Five Airlines Took the Wrong Track by Quintupling Prices Following Amtrak Crash
July 28, 2015
It wasn't price gouging, it was "surge pricing" insist the airlines.
Five airlines are being investigated by the federal government over allegations they raised airfares in the Northeast as desperate travelers flocked their way after the deadly May 12 Amtrak crash in Philadelphia.
Travelers reported airfares as high as $2,300 between New York and DC following the May 12 Amtrak crash that left the busy rail corridor paralyzed for a week prompting an investigation by the Department of Transportation.
That $2,300 ticket is more than five times what that same flight costs on average, even if booked at the last minute.
United Airlines CEO Jeff Smisek spoke at a May 19 Senate hearing claiming travelers faced last-minute airfares, which are generally higher than flights booked in advance.
"We would never take advantage of an opportunity like that, if you viewed it as an opportunity," Smisek said.
But Sen. Chris Murphy (D-CT) disagreed and demanded a DOT investigation after reports of airfare spikes following the crash.
Last week the DOT sent letters to Delta, American, United, Southwest and JetBlue asking each to detail average fares along the route before, during, and afterthe crash.
The letter demanded an explanation for price increases and asked the airlines whether they communicated with each other about those fares, which might signal collusion.
Paul Hudson, president of FlyersRights said, "Hotels can't charge $500 for a $100 room or gas stations $40 for a gallon of gas after a natural or man-made disaster. State laws prohibit such price gouging - some with criminal penalties."
"We would never take advantage of an opportunity like that, if you viewed it as an opportunity," said Jeff Smisek CEO of United Airlines
"Only airlines are exempt from all state laws with the federal DOT as sole regulator. DOT Secretary Foxx should order refunds and fines. This outrageous conduct also merits Congressional action to prohibit future airline price gouging." Hudson said.
This is the second government investigation into airline price collusion within a month.
In early July the Justice Department alleged Southwest Airlines, American Airlines, Delta Air Lines and United Airlines were engaged in price-fixing and colluding to restrain seat capacity to push airfares higher.
We Have Regulation In This Country Because Of Abuse Like This
Agree with them or not, there are price gouging laws in this country that attempt to prevent profit from crisis situations. Airlines need to follow the law, just like every other company.
As FlyersRights pointed out recently, we're fast approaching a tipping point with regards to air travel. It'll end with either new regulations for US airlines on how their operations are conducted, or it will end with consumer rebellion.
The bottom line is these airlines saw an opportunity to make huge amounts of money off the Amtrak crash and they took advantage of it. Whether or not they'll get charged remains to be seen.
Add to these investigations the continuing assessment of "fuel" surcharges, despite the cost of fuel being at the lowest price its been in over a decade. Charging passengers this fee is a travesty and represents price gouging as well.
It is time that the Federal Trade Commission's Bureau of Consumer Protection, or even the Interstate Commerce Commission, take action if the Department of Transportation won't.
I am frankly concerned re UAL. I get good (actually great) treatment, but I don't fly as much as I used to but you can see the things you mentioned when you are in the ticket/gate/boarding areas. You can also see the employees are not happy and are "just going through the motions" - not good if you are responsible for someone's life and a complicated machine like an airplane.
The lack of "backup" for personnel or planes is very concerning.
Don't blame legacy United for how United is being run...all legacy United management left years ago. Continental upper management has been calling the shots to the bottom for years. CEO/President/Chairman of the Board Smisek, a Continental lawyer, has been at the helm since Glen Tilton left.
I am only one person but I think US flyers should start a moo campaign. It is simple. Every time airlines treat us as cattle we say MOO. when asked what did you say we respond politely,
"when we are treated as cattle we respond as cattle" My guess is that if enough of us did this and it gained national media, the airlines would respond. Think of a whole mooing airport.
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We are commited to solutions for promoting airline passenger policies that forward first and foremost the safety of all passengers while not imposing unrealistic economic burdens that adversely affect airline profitability or create exhorbitant ticket price increases.
All American air carriers shall abide by the following standards to ensure the safety, security and comfort of their passengers:
Establish procedures to respond to all passenger complaints within 24 hours and with appropriate resolution within 2 weeks.
Notify passengers within ten minutes of a delay of known diversions, delays and cancellations via airport overhead announcement, on aircraft announcement, and posting on airport television monitors.
Establish procedures for returning passengers to terminal gate when delays occur so that no plane sits on the tarmac for longer than three hours without connecting to a gate.
Provide for the essential needs of passengers during air- or ground-based delays of longer than 3 hours, including food, water, sanitary facilities, and access to medical attention.
Provide for the needs of disabled, elderly and special needs passengers by establishing procedures for assisting with the moving and retrieving of baggage, and the moving of passengers from one area of airport to another at all times by airline personnel.
Publish and update monthly on the company’s public web site a list of chronically delayed flights, meaning those flight delayed thirty minutes or more, at least forty percent of the time, during a single month.
Compensate “bumped” passengers or passengers delayed due to flight cancellations or postponements of over 12 hours by refund of 150% of ticket price.
The formal implementation of a Passenger Review Committee, made up of non-airline executives and employees but rather passengers and consumers – that would have the formal ability to review and investigate complaints.
Make lowest fare information, schedules and itineraries, cancellation policies and frequent flyer program requirements available in an easily accessed location and updated in real-time.
Ensure that baggage is handled without delay or injury; if baggage is lost or misplaced, the airline shall notify customer of baggage status within 12 hours and provide compensation equal to current market value of baggage and its contents.
Require that these rights apply equally to all airline code-share partners including international partners.