United CEO, airline execs face latest group of unhappy customers: Congress

Legislators who grilled executives from some of the nation's largest airlines Tuesday — an event precipitated by United Airlines' passenger-dragging incident last month — sounded like any other group of aggrieved passengers wondering why flying so often seems so unpleasant.

They complained about canceled flights and checked bag fees. They questioned why some airlines charge hefty change fees and others do not. They bemoaned airlines' practice of selling more tickets than there are seats on planes.

The difference between them and the general flying public: Congress has the power to force change through industry regulation, and legislators warned they may use that power if airlines don't deliver on promises made in the past three weeks.

"If we don't see meaningful results that improve customer service, the next time this committee meets to address the issue, I can assure you, you won't like the outcome," said Bill Shuster, R-Pa., chairman of the U.S. House Transportation and Infrastructure Committee.

United Airlines CEO Oscar Munoz apologized multiple times during the 41/2 -hour hearing for the treatment of Dr. David Dao, the passenger dragged from a plane April 9 after refusing to give up his seat to make room for airline employees. At one point, Munoz called the incident "a mistake of epic proportions."

Munoz wasn't the only one acknowledging bad behavior and promising to do better.

American Airlines also is making changes after an incident last month when a flight attendant was filmed arguing with passengers after reportedly yanking a stroller from a mother holding her baby, said Kerry Philipovitch, senior vice president of customer experience.

"Clearly what happened was wrong," she said.

But legislators' questions ranged far beyond the specific issues that contributed to problems on those flights, with some arguing the incidents and widespread consumer outrage point to bigger problems between airlines and their customers.

"Something is broken, and the obvious divide between passengers and the airlines needs to be addressed," Shuster said.

No specific potential regulations were discussed at Tuesday's hearing, but Rep. Peter DeFazio, D-Ore., and Rep. Rick Larsen, D-Wash., said they planned to ask the Government Accountability Office for a study of "what more Congress and the (Transportation Department) can do to remedy what's gone wrong with the airline system."

Rep. Jan Schakowsky, D-Evanston, last month introduced legislation that would prohibit airlines from involuntarily bumping passengers from oversold flights to make room for other passengers and instead require they offer enough compensation to recruit volunteers.

In the Senate, a bill introduced last week would bar airlines from bumping passengers once on board unless they pose a safety, security or health risk; eliminate limits on the amount of compensation airlines must offer customers bumped against their will; and direct the transportation secretary to consider limiting the number of seats airlines can overbook.

The airline industry says it's already struggling with too many regulations, and executives at the hearing — including Munoz, United President Scott Kirby, Philipovitch and representatives from Southwest Airlines and Alaska Airlines — said there's no need for more.

But some legislators pushed airlines to justify practices that boost airlines' bottom lines but top frequent flyers' list of complaints, from overbooking to fees for checking bags and changing flights, though those issues had little to do with either the United or American incidents.

Consumers Union aviation consultant William McGee argued that consolidation in the airline industry and lack of competition encouraged airlines to put profits ahead of consumers' interests.

Airlines' contracts of carriage — documents outlining what buying a ticket does and does not guarantee a passenger — "protect the airline, not the passenger," McGee said. He advocated for a consistent statement of passengers' rights that would prohibit bumping ticketed passengers against their will, more transparency about fees and minimum standards for seat space.

Airlines said the overwhelming majority of passengers who get bumped volunteer to relinquish their seats, but they are working to shrink the number of customers told they have to take a later flight.

Both United and American said they will not bump already seated passengers from a flight to make room for other passengers, whether customers or employees. United has also pledged to reduce overbooking but won't stop altogether.

United and American both defended overbooking as a practice that helps airlines fly more passengers at cheaper rates. When United has to bump passengers and can't get volunteers, it's usually not because of overbooking but due to operational issues such as mechanical problems or bad weather that forced a plane to fly with fewer passengers or required a switch to a smaller aircraft, Kirby said.

Only Southwest said it planned to stop overbooking altogether. The airline doesn't see as many no-shows as it once did and is upgrading systems that will help it better predict how many customers will show up, Executive Vice President and Chief Commercial Officer Bob Jordan told legislators.

Last year Southwest was more likely than Delta, United or American to bump a passenger who hadn't volunteered for a later flight, according to Transportation Department data. But Jordan said he expects that without overbooking, the number of bumped passengers will drop about 80 percent.

DeFazio asked United and American how much it cost to change a customer's flight, arguing that when they couldn't offer a value, that change fees are "about operations and profit."

American brought in nearly $900 million from fees associated with flight cancellations and changes last year, according to the Bureau of Transportation Statistics. Delta and United brought in about $835 million and $742 million, respectively.

Legislators also quizzed airlines on how they decide which passengers to bump to later flights, when necessary.

United chooses passengers who paid the lowest fares and aren't in the airline's frequent flyer program, Munoz said. Southwest and Alaska said their airlines bump the last person to check in.

On Thursday, United will likely face similar questions from the U.S. Senate Subcommittee on Aviation Operations, Safety and Security. Kirby and Chicago Department of Aviation Commissioner Ginger Evans are both expected to testify at a hearing on consumer protection in the airline industry.

Rep. Michael Capuano, D-Mass., said he thinks United did a good job addressing the specific issues that turned the decision to bump Dao into a physical confrontation. But if airlines think that's the only part of the flying experience that needs addressing, "you missed the point," he said.

Munoz vowed his airline has learned from the passenger-dragging incident and subsequent fallout. "At least from United's perspective, this will make us better," he said.

lzumbach@chicagotribune.com

Twitter @laurenzumbach

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