportation announced its final regulations on the transparency of airline ancillary service fees and refunds to customers for delayed and canceled flights.
What do the rules mean and how will they impact your business?
Join Travel Tech on Wednesday, May 8th, 2024, at 1:00 pm for a free webinar featuring airline industry attorneys Jol A. Silversmith and Barbara Marrin of KMA Zuckert.
Airline industry attorneys Jol A. Silversmith and Barbara Marrin will outline the top seven takeaways about these new regulations and answer your questions. Following the webinar, all registrants will receive a written memo about these seven takeaways.
April 24, 2024 — Today, the Department of Transportation issued two final rules impacting the travel tech industry: the transparency of airline ancillary service fees and refunds of airline tickets for delayed or canceled flights.
“Travel Tech has long supported the Department of Transportation’s goals to provide greater transparency to airline consumers on ancillary fees and clear guidelines on how and when refunds are made. Regrettably, today’s final rules fail to account for how these goals can technically be achieved, adding unnecessary costs and confusion for consumers,” said Laura Chadwick, President & CEO of the Travel Technology Association (Travel Tech).
In its ancillary fee comments, Travel Tech strongly advocated that airlines be required to provide critical ancillary fee information to all ticket agents and intermediaries, including GDSs, and not only to consumer-facing ticket agents as proposed by the Department of Transportation. Many ticket agents rely on GDSs to access airline schedules, fares, and availability information. Unfortunately, in the final ancillary fee rule, the Department declined to alter its proposal.
“Unfortunately, by not including GDSs, the very purpose of this rulemaking will be undermined, making it harder for ticket agents to inform consumers about the cost of ancillary services,” said Chadwick. “Had airlines been required to provide ancillary fee data to all ticket agents, transparency for consumers could have been achieved in months, not years. Consumer advocates cited this reason in their comments for supporting Travel Tech’s position.”
The Department’s final refund rule requires airlines and ticket agents (when acting as the merchant of record) to provide refunds to consumers within seven business days. While the rule requires airlines to notify ticket agents “without delay” when a consumer is eligible for a refund, it will still create situations in which ticket agents must provide refunds without first receiving the consumers’ funds back from the airlines.
“The final refund rule will render ticket agents as airlines’ de facto banks, forcing agents to float airlines’ refunds potentially indefinitely. Doing so unfairly places ticket agents in a precarious financial position that risks their ability to provide comparison shopping tools for consumers in the first place.”
The Travel Technology Association calls on Congress to pass its FAA reauthorization legislation. House and Senate versions of the bill include provisions supported by Travel Tech that provide sensible relief from some aspects of the Department’s final ancillary fee and refund rules.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
April 1, 2024 – Travel Tech, together with the American Society of Travel Advisors (ASTA) and the Travel Management Coalition, sent letters to the U.S. Senate Committee on Commerce, Science, and Transportation and the U.S. House Committee on Transportation & Infrastructure to highlight the provisions in the House and Senate FAA Reauthorization bills that apply to Travel Management Companies (TMCs) and request amendments and exemptions.
Services provided by contract to TMC customers include duty of care, management of complex itineraries involving larger groups of employees, and of course, changes, cancellations, and re-bookings. TMCs also manage travel for federal government agencies, including our nation’s military. TMC customers do not book or manage travel using online travel platforms available to the general public.
“Travel Tech thanks the leadership of the Senate and House committees for their work to advance the FAA Reauthorization,” said Travel Tech President & CEO Laura Chadwick. “We now ask that you recognize that Travel Management Companies, who do not book or manage travel using online platforms available to the general public, should be exempted from provisions intended for the general public.”
In the letter, the following requests were outlined:
Unless exempted, the proposed requirement would be problematic and unnecessary for corporate agencies, as the systems that TMCs and their business customers use for booking business travel differ from an airline website or online travel agency (OTA) site accessible to the general public.
Sec. 702 of the Senate bill directs the Secretary of Transportation to issue a final rule to apply refund requirements to Ticket Agents in the case of canceled or significantly delayed flights. However, Ticket Agents are not in a fiscal position to provide refunds without first receiving the passengers’ funds back from the airlines. The House bill clarifies this provision and should be fully adopted.
Section 702 of S. 1939 requires Ticket Agents to prominently display on their websites a link that passengers eligible for a refund may use to make a request. This provision would require ticket agents, such as TMCs, who do not serve the general public but have a public website, to comply. However, Travel Management Companies already have specific refund obligations under their contracts. Accordingly, the refund portal provision should exempt ticket agents who provide travel services pursuant to corporate or government contracts.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
Final bill may be considered before the expiration of the FAA’s authorization extension on May 10th
March 27, 2024 – This week, Travel Tech sent letters to the U.S. Senate Committee on Commerce, Science, and Transportation and the U.S. House Committee on Transportation & Infrastructure as they work to align H.R. 3935, the Securing Growth and Robust Leadership in American Aviation Act of 2023 and S. 1939, the FAA Reauthorization Act of 2023 into one FAA reauthorization bill to be considered by both the House and Senate. Travel Tech’s letters highlighted its preferred changes to best support consumers as they purchase airline tickets.
“Travel Tech appreciates Congressional leaders for their hard work to get this critical legislation across the line,” said Travel Tech President & CEO, Laura Chadwick. “It is now critical that this bill is finalized in a way that gives travelers the transparency and choice they deserve.”
Travel Tech’s priorities for the final FAA Reauthorization bill include:
Ticket Agents are the largest travel industry segment not represented on this key advisory committee. Allowing them to become members will provide valuable insights currently not reflected in the committee, helping the Department of Transportation meet its consumer protection mission.
Sec. 702 of the Senate bill directs the Secretary of Transportation to issue a final rule to apply refund requirements to Ticket Agents in the case of canceled or significantly delayed flights. However, Ticket Agents are not in a fiscal position to provide refunds without first receiving the passengers’ funds back from the airlines. The House bill clarifies this provision and should be fully adopted.
Section 702 of S. 1939 requires Ticket Agents to prominently display on their websites a link that passengers eligible for a refund may use to make a request. However, because many Online Travel Agents offer services beyond airfare comparison shopping and booking on their sites, these links will likely cause confusion among consumers seeking refunds for hotels, car rentals, or other services. Furthermore, Travel Management Companies that do not sell to the public already have specific refund obligations under their contracts. Finally, metasearch engines that direct customers to other sites have no record of which flight a customer ultimately purchased and should be similarly exempt.
The Full Fare Advertising Rule requires that the entire price for airfare, including taxes and fees, be disclosed to consumers in the first instance following an itinerary search. Its repeal will undermine consumers’ ability to effectively comparison shop and choose the best travel option to meet their needs and budget.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
Association Puts Forth Recommendations to the Senate That Reflect Ticket Agents’ Role in the Travel Marketplace
February 8, 2024 – The Travel Technology Association (Travel Tech) submitted a letter to the Senate Committee on Commerce, Science, & Transportation concerning S. 1939, the FAA Reauthorization Act of 2023. The letter provides recommendations for the committee to consider ahead of the bill’s markup, including:
“We urge the Committee to adopt our recommendations to support travelers and the Travel Tech member companies that serve them,” said Laura Chadwick, President and CEO of Travel Tech.
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy that promotes marketplace transparency and competition. Travel Tech represents travel technology innovators ranging from dynamic startups, small, and midsize businesses to leading online travel agencies, metasearch engines, short-term rental platforms, global distribution systems, and travel management companies.
To schedule an interview with a Travel Tech spokesperson, contact Bradford Williamson of Glen Echo Group at 202.870.3234 or bwilliamson@glenechogroup.com.
Ahead of the return of Congress to Washington, D.C. next week, Travel Tech has met with U.S. Senate offices to discuss the airline refund obligations of ticket agents. Late last year, the U.S. Department of Transportation (DOT), in its proposed Airline Ticket Refunds and Consumer Protections rulemaking, sought to require ticket agents to refund customers within seven days, even if the airline had not yet returned the funds.
Travel Tech successfully advocated for bill language included in the U.S. House of Representatives-passed FAA Reauthorization that would require a refund only when such ticket agent possesses, or has access to, the funds of a passenger.
“Simply put: our members can only refund what they have in their possession. The DOT’s proposed rule on the timing of refunds places ticket agents in a precarious financial position, no matter their size, having to make refunds without first receiving the customers’ funds back from airlines,” said Laura Chadwick, president & CEO of Travel Tech.
“We were pleased the House Transportation and Infrastructure Committee heard us and included this sensible provision in their bill,” Chadwick continued. “We are continuing our efforts to secure a similar provision in the U.S. Senate’s FAA Reauthorization.”
As it stands today, the authorization for the Federal Aviation Administration (FAA) will expire on September 30, 2023. The Senate Commerce, Science and Transportation Committee has not yet considered or cleared its FAA Reauthorization legislation due to an ongoing impasse over pilot training requirements.
Travel Tech president and CEO Laura Chadwick testified at the DOT’s Public Hearing today on Airline Ticket Refunds and Consumer Protections. Her remarks are below:
Thank you for the opportunity to speak today on the Department of Transportation’s (DOT) Notice of Proposed Rulemaking (NPRM) on “Airline Ticket Refunds and Consumer Protections.”
My name is Laura Chadwick and I lead the Travel Technology Association. Travel Tech is the voice of the travel technology industry, advocating for public policy that promotes transparency and competition in the marketplace to encourage innovation and preserve consumer choice. Travel Tech represents the leading innovators in travel technology, including global distribution systems, online travel agencies and metasearch companies, travel management companies, and short-term rental platforms.
As we wrote in our comments, Travel Tech welcomes the Department’s decision to define what constitutes a ‘canceled flight’ and ‘significant change to flight itinerary.’ These definitions will bring much-needed uniformity and clarity to what have been fraught and stressful experiences for travelers facing weather or airline staffing issues. Great customer service, whether before, during, or after a trip, is key to the value Travel Tech members offer. These definitions will help online travel agents better support their customers in navigating frustrating flight cancellations and the labyrinth of airline customer service systems.
With regard to the question at hand — how to determine whether a downgrade of amenities or travel experiences qualifies as a “significant change of flight itinerary,” I must note that Travel Tech did not in its comments address this particular point. We are, however, and as I noted previously, very supportive of the DOT’s efforts to provide uniformity and clarity over what triggers a refund. This helps ticket agents help their customers. That being said, we do find merit in the issues raised by the airlines in their comments and at this hearing over the inherent difficulty in determining whether a downgrade of amenities or travel experiences constitutes a “significant change of flight itinerary.”
Ticket agents rely on the airlines to make refunds or credit determinations. Ticket agents, in essence, enforce airlines’ decisions on these matters. As such, confusion over what a downgrade of amenities or travel experiences qualifies as a “significant change of flight itinerary” by airlines will likewise create confusion for ticket agents in explaining these determinations to customers.
I do also want to take a moment to address Travel Tech’s concerns about the change included in the proposed rule regarding the timing of refunds to customers by ticket agents. In its draft rule, the Department proposes that customers receive refunds within seven days. However, it takes up to eleven days for ticket agents to secure refunds from airlines’ payment and refund systems.
To require refunds before the funds are returned by the airline – as the proposed rule currently demands – would impose an undue financial burden and risk on ticket agents. We encourage the Department to revise this part of its proposal to reflect that airlines’ payment and refund systems are beyond the control of ticket agents.
###
About Travel Tech
The Travel Technology Association (Travel Tech) empowers traveler choice by advocating for public policy promoting marketplace transparency and competition. Travel Tech represents the leading innovators in travel technology, including global distribution systems, online travel agencies, metasearch companies, travel management companies, and short-term rental platforms.
To schedule an interview with a Travel Tech spokesperson, contact Dan Rene of kglobal at 202-329-8357 or daniel.rene@kglobal.com.
Tax has a disproportionate and outsized impact on travel tech industry July 24, 2024 – Today, Travel Tech sent a formal letter to Ambassador Katherine Tai, the United States Trade Representative, strongly urging the Biden Administration to take decisive action in response to Canada’s newly implemented digital services tax (DST), given its outsized impact on […]
