SPEAKERS CONTENTS INSERTS
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74–378 PS
2001
AIRLINE CUSTOMER SERVICE COMMITMENTS: STATUS REPORT
(107–26)
HEARING
BEFORE THE
SUBCOMMITTEE ON
AVIATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
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HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
JUNE 20, 2001
Printed for the use of the
Committee on Transportation and Infrastructure
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DON YOUNG, Alaska, Chairman
THOMAS E. PETRI, Wisconsin, Vice-Chair
SHERWOOD L. BOEHLERT, New York
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
WAYNE T. GILCHREST, Maryland
STEPHEN HORN, California
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JOHN L. MICA, Florida
JACK QUINN, New York
VERNON J. EHLERS, Michigan
SPENCER BACHUS, Alabama
STEVEN C. LaTOURETTE, Ohio
SUE W. KELLY, New York
RICHARD H. BAKER, Louisiana
ROBERT W. NEY, Ohio
JOHN COOKSEY, Louisiana
JOHN R. THUNE, South Dakota
FRANK A. LoBIONDO, New Jersey
JERRY MORAN, Kansas
RICHARD W. POMBO, California
JIM DeMINT, South Carolina
DOUG BEREUTER, Nebraska
MICHAEL K. SIMPSON, Idaho
JOHNNY ISAKSON, Georgia
ROBIN HAYES, North Carolina
ROB SIMMONS, Connecticut
MIKE ROGERS, Michigan
SHELLEY MOORE CAPITO, West Virginia
MARK STEVEN KIRK, Illinois
HENRY E, BROWN, Jr., South Carolina
TIMOTHY V. JOHNSON, Illinois
BRIAN D. KERNS, Indiana
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DENNIS R. REHBERG, Montana
TODD RUSSELL PLATTS, Pennsylvania
MIKE FERGUSON, New Jersey
SAM GRAVES, Missouri
C.L. (BUTCH) OTTER, Idaho
MARK R. KENNEDY, Minnesota
JOHN ABNEY CULBERSON, Texas
BILL SHUSTER, Pennsylvania
JOHN BOOZMAN, Arkansas
JAMES L. OBERSTAR, Minnesota
NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
WILLIAM O. LIPINSKI, Illinois
PETER A. DeFAZIO, Oregon
BOB CLEMENT, Tennessee
JERRY F. COSTELLO, Illinois
ELEANOR HOLMES NORTON, District of Columbia
JERROLD NADLER, New York
ROBERT MENENDEZ, New Jersey
CORRINE BROWN, Florida
JAMES A. BARCIA, Michigan
BOB FILNER, California
EDDIE BERNICE JOHNSON, Texas
FRANK MASCARA, Pennsylvania
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GENE TAYLOR, Mississippi
JUANITA MILLENDER-McDONALD, California
ELIJAH E. CUMMINGS, Maryland
EARL BLUMENAUER, Oregon
MAX SANDLIN, Texas
ELLEN O. TAUSCHER, California
BILL PASCRELL, JR., New Jersey
LEONARD L. BOSWELL, Iowa
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania
NICK LAMPSON, Texas
JOHN ELIAS BALDACCI, Maine
MARION BERRY, Arkansas
BRIAN BAIRD, Washington
SHELLEY BERKLEY, Nevada
BRAD CARSON, Oklahoma
JIM MATHESON, Utah
MICHAEL M. HONDA, California
RICK LARSEN, Washington
(ii)
SUBCOMMITTEE ON AVIATION
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JOHN L. MICA, Florida, Chairman
THOMAS E. PETRI, Wisconsin
JOHN J. DUNCAN, Jr., Tennessee
STEPHEN HORN, California
JACK QUINN, New York
VERNON J. EHLERS, Michigan
SPENCER BACHUS, Alabama
SUE W. KELLY, New York
RICHARD H. BAKER, Louisiana
JOHN COOKSEY, Louisiana, Vice Chairman
JOHN R. THUNE, South Dakota
FRANK A. LoBIONDO, New Jersey
JERRY MORAN, Kansas
MICHAEL K. SIMPSON, Idaho
JOHNNY ISAKSON, Georgia
ROBIN HAYES, North Carolina
MARK STEVEN KIRK, Illinois
TIMOTHY V. JOHNSON, Illinois
DENNIS R. REHBERG, Montana
SAM GRAVES, Missouri
MARK R. KENNEDY, Minnesota
JOHN ABNEY CULBERSON, Texas
BUD SHUSTER, Pennsylvania
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JOHN BOOZMAN, Arkansas
DON YOUNG, Alaska
(Ex Officio)
WILLIAM O. LIPINSKI, Illinois
ELEANOR HOLMES NORTON, District of Columbia
EDDIE BERNICE JOHNSON, Texas
LEONARD L. BOSWELL, Iowa
JOHN ELIAS BALDACCI, Maine
PETER A. DeFAZIO, Oregon
JERRY F. COSTELLO, Illinois
ROBERT MENENDEZ, New Jersey
CORRINE BROWN, Florida
JUANITA MILLENDER-McDONALD, California
MAX SANDLIN, Texas
ELLEN O. TAUSCHER, California
BILL PASCRELL, JR., New Jersey
TIM HOLDEN, Pennsylvania
NICK LAMPSON, Texas
SHELLEY BERKLEY, Nevada
BRAD CARSON, Oklahoma
JIM MATHESON, Utah
MICHAEL M. HONDA, California
NICK J. RAHALL II, West Virginia
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JAMES L. OBERSTAR, Minnesota
(Ex Officio)
(iii)
CONTENTS
TESTIMONY
Carty, Donald J., Chairman, President and Chief Executive Officer, American Airlines, accompanied by Brad Aspgren, Manager Airport Automation
Hallett, Carol B., President and CEO, Air Transport Association of America
Mead, Kenneth M., Inspector General, U.S. Department of Transportation, accompanied by Robin Hunt, San Francisco, CA
Zander, Glenn R., President and CEO, Aloha Airlines, Inc.
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Costello, Hon. Jerry F., of Illinois
Millender-McDonald, Hon. Juanita, of California
Oberstar, Hon. James L., of Minnesota
PREPARED STATEMENTS SUBMITTED BY WITNESSES
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Carty, Donald J
Hallett, Carol B
Mead, Kenneth M
Zander, Glenn R
ADDITIONS TO THE RECORD
Exchange of letters between Hon. John L. Mica, Chairman, Subcommittee on Aviation, June 20, 2001, and Hon. Norman Y. Mineta, Secretary of Transportation, August 3, 2001
Northwest Airlines, Inc., Andrea Fischer Newman, letter and attachment, June 20, 2001
Southwest Airlines, statement and attachments
Airline Actions to Reduce Delays
Inspector General Statistics on Cancellations
Passenger Letters
AIRLINE CUSTOMER SERVICE COMMITMENTS: STATUS REPORT
Wednesday, June 20, 2001
House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Aviation, Washington, D.C.
The subcommittee met, pursuant to call, at 1:00 p.m. in room 2167, Rayburn House Office Building, Hon. John L. Mica [chairman of the subcommittee] presiding.
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Mr. MICA. Good afternoon. I'd like to call this hearing of the House Aviation Subcommittee to order. The order of business today is a hearing, and the hearing is entitled Airline Customer Service Commitments.
We have two panels to hear from, and we're going to go ahead in regular order and have opening statements. I'll open with my statement then we'll yield to other members.
For the past few months, I've been attempting, and the Subcommittee has, and the Committee, to work with our airlines to try to improve airline customer service. Passenger service unfortunately has been getting a lot of publicity since 1999, when bad weather, congestion and labor problems caused a dramatic increase in passenger complaints and particularly about customer service.
But there's an interesting fact, indeed, that passenger complaints to DOT are in fact no higher now than they were before airline deregulation. This is despite a more than doubling in the number of passengers and greater ease in filing complaints through e-mail.
Also, the latest information I have is that the number of delays are in fact down. The number of flights delayed for more than 30 minutes was down 30 percent from January this year to April, compared to the same period last year. There's even some good news on the length of delay, it decreased from 52 minutes to 48 minutes. The percentage of flights delayed, however, stayed about the same. That's about 21 percent.
However, it's clear that many passengers are demanding more from the airlines. To their credit, I want to say that working with ATA and the major airlines and some of the other members, I believe that they've stepped up to the plate and have attempted to correct some of the problems that have been apparent.
Two years ago, the airlines unveiled 12 customer service commitments designed to improve the air travel experience. The Inspector General performed a very exhaustive analysis of airline implementation of these commitments. On the whole, the IG gave the airlines some pretty good marks. However, the Inspector General did in fact make several recommendations. I think one of the most significant recommendations was that the voluntary commitments be included in the airlines' contract carriage, the agreement between the airline and the passenger. This in fact would make these commitments legally binding.
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Earlier this month, I was pleased to announce that the airlines have in fact positively responded to that recommendation. They now have included in their commitments a provision that they will in fact be part of their contract of carriage, that legally binding document. They've also gone beyond that and they've made additional customer service commitments. These are summarized in a briefing memo that I've prepared that should be before each member of the subcommittee and available for your review.
In addition, many airlines have spent millions of dollars investing in new technologies to help speed passengers through the airport and keep them better informed when things go wrong. These initiatives are displayed on the chart across the room, we've got the chart up here on these screens and also on the big screen in front of us.
I've met with the airlines on a number of occasions and discussed going beyond the 12 commitments. I'm very pleased with their individual responses. You also see some of the additional airline service initiatives that each of them have undertaken.
I know that some members of Congress would prefer a legislative remedy. However, given the variety of airlines, major carriers, we have small carriers, discount carriers, regional carriers, I think it's very difficult to come up with a legislative solution that in fact would provide a mechanism that was one size, in fact, that fits all of their particular situations.
Furthermore, we may inadvertently penalize small carriers and also, I think, we could in fact drive up ticket prices for some of the discount or bargain carriers. However, I would like to see the Department of Transportation, particularly the general counsel in the Consumer Protection Office become more involved in this issue.
Therefore today, and I think they should be at your place, I've written to Secretary Mineta urging that the DOT counsel monitor the airlines' actions to ensure that they in fact live up to the commitments that they've made to us, and also to their passengers in their contract of carriage.
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Finally, let me say that even a simple analysis of the source of air service problems reveals that in fact, delays initiate the chain that leads to air passenger complaints. Delays because of bad weather, labor disputes or an inadequately modern air traffic control system in fact are what trigger most of the chaos. Until Congress and the FAA take additional steps to modernize our air traffic control systems' capability to better deal with weather and also air space utilization, all of which are Federal programs and all of which are grossly behind schedule and over budget, in fact delays, I believe, will continue.
Also, until local and State governments and the NIMBY crowd, the Not In My Back Yard crowd, consent to build runways or infrastructure, particularly in our eight most congested airports, delays will in fact continue. Flights will continue to be missed, baggage misconnected, business meetings, weddings and graduations missed, and in fact, tempers will continue to flare. So before blindly bashing the airlines, I think it's appropriate for a little bit of Congressional introspection today.
Today I'm pleased we're going to hear from the Air Transport Association. We've also asked one of the larger carriers to provide testimony, American Airlines, who will be represented in that category, and a smaller airline, Aloha, will represent one of the smaller carriers, as well as hearing from the Inspector General. This will in fact give all members of the Subcommittee an opportunity to judge for themselves the steps that have been taken by these carriers to help remedy passenger dissatisfaction.
With that opening comment, I'm pleased to yield to our distinguished Ranking Member, Mr. Lipinski.
Mr. LIPINSKI. Thank you very much, Mr. Chairman. And Mr. Chairman, I thank you for holding this hearing today to highlight the status of the airlines' voluntary customer service commitments.
Mr. Chairman, I want to commend you for all the hard work and attention you have personally devoted to this issue. In March, you convened a meeting with the customer service representatives of each major airline and asked what customer service improvements they were willing to commit to, what areas they were willing to work harder to improve, and perhaps most importantly, when they were willing to implement their commitments. In May, you convened a follow-up meeting to check the status of the airlines' customer service commitments and to keep the pressure on the airlines.
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Again, Mr. Chairman, I commend you for the tremendous effort that you have put into this project. Your tenacity in putting pressure on the airlines to voluntarily improve their customer service has produced some real results. I look forward to continuing to work with you on monitoring the airlines' voluntary commitments.
However, despite your tremendous effort in this area, I still have some reservations about whether a completely voluntary commitment by the airlines is the best way to ensure improved airline customer service. Despite the progress that has been made, there are still some major areas where the airlines are not meeting their commitments to improve customer service as we will learn today from the DOT Inspector General.
In addition, I have some real concerns about how these voluntary commitments will be enforced, especially once the pressure from Congress subsides. I have great reservations about forcing an individual customer to sue a major airline if that airline violates its customer service commitment. I do not believe it's a realistic or effective enforcement mechanism.
Therefore, it may be that Congress will still need to legislative enforceable airline customer service standards. Although we are not at that stage today, it is nevertheless still a possibility. Mr. Chairman, I look forward to hearing from the witnesses here today, and once again, I want to sincerely compliment you on the tremendous effort you have put into this. I don't think I have run across any chairman of this Committee who has spent as much time and as much energy on one particular issue as you have, and I thank you on behalf of the American flying public for doing that.
Mr. MICA. Thank you, Mr. Lipinski.
Do we have additional opening statements, any of the members of this side? The gentleman from Oregon, you're recognized.
Mr. DEFAZIO. Thank you, Mr. Chairman.
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Mr. Chairman, I can take a little different approach here. I note you said complaints were down, but I'd also note that during the hearings about the people who were trapped on Northwest for 10 to 12 hours without food and water in the incident in Detroit, one of the people who testified said it took her about a month and more than $100 worth of toll calls before she figured out that there might be someone somewhere at the Department of Transportation who would take her complaint.
There is no toll-free number at the Department of Transportation. When I once asked about them having a toll-free number, the person then in charge of that office told me, oh, my God, no, we'd be overwhelmed with complaints. We couldn't do it. So the airlines don't publish a complaint number, DOT doesn't publish a complaint number. Yes, a lot of people don't complain. They call my office. And there are more people calling my office today than have called my office in many years. So I don't think complaints are down.
And to say that this is some great accomplishment, let me just run through some of the 12 points. The one that just sort of intrigues me, it's kind of fun, is that they promise if your bags are lost that they'll try and return the bags to you within 24 hours. I wonder what they did before? I'm curious about that, but that's great that they're going to try and do that. And I wonder how one would go to court to try to get that rule enforced. They say they're going to try to do something that can be enforced, but people can't go to court to get that enforced.
The airlines tout the increase in liability for lost baggage. Of course, that is required under Federal law. But I would note under every one of these things, every one of these airlines, every single one could compete. Some airline could say, you know, we're really concerned about you as passengers, we're going to offer you $10,000 if we lose your bag or don't deliver it in 24 hours. But somehow, that never happens. We set a minimum, and the minimum is the maximum with the Federal Government's rules.
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That's a question that occurs through all of these things. They're touting that they will follow the Federal law on baggage, they will follow the Federal law when it comes to the ADA and the 1986 Air Carrier Access Act. That's great. That law has been on the books 15 years, they're going to follow that law. But that is one of the points that they have delivered here for disabled passengers.
There's one commitment I did find out about where the airlines weren't following the law and I didn't know about it, but I will insist on it in the future. That commitment is prompt ticket refunds. I've waited up to 45 days for refunds from my favorite large, very large airline. I didn't know they were violating the law, but now I do, and I will insist on a more prompt refund. I just thought I had to deal with their bureaucracy and it would take 45, 60 days sometimes.
But the one that really gets to me is bumping. I've heard a lot of complaints from constituents lately about bumping. We all know the airlines are flying a lot more full. They have a lot less capacity and they're bumping people, because they still insist that people should be able to change their mind at the last minute with a full fare ticket, not come, not tell them and not be penalized in any way. The people who have cheaper tickets are bumped from that flight.
Well, you know, this is another area where they could compete. They are petitioning to increase the 1985 standard of a maximum of $400, and I'll tell you, for a lot of people missing a day of their vacation is worth a heck of a lot more than $400. They are petitioning in what we know is an extraordinarily lengthy process, the FAA to raise that amount. That's one of the things they're doing here. Well, why don't they just do it? Why don't the airlines just do it? Why don't they compete? Why don't they run ads saying, if we bump you from a flight, we're going to give you $5,000. We'll send you on another vacation to make up for the days you missed.
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This would be a wonderful area for competition. There is no competition down there. They're going to petition and they know in 2 or 5 or 10 or 15 years, however long it takes, FAA will probably raise the amount to $500, maybe $600, which at that time still won't pay most people for one day's lost vacation and the inconvenience and the problems that I'm hearing about from my constituents.
So I do not look upon this as some grand victory for consumers. I introduced my first enforceable passenger rights bill before this Committee in 1987. I'm still fighting, I'm still waiting. We almost got one two years ago, and to sit here today and say everything's fine and it's the problems with the ATC is absurd, and the American traveling public knows that. I fly a lot, the rest of us fly a lot, and we all know that. They can do a lot better, and they could be competing in a whole bunch of areas where there is no competition.
Thank you, Mr. Chairman.
Mr. MICA. I thank the gentleman. Ms. Kelly, the gentlelady from New York.
Ms. KELLY. Thank you, Mr. Chairman.
I notice here on the chart that you have, saying delays concentrated at certain airports, LaGuardia wins. I think that's one race New York would rather not win.
I'm very interested that the airlines are saying they're taking steps to improve their service. I want to agree with my colleague on the Democratic side who just said, we fly a lot. We do. We know what's happening out there in the airports, because we're treated like every other customer that you have. So we actually know whether or not there are things, people on the ground to help us get through those many sticky wickets that you have to get through to get to the gates.
I agree that there's a lot of passenger frustration that can be attributed to fundamental flaws in the current system. We need to improve airport capacity, we need to modernize air traffic control systems. And we need to do it soon, sooner rather than later. But I've been a supporter of passenger rights legislation because I think we need to keep the pressure on the airlines. It's because of the fact that we have had these bills that I believe the airlines are finally taking a good look at what the passengers are talking about, and they are trying to do something about.
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I'm not sure that voluntary commitments that we've talked about today so far, if they would have been made, if the specter of legislation hadn't been held over the airlines. I think that's unfortunate.
I want to compliment a couple of the airlines, as I'm reading the slides that are being flashed up here, especially Northwest and Midwest Express and American for adding leg room and increasing the overhead bins. So many of us travel with roll-ons. If we have the space, we can get on those airplanes, we can load much faster, we can get our things up into the overhead bins if there's space. And I appreciate the fact that you've done that.
I really am very thankful that Alaska Airlines and Aloha and Continental have done the same thing. And American, I want to thank you for the increased leg room. Thank you very much, Mr. Chairman.
Mr. MICA. I thank the gentlelady from New York. I'll also announce to the members of the Subcommittee, since we're talking about New York and we have three of the major delay airports on the chart, Kennedy, Newark and LaGuardia, which probably account for 40 percent of our delays, the Subcommittee will be holding a hearing in New York City at the Port Authority offices, I believe that's at the World Trade Center, on Monday July 16th at 9:30 a.m. I invite the members of the Subcommittee to participate. I'll also put the New York members on notice.
Let me recognize the gentleman from the adjacent State of New Jersey and also home of Newark, Mr. Menendez.
Mr. MENENDEZ. Thank you, Mr. Chairman. And thank you for holding this hearing.
I think people have a right to be treated like customers, not cattle, when they deal with an airline or step into an airplane. Unfortunately it's clear in many surveys that certainly, by many of my constituents who speak to me and a lot of the traveling that I personally do, that more often than not, passengers get excuses instead of service. I hope I don't need to tell those of you here that a good deal of the flying public clearly is not satisfied with the voluntary plans you put into place last year. Of course, if you know your customers, you should know that already and that shouldn't be news to you.
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I also want to, however, join in some praise to some of the efforts that I think make a real difference, like American Airlines giving more leg room throughout coach, or Continental Airlines giving significantly more room to store carry-on luggage. Those are significant improvements, there are others. And these changes are proof that there are tangible steps that carriers can take to improve the flight experience, concrete actions, not unenforceable promises.
With that in mind, there are some in this Committee who have already staked out a position on the Passenger Bill of Rights. I have not. I have kept an open ear. But I must tell you that voluntary measures that don't get followed through increasingly create a public will for governmental action.
There's a lot of areas to review, but I don't have the time to go through them all. There is one that I want to specifically focus on, and I could do others. That's delayed luggage. If a business woman or man arrives at their destination without their luggage and is without it for several days, or even a single day, they're often forced to purchase everything, from toiletries to business suits to shoes.
I found myself in that situation, I recently went on a trip to visit the President of Mexico. I found myself without my luggage, I made the mistake of not bringing some type of a carry-on, because I trusted the airline. The result is that I went on a shopping spree in Mexico so that I could meet the president the next day, not in my jeans, but in my suit.
If a family arrives at their holiday destination without their luggage, their vacation may be ruined, with precious family time spent running around to purchase the holiday clothes they need. In each of these cases, it is the airline that lost the luggage. It is the airline who forced the travelers, through its carry-on policies or its lack of carry-on space, to check their luggage. It is the airline's responsibility for the luggage that is entrusted to them. And it's outrageous that under the current regulations, the airlines have no obligation to pay these travelers adequate compensation. That's simply wrong.
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If you delay the luggage and a traveler is forced to spend their time and money buying replacement items, I believe you should pay the costs that they incur, all of them. I now believe we need a minimum compensation level, increasing with each day a bag is delayed, whereby a passenger's submittal of costs, up to a Government-mandated amount, would not be questioned and would have to be honored. That should shift the burden from the traveler who entrusted their bags to you and who did nothing to delay them, where it belongs.
Now, you might complain that some passengers would abuse such a system. My response to you would be, you wouldn't have to worry about abuse of a system by passengers if you just wouldn't lose track of their luggage in the first place. And today it's you who I believe are abusing the system by failing to either adequately compensate customers time and again for the true costs they incur due to your negligence, or to having a system that is more efficient and will get them their baggage there on time.
So I would just simply say that my biggest complaint is that you as an industry often don't take adequate responsibility for the issues under your control. I know I met with the industry once, and before the Passengers Bill of Rights became the pressing issue, suggested that you all think about some voluntary response as an industry. Everybody said it was a good idea, you came to a hearing here about a Congress or so ago, and everybody else was responsible but you. It was air traffic delays, it was weather, it was capacity, and yes, those are all issues.
But not to take on responsibility, especially when those are uniquely within your control, is unacceptable. You can blame air traffic control and the lack of runways for some problems. But you can't blame them for over-booking your flights or losing or delaying someone's luggage. Those problems are your fault, and it's just not doing an adequate job to address them that exacerbates the circumstances.
So I hope to hear from the testimony today how we're going to continue to improve, how we're going to be responsive and responsible, particularly for that which we uniquely as an industry have the opportunity to be in full control of. And I'll look forward to hopefully having some better experiences in the days ahead.
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Thank you, Mr. Chairman.
Mr. MICA. I thank the gentleman, and recognize the gentleman from California, Mr. Horn.
Mr. HORN. Thank you, Mr. Chairman.
Just on an opening statement, I'd like to titillate you a little on that, and maybe you can answer it. I won't ask you a question, I'm just putting out something.
I have over a million and a half, going on two million, for American. I have no complaints about American Airlines. But what I do have complaints about are what are on all airlines, with baggage overhead that is stuffed in, the locks snap, things fall out. And I just wonder, what can we do about that? Can we build it from the bottom up? And I would like to hear what the airlines want to do on that.
Those things popping around, going over the Rockies or in some storm, all of our necks are going to be frankly crushed. I'd like, Mr. Chairman, to have the staff talk to the Department of Transportation and say, what kind of safety data has come from planes that have gone down under strained circumstances, but a lot of ups and downs in the weather, the clouds and all that. So I'd hope that the gentleman on the panel one would satisfy me a little that that's one way to protect your passengers. They're not any good when they're killed. But the baggage thing I think is a real problem.
Mr. MICA. I thank the gentleman. Further opening statements? Mr. Oberstar, Ranking Member of our Full Committee, you're recognized.
Mr. OBERSTAR. Thank you, Mr. Chairman, for holding this hearing and continuing to focus attention on these passenger service issues.
I've not supported passenger rights legislation in the past. As I said at the hearing I had of this Committee, the very first hearing on this subject, passenger concerns are matters that the private sector ought to address within the contract of carriage. But, if the airlines didn't address them, then Congress would. The pressure was building clearly in the last Congress. There was a window when, had we brought a bill to the Floor, as our former Chairman, Mr. Shuster, was intending to, it would have just swarmed through the House and through the Senate.
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But, the bill would have had a whole host of amendments that I feared would not advance the cause of passenger rights, but that would result in legislating down to the least details, including those that the gentleman from California just cited. I detest roll-on luggage that doesn't fit straight in, that has to be turned sideways and takes up a place for two passengers. I resent the passenger sitting in row 21 who drops his bag in row 10 and no flight attendant says, ''you can't do that.'' And I'd like to legislate that.
But I don't think that's right. I think that's something that the airlines themselves have to fix, backed up by the Office of Inspector General. And I'd pick up on a point that the gentleman from Oregon made. Compete. Out-do each other on passenger service issues, rather than simply follow one another to accomplish the least common denominator. I measure progress by how well the airlines are measuring up to the standards set by the Office of Inspector General. I think Mr. Mead, as the DOT Inspector General, has set some very high standards in analysis of the airlines' commitments. That is how we should measure this.
And I caution carriers not to deflect concerns about passenger service issues by pointing to the air traffic control system. Airlines all know better about what's happening and the advances that have been made in the technology of air traffic control. And if you really are about runway capacity, then I'd like to see each airline, in its hub or hubs communities, out there beating on the doors of airport neighbors to advocate for more runways. I have yet to see a case where a carrier has been in the lead in advocating for runway expansions, capacity. They leave it up to the airport to make that advocacy. If you really believe in the capacity question, take the lead, be in the forefront, be an advocate.
With those few thoughts, I'll look forward to the testimony, which I've already read.
Mr. MICA. The gentleman from Michigan, Mr. Ehlers.
Mr. EHLERS. Thank you, Mr. Chairman.
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I think I may be a little out of step here, but I'm reasonably happy with the airlines. I haven't lost any luggage or they haven't lost any of my luggage for about 10 years, over 15 years. Of course, I don't check luggage any more, I carry it on.
[Laughter.]
Mr. EHLERS. I have had very few delays, I get some, but very few I compared, I think to the average. That's because I look at the weather channel before every trip and decide on the best route for that particular day and I avoid the weather fronts.
The point is simply that I've learned to adapt as a frequent flyer. But the problem is that there are a good many Americans who are not frequent flyers and who are not exposed to the airlines very often. They're the ones who seem to complain the loudest.
But I can tell you one thing that really angers me, very much angers me, and that's when the airline personnel lie to me. I've flown long enough and know what the facts are generally, and I get very, very angry when they lie. It also bothers me when pilots blame the air traffic control. In some cases that's justified, but generally when it happens I check it out afterwards and find out that it was not air traffic control, it might have been the weather, it could have been something else. When it was the air traffic control, then I call the administrator of the FAA and say, you goofed, you've got a problem.
I think we ought to put the responsibility where it lies. But I think a real, what much of it boils down to is a public relations problem of not informing the consumers adequately, particularly for the infrequent flyers. I see that time and again, where insufficient information is given or inaccurate information is given. I think it's perfect fine to blame the weather. But what I would suggest, work with the airports, so that when you have a delayed flight, have the TV screen in that area, instead of running the same news over and over, show the weather pattern so the passengers can see precisely why they are delayed and where the weather is going and when they might be able to proceed.
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I would also help, try to educate the passengers about this. I would hand them little leaflets when there's a delayed flight. This is not expensive stuff I'm talking about, but it's good, solid, educational public information. And hand out leaflets explaining why the flight is delayed and you wouldn't have to have very many. Passengers would soon learn, it would soon catch on and I think they'd be much more patient, particularly if you emphasize that you are concerned and that you have considerable empathy for the passengers.
So I'm not here to castigate you, I'm just saying, you've got problems, I know why you've got problems. Some of them are weather, many of them are weather, some are limited capacity, some are air traffic control. But be honest about it, let the passengers know, and be sure to educate them so they really know what the reasons are, and I think they'll be much more tolerant than they have been in the last few years.
Thank you very much. I yield back.
Mr. MICA. If we have no further opening statements, I'd like to go ahead and proceed, if I may, with the first panel of witnesses. I think we're going to have a vote here in about 15, 20 minutes.
Ms. MILLENDER-MCDONALD. Mr. Chairman, may I just submit my testimony for the record?
Mr. MICA. Without objection, so ordered. And the record will be open for a period of two weeks for any additional statements.
Mr. MILLENDER-MCDONALD. Thank you, Mr. Chairman.
Mr. MICA. Let's go ahead and start with our first panel. We have today Ms. Carol Hallett, who's the President and CEO of the Air Transport Association. We also have Mr. Don Carty, and he's Chairman of American Airlines. I'd like to ask unanimous consent of the Subcommittee, we have another member, colleague with us, who'd like to introduce the third member of the panel. She is my former ranking member, the lovely and distinguished lady—is there objection?—she's going to introduce the third witness.
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Mrs. MINK. Thank you very much, Mr. Chairman, for the courtesy that the Committee is extending to me to introduce the third member of this panel. He is Glenn Zander, who is President and Chief Executive Officer of Aloha Airlines. It is my State's leading airline, and we in Hawaii, as you know, are separated by ocean. So without dependable airline service, we're stuck to swimming between our islands. So we are terribly indebted to the service that our airlines provide, not just for the residents, but also for the millions of tourists that come through.
Mr. Zander joined Aloha Airlines in May 1994 and has more than 25 years of airline experience, coming to Aloha Airlines as co-chair of TWA. Thank you very much, Mr. Chairman.
Mr. MICA. Thank you so much.
I'm pleased at this time, we're first going to hear from Carol Hallett, who again is the President of the ATA. You're welcome back and recognized.
TESTIMONY OF CAROL B. HALLETT, PRESIDENT AND CEO, AIR TRANSPORT ASSOCIATION OF AMERICA; GLENN R. ZANDER, PRESIDENT AND CEO, ALOHA AIRLINES, INC.; AND DONALD J. CARTY, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMERICAN AIRLINES, ACCOMPANIED BY BRAD ASPGREN, MANGER, AIRPORT AUTOMATION
Ms. HALLETT. Thank you, Mr. Chairman, and Mr. Lipinski and members of the Subcommittee. And I certainly appreciate the opportunity to discuss the genuine commitment our ATA member airlines have made with respect to improving customer service.
First, the board of directors of ATA greatly appreciate the practical approach this Committee has taken in working with the industry to develop a voluntary customer service program. The Committee's focus on the source of complaints are certainly one that has been mentioned today, the inadequate aviation infrastructure. We believe that is a very important target.
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I want to also thank you for the opportunity to respond to this issue without the intervention of Federal rules and inflexible regulations. We believe we are making very real progress. As the Inspector General's final report points out, our carriers made solid progress in a number of areas during the first year of our program, and we're beginning to see some positive results.
On February 13th, the DOT IG, Ken Mead, completed an exhaustive audit and graded the industry with As and Bs on 9 of the 12 commitments. Most importantly, in the first four months of this year, customer complaints, according to the DOT, were down 12.5 percent over the same four month period last year. And it's very clear that when Congress has brought its concerns to our attention, as you have, we have followed through. And we're working very hard to do that.
While we have not reached perfection, and I would emphasize we have a long way to go, we are focused, and we have made a huge investment in customer service. We estimate, in fact, that the industry has spent at least $3 billion so far in this particular effort.
But let me be candid. During the 1990s, the industry did seem to lose its focus on customer service. Record financial losses, incredibly intense competition to reduce costs and labor difficulties all took a toll. The situation was magnified not only by the enormous growth in passengers, up to 655 million last year, but also a lack of investment and leadership over the years in expanding airport capacity and modernizing our air traffic control system did contribute to the problem.
Fortunately, because of the work of this Committee and others, and the commitment of top airline management, we are turning this around. But we do need to do more. We are flying twice as many people today as 20 years ago with the annual number of airline passengers expected to be in excess of $1 billion between now and actually 2010 and 2012, when that will happen.
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Unfortunately, the airlines can only improve those parts of the problem subject to their control. As to the other issues, the airport infrastructure and the pace of air traffic control modernization and expansion, we must rely on others, but we certainly stand by to help. But with all the partners pulling together, and that's what this is all about, all of working together, Government and the private sector, I believe we will get all this done.
As Chairman Mica indicated, senior customer service representatives from our ATA airlines met with the Chairman and other members of the Committee, and we have worked through the recommendations outlined in the IG's final customer service report. And those were later placed into S. 319 by Senator McCain.
I'm pleased to say that we have reached voluntary consensus on many provisions already that are outlined in S. 319 that would require an airline-specific response. Let me touch very briefly on just a few of the items that we've agreed to do. And I would also like to point out that we have assigned a time line for all of these additional commitments.
On April 3rd of this year, we petitioned DOT to review both the Federal rules governing the compensation due to passengers bumped from over-sold flights and to establish a more accurate calculation of the number of bags carried and those that are mishandled. We established a task force made up of experts from airlines, airports, passengers and the FAA to find ways to coordinate efforts to help ensure airport display monitors and other flight information will be available for passengers, so that they can receive accurate and timely information.
The task force is also considering ways to better coordinate emergency contingency plans with both airports, as well as the FAA. And also to coordinate with airports to help passengers who are required to remain overnight due to delays, cancellations and diversions. These experts will come together and will have a final recommendation to present to you by the end of next month, July 30th.
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On the 7th of June, as you know, Mr. Chairman, 14 ATA member passenger carriers announced that each now has included the original voluntary commitments into their contracts of carriage, which creates a legally binding obligation to passengers. Our carriers have committed to establishing performance measurement systems, so that needed adjustments and corrections can be made to improve customer service within their respective companies. And ATA member passenger carriers have committed to establishing realistic targets for reducing chronically delayed and canceled flights.
Today, all of our carriers provide individual flight performance, that is information that we're giving to our customers upon request. Our carriers have now committed to either putting on-time performance statistics for each flight on their internet web site or to provide the Bureau of Transportation Statistics web link on their web sites, or to provide a toll free reservation number on their web sites that will allow customers to call for specific flight performance information.
As of June 1st, all of our members had either a toll free number of a local number so passengers can obtain immediate mishandled baggage information and assistance. And we have expanded upon our original commitment and now our carriers make their lowest fares available for which customers are eligible through their telephone reservation systems or at airline ticket offices or airport ticket counters. Our member carriers have committed to establishing systems to inform passengers if their flight is delayed or canceled before they depart for the airport.
Now, some carriers have programs that actually allow this type of information to be sent to pagers, personal digital assistants, the PDAs, or over the internet and to their homes as well. This can be done by request of the passenger. Other carriers have established toll free numbers that enable passengers to call and obtain the most up to date flight information.
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ATA member carriers have committed also to establishing advisory boards or partnerships. And they are participating in industry-wide forums with representatives from disability advocacy organizations to help each carrier evaluate and make improvements to their special needs programs. We responded to these recommendations in ways that will allow each company to develop and implement programs that fit their individual structures and resource capabilities and most importantly, and this was mentioned by several of the members, to allow them to compete and to be innovative and to try to provide the best level of service. Obviously, that is a very important competitive issue.
Mr. Chairman, we firmly believe that a legislative one size fits all approach will do nothing to ensure that airline employees will work harder to meet the daily demands of millions of passengers. And you'll hear more about that from our two airline representatives.
Unfortunately, what a legislative approach will ultimately do is increase the cost of flying for everyone while our inadequate infrastructure problems and the resulting flight delay situation continues to worsen. Finally, as the chart points out, our carriers are investing millions of dollars to improve customer service in many areas. Unfortunately, most people are unaware of these huge investments and the improvements. That is because too often good stories don't sell any newspapers. And that is a big problem for us.
But Mr. Chairman, I particularly want to thank you on behalf of ATA, not only for this hearing today, but this is a process we believe that will start to actually educate the public and particularly all of the customers of all of our airlines on the enormous effort that the industry is making and trying to make to improve the flying experience.
We appreciate very much the opportunity to be here, and thank you.
Mr. MICA. Thank you. Let's go to the little guy, you've gotten such a grand introduction, Chairman Glenn Zander of Aloha Airlines. Welcome, and you're recognized.
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Mr. ZANDER. Thank you, Mr. Chairman, members of the Subcommittee, I am Glenn Zander, President and Chief Executive Officer of Aloha Airlines. I appreciate the opportunity to appear before you today to discuss the status of our voluntary efforts to improve customer service.
First, I'd like to provide just a brief overview of Aloha Airlines and the Hawaii air travel market in general, as this information will, I believe, serve to illuminate the reasons why we feel the testimony of a smaller carrier serving the 50th State is important to the Committee's consideration.
With the Committee's indulgence, we have prepared a few slides to assist in that process, which my colleague is going to assist in presenting. Aloha is definitely not a household name to most of you. But in Hawaii, we provide significant air service. We exist primarily because of Hawaii's unique geography, which was referred to earlier by Congresswoman Mink in her very kind introduction of myself.
The islands are approximately 2,500 miles from the U.S. mainland and are separated from each other by seas that are not conducive to passenger boat travel. Within the islands, over 9 million people per year use air service. Of these, we carry over 5 million. About 60 percent represent visitors from North American or the Far East. The other 40 percent are local residents who need to conduct business, visit relatives, take a vacation, get medical care and so forth.
During the day, we operate a fleet of 18 737s. They're tightly scheduled to provide high frequency, quick turnaround operations to carry those 5 million passengers I referred to previously. At night, we convert several of our aircraft to freighters, and we move essential goods between the same airports.
It's not an understatement to say that the economy of Hawaii depends on this high frequency, reliable and may I emphasize, affordable air service. In addition to our inter-island services, Aloha also operates a fleet of long range 737-700s flying between Hawaii and the destinations of Oakland and Orange County, California, Las Vegas, Nevada and several islands in the central Pacific.
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Now, our operations in Hawaii are similar to the New York shuttles with which you're probably more familiar. But in our home environment, we are the dominant carrier. In our long range operations to California and Nevada, we are a very small player, operating in niche markets with many similarities to the typical start-up operation. Hence, we think we bring in many ways a unique perspective to the matters you are considering today.
The markets in which we operate are highly competitive, and Aloha has always sought to distinguish itself with superior customer service. Again, with the Committee's indulgence, I would just like to highlight some of the things that we as a carrier have done to preserve and enhance our competitive position.
We were the first airline to provide a drive-through check-in service, we know in the United States and we believe throughout the world. We were the first airline in Hawaii to provide kiosk check-in. In 1995, Aloha installed larger overhead bins to better serve our customers, which I think were mentioned a couple of times as a preference item. In 1999, two years ago, we removed seats to provide more leg room for our customers. In 1999, we were the first airline to equip all oaf our fleet with defibrillators, and by month's end will have equipped all of our long range aircraft with enhanced emergency medical kits, which is still being debated, I believe, by the FAA, in terms of a regulation to do that.
More importantly, in 1998, we initiated what remains to this day the only comprehensive airline guarantee to passengers and the world. We guarantee timely departures and arrivals, we guarantee prompt delivery of baggage and we guarantee courteous service. If our customer judges us to have failed in any of these categories, we provide a free one way ticket to that customer with no questions asked.
I would like to note that since we started this program over two years ago, 99.8 percent of our passengers have not requested a free ticket, or said another way, 99.8 percent of our passengers were satisfied with our on-time performance, baggage delivery and courteous service. None of these actions were mandated by State or Federal legislation, but simply represent the market at work. We, Aloha, want to continue being the best provider of air service in the markets we serve, and we continually innovate to do so.
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Additionally, we are the only carrier to voluntarily report our on-time performance to the Department of Transportation. And I would add that our performance in this category is second to none.
Now, this brings me to the most important element of my testimony, which is why we are able to do the things I have outlined. I must say in deference to my other airline colleagues that it is important to note that we do enjoy the advantage of a distinct lack of bad weather.
[Laughter.]
Mr. ZANDER. Snow storms, de-icing problems and the like are not issues with which we have to deal. But there is a much more important element in the equation for your consideration. Hawaii's life blood is air service. We cannot exist without it. Adequate facilities and runways do exist to foster a competitive environment. We don't have a shortage of gates. We don't have a shortage of runways. And we do not have problems with air traffic control. There is adequate infrastructure to accommodate all of the air service necessary to bring people to Hawaii and to transport visitors and residents throughout the islands.
Why? Because it's been a high priority to do so. Supply of air seats is not rationed. It's not rationed by lack of gates, it's not rationed by slots, it's not rationed by insufficient runways. And interestingly, in that environment, the market then operates to produce just what your Committee is seeking.
Now, I recognize that you cannot do much about the weather, that's for certain, nor can my airline colleagues. But fostering greater infrastructure is really what the Government can do best. Legislating customer service, I would suggest, is not really the answer. Providing the infrastructure for competition to flourish is.
Just to take one example, if I wanted to take one of my long-range 737s from our newest destination, Orange County, and fly it to Washington, D.C. to offer what we think is a unique brand of Aloha service, I can't do it. Slot controls at Reagan Airport prevent that. In other airports, it's a lack of gates, it gets into overcrowded systems, very difficult to consider expansion.
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Now, Aloha has participated with larger airlines in enacting voluntary customer service initiatives. We did so because these have been manageable commitments. But most importantly, they're commitments that allow each carrier to design what works in their circumstances.
Legislation, however, makes no exception. All carriers, regardless of size or regardless of different market dynamics, end up being mandated to adapt to a one size fits all Government imposed set of criteria. I'd like to say that assuming a picture is sometimes worth a thousand words, we would like to emphasize again, one size does not fit all. And if you look at the picture, that's a little how we feel when we look at the legislation that's being drafted. Aloha is the little kid there with the suit on.
The result of this in our case will be to divert our limited resources from innovations our customers really want. We end up spending those to comply with laws that don't differentiate between carriers. This imposition of one size fits all mandatory customer service requirements will likely end up stifling innovation. It could choke new entrants and cause even healthy and customer friendly carriers, of which we like to think we're one, to undertake inappropriate, expensive and in many ways counterproductive actions, simply because the bureaucracy, through the law, demands them.
Now, while the standard of customer service provided by the industry may range from adequate to excellent, and some of you might object to the term adequate, but I'll leave it at that.
The perception of that service is driven really in large measure by delays. I would like to emphasize that legislating customer service won't really reduce complaints. On the other hand, legislative aviation capacity expansion will produce ultimately reduced delays, and will reduce complaints, and I suggest again, will produce through market forces exactly what you're seeking.
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Now, I recognize delay reduction is not easy. It necessitates political will to overcome the forces of those who do not accept progress and economic development. It necessitates the expenditure of money to build necessary capacity. And it necessitates investment of political capital to reduce procedural barriers to expansion.
The airlines, as a group, have made and are making changes in their practices in order to improve customer service. The airlines stand ready to make substantial financial investment in capacity necessary to meet public demand. But our customer service improvements, whether voluntary or legislated, will not solve the underlying problem facing the U.S. aviation system, and that is shortage of infrastructure.
Mr. Chairman, if there is one final message I can deliver, it is this. The airline industry knows it must provide better customer service, and as you know, it is committed to doing so and has done a number of things to accomplish that. The real solution to customer service is commitment. It's our commitment to doing better, it's local communities' commitment to expanding airports. It's the FAA's commitment to deploying technology that expands the capacity of our air space. And hopefully, this Subcommittee's commitment to fostering the expansion of aviation infrastructure and the financial health of the airline industry.
I would like to thank you for the opportunity to present my views on the proposed customer service legislation, to describe Aloha's somewhat unique approach to customer service, and in due course, would be happy to respond to any questions.
Thank you very much.
Mr. MICA. Just one question. I want to know how that kid got Mr. Menendez' clothes.
[Laughter.]
Mr. ZANDER. It's a secret in Hawaii.
Mr. MICA. Thank you for your testimony. I shouldn't have said that, Mr. Menendez, no offense.
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Mr. MENENDEZ. Mr. Chairman, I'd be happy to send you the bill, you're so gracious about it.
[Laughter.]
Mr. MICA. Let me, before I get in more trouble, recognize Don Carty, the President of American Airlines. I want to say, I saw the passenger commitments that were made and the other things that you're doing and I think Ms. Kelly mentioned something about American. But I just want to thank you, and this is unprompted by anything, but the airlines have taken some steps to deal with the delays that we have at these capacity airports. Until we solve delays, we're not going to really get a handle on this.
But American is one of the three airlines, and through deregulation we've created these hubs that are congested, but I know through some of their scheduling changes, particularly to and from O'Hare, I believe it is, they've made a big difference in some of the delays and rescheduling.
I just also would compliment Delta and Continental for their similar efforts, and urge the others to look at rescheduling, particularly banking and peak times when these airlines are congested. With that lengthy introduction, I thank, welcome and recognize Mr. Carty.
Mr. CARTY. Mr. Chairman, Congressman Lipinski and other members of the Committee, as the Chairman said, my name is Don Carty. I'm the Chairman of American Airlines. I'm also the chairman of the Executive Committee of the Air Transport Association, who as Carol suggested, whose member airlines transport approximately 95 percent of the passengers and goods that fly on airlines throughout the United States.
Now, my message today includes some good news and some bad news. The good news is, I believe that there is compelling evidence to show that as an industry we have turned the corner on customer service problems. While not yet where I think we need to be, the trends on delays, the trends on complaints and the trends on a number of other customer service measurements are clearly moving in the right direction. This is a result, in large part, to our listening and responding to both you in this Committee and of course to our customers.
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It's also the result, I might add, of spending literally billions of dollars to improve our service at all levels, and of committing ourselves to unprecedented levels of cooperation, I think, between the industry on the one hand and the FAA on the other.
The bad news is that some of the very substantial and very expensive ongoing initiatives by this industry are in fact taking place at a time of dire economic conditions in which we've suddenly found ourselves as a result of the current economic downturn. Mr. Chairman and members of the Committee, we have suffered through many ups and downs in the airline industry. But personally, I can't remember such a precipitous drop in traffic, particularly in business traffic, in all my years in this business.
And I raise this only to emphasize that in an area of rising energy, rising labor costs and now substantially reduced revenues, the resources that we have to deal with these problems really are very severely constrained. Nonetheless, even under these circumstances, I think as both Carol indicated and Glenn indicated, we are determined to do everything we can to continue our progress.
Today I'd like to talk about some of the specific American Airlines initiatives, since those are the ones that I'm most familiar with. While other airlines have indeed introduced some of their own new products and technologies, and I can also assure you that at virtually every gathering of airline CEOs over the past year and a half, this topic has literally been the top topic on the agenda.
Now, the good news is I can reveal today, after exhaustive personal research, that I've come to the conclusion that American Airlines has done the very best job of all at meeting the customer service challenges, of course. I say that only half in jest. Truth be told, all of our competitors have delivered on the industry's promise. Frankly, it isn't at this point in any of our interest to have only some of the airlines doing a good job. Just like safety, the industry's service reputation depends on the public, the traveling public, having complete confidence in the industry's commitment to our passengers.
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Now, let me briefly discuss some of the many customer and service improvements that we've implemented at American. Now, many of our new customer service enhancements are already getting positive reviews, of course, the most significant was our much-heralded ''More Room Throughout Coach'' initiative that was announced by us back in February and has been mentioned by a number of members today.
We committed over $70 million to this project, and we completed the refurbishment of our entire 600 plane domestic fleet last year ahead of schedule. We're now just about finished with our international fleet, and next we will extend this enhanced seating to the 200 aircraft that are in the TWA fleet that we are in the process of integrating into American. When all is said and done, almost 900 American Airlines aircraft will provide increased legroom to virtually every coach passenger that we serve.
Earlier this year, we matched our more room throughout coach passenger initiative with a more room for carry-on bags project in which we, too, are expanding the overhead bins in 500 of our narrow body aircraft. Combined with the seating reconfiguration, an industry leading program to install defibrillators and enhanced medical kits on all our aircraft, and a $400 million investment in a new refurbishment program upgrading the interiors of literally all our aircraft with ergonomic seats, comfortable materials, leather headrests and power ports, we've now invested more than $550 million in in-flight passenger comfort since 1999. And we did this without Congress passing a law or the Department of Transportation issuing a single regulation. And these onboard enhancements have been matched by airport and customer service tools that are further improving air travel.
Now, our customers told us in our ongoing research that they desire alternative methods to check in at the airport, which will make their airport experience faster, and at the same time, more convenient. As such, American is now installing state of the art, one stop self service kiosks and expanding innovations such as one stop curbside check-in, and something we call Roving Agents. Now, one stop curbside check-in allows customers to not only check luggage with a skycap, but at the same time they do that, they can also receive their boarding pass from the skycap, even before they enter the terminal.
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Roving Agent is a wireless, handheld device that's used by American's customer service employees to issue boarding passes to passengers in a number of non-traditional and very convenient places throughout all our airport terminals. In fact, a demonstration of the Roving Agent technology will be provided today by Brad Aspgren, who's Manager of Airport Automation at American, as soon as I finish my briefing.
Now, this kind of airport technology compliments American's new flight status notification feature, which offers proactive notification of changes to flight schedules, or other flight information, to individuals who register for this service through AA.com. This information is delivered through a variety of wired and wireless device options, including e-mail, pagers, text enabled wireless phones, to name a few.
We've certainly not been standing still, and our passengers have noticed. From More Room Throughout Coach to the airport and technology enhancements, our passengers are having a better travel experience. They're complimenting our employees more, and they're reporting fewer problems to us. And the improvements are not just reflected in the data that we see internally at American. The Department of Transportation's own reports clearly demonstrate that the industry as a whole is showing significant progress in some of the areas consumers care about most, delays, baggage and over-sales.
DOT figures show that for the first five months last year, airlines operated 75 percent of their flights on time, meaning the flight was within 15 minutes of its posted schedule. A year later, for the same five month period, the industry on-time percentage was up three points.
In the first five months of 2000, for every 1,000 passengers, nearly 5 filed a report indicating that their luggage had been mishandled. During that same period of 2001, that number is now down to 4.6 reports per 1,000. That's an industry improvement of 7 percent, in fact, a 13 percent at American. One passenger out of every 10,000 was involuntarily bumped from a flight in the first quarter of 2000. In the first quarter of 2001, the industry number was lowered to .86, an improvement of 13 percent, and American Airlines achieved an improvement of 36 percent.
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This progress is reflected in fewer complaints being filed by the consumers with the DOT from 3 complaints per 100,000 enplanements in the first five months of 2000 to 2.6 in the same period of 2001. That represents a 12 and a half percent improvement for the industry, and a 20 percent improvement at American Airlines.
That's not to say that complaints have evaporated. They have not. And we continue to look for ways to address those areas of our operation that need more improvement. Unfortunately, the industry does remain somewhat powerless to adequately address the number one complaint that plagues airlines and passengers, and that of course is delays.
We, and I refer now to the collective we of our Nation, are the victims of the success of airline deregulation, the popularity of air travel and the failure to expand aviation capacity to meet the public's demand. Now, the many other steps we've taken so far will help a good deal. In the long term we absolutely need Federal legislation to solve the major problems of air traffic control modernization and infrastructure.
One item in particular is essential, and to borrow shamelessly from the National Air Traffic Controllers Association, there is a concrete solution to many of the capacity problems—concrete. We need new runways at many airports in this country and we simply can't wait 15 to 20 years for each of them to be built. If you look at that list of airports where delays occur, runways are being planned or are under consideration at most of them because they are known solutions to the problems at most of those airports.
Just looking down the list, Atlanta has finally approved a runway, Boston badly needs another runway, Newark and Kennedy of course are just simply full up and slot constrained, Los Angeles is having a public debate about additional capacity, LaGuardia is slot constrained, O'Hare is probably at center of the need for additional runway capacity in this country, and San Francisco is of course attempting to end up with another runway. Every one of these airports where these major constrains are occurring is runway constrained.
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We are immensely appreciative of the leadership of this Committee for focusing on this issue. Mr. Chairman, I do appreciate the time you and the Committee have afforded me. I close with this last thought. As we approach the end of the second quarter financial reporting for most of the industry, I cannot over-emphasize how challenging it will be for our industry to operate in the coming months as we deal with the dramatic slowing economy and rising costs. Be assured we have not let this slowdown distract us from our focus on customer service improvements, nor are we losing sight of the need to invest in our Nation's infrastructure.
We want to partner with Congress, we want to partner with the Administration on ways to make meaningful improvements to air travel. And to do that, we do need all parties to focus on the right priorities. Thank you very much.
Mr. MICA. Thank you for your testimony.
Did you say you wanted to show us this new technology? Maybe you could identify yourself and we'll have this little demonstration.
Mr. ASPGREN. I'm Brad Aspgren, Manager of Airport Automation for American Airlines. I'm going to demonstrate a Roving Agent.
[Demonstration of Roving Agent by Mr. Aspgren.]
Mr. ASPGREN. There's two pieces to it. There's a PDA—
Mr. MICA. We've got two minutes, then we're going to vote.
Mr. ASPGREN. It's a handheld wireless device and it's also a boarding pass printer. We use the device to check people in, answer security questions, print boarding passes and a variety of things like that. We can use this for both paper ticketed and electronic ticketed passengers. We use this proactively to approach customers who look like they need some assistance, even if they're standing in a line, we can reduce lines throughout the airport. We can also approach someone walking through the airport who needs a boarding pass, or someone who may have a special need for a boarding pass that may not be able to go through the gate very quickly.
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Let me walk you through very quickly a quick demo. Let me show you how we use this to operate.
Mr. MICA. I need one for Friday.
[Laughter.]
Mr. ASPGREN. Perfect. What we do is go through, answer security questions, get the name checked, i.d., security questions and print the boarding pass. This device, we use this in our day to day operations, and it's a great tool to improve customer service. It's also especially good when we have off-schedule operations. The boarding pass will be here in a second. The off-schedule operations, we're able to process passengers very, very easily. The off-schedule operations are here, if you'd like to see what the boarding pass looks like.
Mr. MICA. I think Mr. Menendez needs this one—where's his luggage?
[Laughter.]
Mr. CARTY. It's not lost.
Mr. ASPGREN. Customer reception has been extremely positive, because we're able to process customers within a minute. We really have personalized the service with this, and that's why it's been very effective.
Mr. MICA. Well, we appreciate that little demo. I think we've seen some of what the airlines are doing.
We do have, I think, three votes. We're going to have to adjourn for about a half hour. Hopefully we can come back within five minutes of the last vote. There will be several five minute votes.
So let's stand in recess, and then we'll get to questions from members and get to our second panel.
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[Recess.]
Mr. MICA. Let's go ahead and get the Subcommittee back in order. We finished the testimony of our witnesses in the first panel. I had a couple of questions. I know how sincere Carol Hallett was in saying how pleased she was to be here. The only thing I can think of that would compare to that would be my thanking my dentist after the root canal he did on me several years ago.
[Laughter.]
Mr. MICA. But that aside, we are pleased that you have provided the Subcommittee with some background relating to the initiatives you've taken, and we sincerely appreciate your working with us, and you have done that consistently since I've been on board here.
One of the major questions before the Subcommittee is whether we legislate or we have these voluntary commitments in place. If we legislated, we probably would have to do something general. Certainly as you heard this morning, we only had part of our membership here, but we had 535 flying experts, all of whom would like to include their own complaint or gripe about airline service in that 535 page bill.
But my question really is legislation would probably require rulemaking to implement it, since we do have these different size airlines. We're going to do a hearing, I think in a week or two, on regulations and how they relate to airlines. I'm told it takes 2.8 years on average to get an FAA rule in place and I think 3.5 years to get a DOT rule enacted. What's the advantage, Ms. Hallett, to this voluntary approach versus the legislative approach? How would you convince members of the Committee this is the way to go?
Ms. HALLETT. Well, Mr. Chairman, I think that anyone who listened to Glenn Zander and all of the things that Aloha has done voluntarily, at the same time at one of the smallest carriers, and then listening to Mr. Carty, the largest carrier, talking about what American has done voluntarily, they have both done different things that have brought tremendous benefits to the passenger.
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But if you were to design a proposal such as S. 319 in the Senate, that is going to have an enormously adverse impact on Aloha, because it will mandate certain requirements on Aloha that they currently do not have to spend that money on. For instance, they may only have one employee to do a particular assignment where another carrier might have 100 employees. Yet by having a new regulation, it would totally change the picture.
We really are convinced that the reason that we should go forward with a voluntary commitment is because not only have we followed through on the first 12 commitments that we made, and that incidentally, and Mr. DeFazio, I think this is very important to point out, because the original 12 commitments were negotiated with members of Congress. And while I must admit that that was started on the Senate side, that was literally with members of the Senate and their staff that we negotiated those 12 commitments that now of course are in the contract of carriage. And they do, as I mentioned before, have the impact of law.
Mr. MICA. Speaking of the contract of carriage, again, if we had those commitments in law, what would be the recourse for a passenger, versus having the commitments in your contract with the passenger?
Ms. HALLETT. Well, first of all, having them in the law, you're able to go not only as a passenger to DOT and complain and get satisfaction and in many instances, a passenger will end up suing an airline.
Mr. MICA. Well, wait, wouldn't recourse under the law allow, I guess you'd have to have some penalty for violating the law, so the airline would be the recipient of the compensation, depending on of course what the rule, which would probably take them 2.8 on average to institute for compensation to the passenger. But the recourse, as I understand it, and I'm not an attorney, would be to complain and then the airline would be penalized by FAA.
Ms. HALLETT. Right, or DOT.
Mr. MICA. Okay, so the difference in this is, I have a legally binding contract and I could go after, well, there are provisions again in the contract, and I could go after the carrier directly?
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Ms. HALLETT. Right.
Mr. MICA. But let me just finish by saying that, as you know, we've been working with you on, again, a voluntary approach and certainly under the additional commitments that have been called for by the Inspector General, we have established dates, this was mentioned in my testimony today. We now have a list of 17 different points where we have either ongoing efforts to meet the requirements and/or what is being asked for in those commitments. And I'm more than happy to go through that with you, if you would like, or to submit that to you, Mr. Chairman.
Mr. MICA. I think submitting it would be fine.
Ms. HALLETT. We're very pleased with the progress being made in terms of meeting the next 27 issues that have been raised by the DOT IG.
Mr. MICA. I think Mr. Zander also pointed out in his testimony and confirmed, I think, what I said in my opening statement and what I think I've learned in the last five or six months, I mean, we can deal with trying to pass laws relating to complaints, but you have to get to the root of the problem. I think you showed that you don't have the capacity problems, you don't have the runway problems, nor the traffic. And particularly the bad weather. Weather I think accounts for about 70 percent of our problems.
Again, this maybe isn't a question, but it's just an observation. And I think your testimony pointed out, if you have those things in place, you have far fewer complaints. And the complaints emanate from delays and delays cause the baggage to be lost. I guess when you lose a bag, Mr. Zander, you really lose a bag, given the distances.
[Laughter.]
Mr. ZANDER. Most of the time when we have a bag lost, it's because of the inbound, in other words, there's another carrier bringing it in long range.
Mr. MICA. Really? You're serious?
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Mr. ZANDER. Oh, yes.
Mr. MICA. And again, most of your lost baggage would result from some delay down the line.
Mr. ZANDER. You've got someone coming in from the mainland or the Far East, their bag gets lost. We, however, have the pleasure of being the recipient of the complaint, of course, as the final destination. But if we lose something internally within Hawaii, it's relatively easy to recover, given the distances. So that tends to be extremely easy to solve within 24 hours. When it's someone coming in from long range, it's a much more complex issues, because you've got to work all the way back through where the problem started and find it, bring it in, etc.
Mr. MICA. My final question deals with the cost. I would imagine these delays are costly. I've been in business before, and I know any time you have any disruption of service that the owner ends up taking it on the chin financially. Is that the case with the airlines, Ms. Hallett? How much is this costing you and are you anxious to have more delays so you can have more costs?
Ms. HALLETT. The best answer I can give you, Mr. Chairman, is it's probably why the airlines are working so hard to avoid delays.
Mr. MICA. You're not answering my question. How much is it costing?
Ms. HALLETT. It cost us $6 billion last year combined with passengers and the airlines.
Mr. MICA. You're looking forward to increasing that so you can lose more money.
[Laughter.]
Ms. HALLETT. I think that's a very interesting way of stating it.
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Mr. MICA. Thank you. No further questions.
Let me yield to Mr. Lipinski, who's going to yield to the gentleman from Oregon.
Mr. DEFAZIO. Thank you, Mr. Chairman, Mr. Ranking Member.
Mr. Carty, when you were in about 18 months ago I shocked the room by complimenting an airline, and do it again, you did deliver on the promise of adding more leg room, but you still aren't flying to Eugene.
[Laughter.]
Mr. DEFAZIO. We hope to remedy that in the not too distant future, I was just talking to one of your folks.
Mr. CARTY. Will you promise to be nice if I do?
[Laughter.]
Mr. DEFAZIO. If you come to Eugene and provide good service, I'll be really happy. We've got a nice, long runway there, you can load up with fuel and people and go a long way.
There are several things I'd like to focus on I'll go to the bumping, because we just heard a devastating critique by the Chairman and Ms. Hallett of rulemaking and how it would be horrible if Congress passed something, and then we had to have a rule, because rules take so long. Well, first off, rules don't take long if they're not contested. We all know that. The airlines generally contest the rules, or other groups, and then it does drag out.
But secondly, I would note that one of the big things you're doing is, you're petitioning for a rule. We just went through a devastating critique of the rulemaking process, and you're petitioning for a rule on bumping compensation which was set in 1985 at $400. I referenced this earlier, but I think we would all admit $400 is inadequate when you inconvenience a family of three or four and they miss a day of a vacation at Disney World. They've lost a heck of a lot more than $400 per person out of their lives.
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Since we're depending upon the same rulemaking process we were just castigating, we'll leave that aside for the moment. How about one of the airlines, are you aware, Ms. Hallett, of any of your member airlines that has voluntarily and competitively decided to compete on service? I always hear about how competitive the industry is, even though everybody raises the rates the same amount on the same day, there's no other industry that does that, but it's a very competitive industry.
Which of the airlines has offered voluntarily to increase the bumping compensation and put it in their own contract of carriage, make it enforceable on themselves, do it voluntarily? Has anyone done that? Has anyone done that with the issue of the value of baggage?
Because these could be to me, I think, very competitive areas. Has any one of your member airlines ever done that?
Ms. HALLETT. Not that I know of, Mr. DeFazio, but I would really appreciate being able to respond—
Mr. DEFAZIO. Well, briefly, because I have very little time.
Ms. HALLETT. Yes. First, in terms of voluntary, as you I believe know, rarely does anyone ever pay only the minimum. And that has been very important. And secondly, in terms of petitioning DOT, we have asked for an expedited rule. And in addition to that, as you know, we asked for that when we had the increase from the current amount for bags, taking it up to $2,500. And in a very short period of time that happened.
Mr. DEFAZIO. Well, then that would go to my first point, but you and the Chairman were involved in this little exchange about how bad rulemaking was and if Congress passed a new law you'd have to have a rulemaking, it takes 5 years, 7 years, 20 years. You're saying if the industry wants a rule, it can get a rule very quickly.
Ms. HALLETT. And we've asked for that.
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Mr. DEFAZIO. Okay. But I would suggest also to the two CEOs here that, you might think about this as a competitive factor.
Mr. CARTY. Well, Congressman, we really do. On the bumping issue, what you see in the marketplace is real competition to have the lowest involuntary bumping. And we do that by trying to avoid involuntary bumping. And we do that by bidding up voluntary bumping to prices well in excess of the limit set by the DOT. If you saw what airlines pay, particularly long distance airlines, to avoid involuntarily bumping, you'd frequently find flights where we bid it well up beyond $400 in the hopes of avoiding an involuntary altogether.
That, on a peak holiday weekend, we'll pay very substantial money if we end up with a flight that's substantially—
Mr. DEFAZIO. Well, if I could, I've observed the process, and it's pretty arbitrary. There are some gate agents who will very quickly bid it up, there are other gate agents who are insisting, and I don't know whether it's in their performance evaluation or whatever, on getting people off the plane at the lowest price possible, and they won't bid it up. And I've advised people sitting around me, hang on, ask for a higher price, and they're saying, 400, 400.
So you know, and I just have had a few recent complaints from constituents who had vacations ruined by being involuntarily denied boarding where they didn't get anyone to leave voluntarily. So they are going to be limited in their compensation. I'm not aware that people are providing those same sorts of remunerations to people who are involuntarily denied boarding and saying, well, gee, you're really right, that's worth a lot more than $400, here's $1,200 for you.
Mr. CARTY. I think you're right. I think the competition occurs in avoiding an involuntary, not after the involuntary's occurred bidding up the price.
Mr. DEFAZIO. Right. And I would say it's really variable with the gate, and I don't get the chance to fly on American, as I pointed out earlier. So I haven't observed your process.
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What about toll free complaint numbers? How many of your member airlines now have toll free complaint numbers?
Ms. HALLETT. Well, it varies—
Mr. DEFAZIO. Well, just how many, come on, we're going to run out of time.
Ms. HALLETT. All of them have it on their web site. Some of them are already established in toll free numbers. Not all of them have, but that is an ongoing effort that is underway.
Mr. DEFAZIO. So they are all headed toward having toll free numbers staffed adequately, more adequately—
Ms. HALLETT. No.
Mr. DEFAZIO. No? No. Could the two airlines, do either of you have a toll free complaint number?
Mr. CARTY. No, we do not have a toll free number. We do have, as Carol suggested, internet access.
Mr. DEFAZIO. Right, but there are quite a few people who don't have that capability. Still about half the homes in America.
Mr. ZANDER. We have somewhat less geographic area to deal with. It's a local call. Sometimes to my home in my den.
Mr. DEFAZIO. All right.
Ms. HALLETT. Mr. DeFazio, they can use the toll free number, reservation number, to initiate a complaint. All of our carriers have that.
Mr. DEFAZIO. That's interesting because not too long ago I had a complaint, and I called I was in the airport and I was very upset with the airline, so I called the 1K desk. That identifies the airline, I'm with United Airlines, I'm one of their very special passengers that they want to be very nice to who's flown over 2 million miles with them.
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I have a special 800 number, not the regular reservation number. I called there and they said, we don't take complaints. And I said, who does? And they gave me a number, which was not an 800 number, in Chicago, to call, where the janitor didn't answer the phone. I got put into an endless voice mail loop.
Then, since I'm a member of the Red Carpet Club, and I pay money for that, I thought maybe they'll help me. I called the Red Carpet Club 1-800 number, and they said, no, we don't take complaints here, we're sort of separate from United Airlines, we just service United Airlines.
I don't know, I've never tried calling the regular number, next time I'll just try the regular 1-800 passenger number and I guess they'll be much more responsive. That's a good hint. I'll try it and I'll let you know how it works.
Ms. HALLETT. Thank you.
Mr. DEFAZIO. But I would suggest that, and this goes back to what the Chairman talked about and others earlier, about how the level of complaints is down so much. If people don't know who to complain to or they can't get their complaints recorded, the number of complaints will go up and down, but mostly down. I'd just like to suggest something here. I think you could poll your passengers and I bet you'd get 95 percent of them or 90 percent of them to say yes.
I was just sitting here figuring it out. If we charged one penny to every ticket issued in America to establish a toll free number and a clearinghouse, whether it's DOT or it was a contracted agency that would then deal with all the airlines, we could raise five and a half million bucks a year and have a group of people, 50, 60, people, well paid at that price, well equipped, to handle complaints. That might be a step forward.
I know in the past I've proposed that the airlines put a 1-800 number on the back of the ticket, well, that hasn't been very well received. I've proposed that the Department of Transportation establish a 1-800 number, and I was told they couldn't handle the volume of complaints and it would cost too much. So I'm proposing something new.
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Do you think that maybe your airlines would be interested in supporting a one cent fee on each ticket issued? For me, it would cost me, I do 30 round trips a year, 30 cents a year, I'd be willing to pay it. I'd pay it out of my own pocket. And I bet you have a lot of other frequent flyers who fly even more than I do, 40, 50 times a year, and would be willing to pay half a buck a year to have a toll free number that they could use when they have a complaint. Don't you think people would like that?
Ms. HALLETT. They might, Mr. DeFazio. We're always willing to listen to every suggestion and look and see how it might work the best.
Mr. DEFAZIO. Well, maybe you can take it back to your board and see if they'd like to endorse that concept. I'd be happy to either see you do it voluntarily, to petition DOT, or maybe it would take legislation and we could do it legislatively.
Thank you, Mr. Chairman. My time's expired.
Mr. MICA. I thank you. And the gentleman's time expired.
Let me entertain questions from Mr. Isakson from Georgia.
Mr. ISAKSON. Thank you, Mr. Chairman.
First of all, I want to thank Mr. Carty for the extra leg room. I have enjoyed that.
[Laughter.]
Mr. ISAKSON. I also have to compliment my home airline of Delta, who's not testifying today. But some of the things they've done with regard to disability access, wheelchair accessibility for those types of passengers, that's a tremendous advantage. And a lot of the airlines are making some moves.
I'd like to ask a question of Mr. Zander from Aloha, and then maybe make an observation. My experience, I ran a business for 22 years that the Government more and more increasingly got into regulations with regard to all kinds of things, based on a negative experience here or there in the industry. And that's important. And I think the fact that the Passenger Bill of Rights thing got talked about probably spurred the airlines' initiative. So we serve a good purpose in doing that.
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But one of the experiences I had, and it reminds me of some of these areas mentioned here, the unintended consequence of a statutory regulation of a minimum standard ends up dictating a maximum standard of service because people go to compliance rather than as much competition and use the requirement as the reason why they're complying.
And second of all, and probably more importantly when you have a competitive environment of large and small companies, even though I realize the airline industry has contracted in the number of competitors, the cost is disproportionately horrible on the smaller competitor. And I think you said that, but I'd like for you to elaborate on that for just a minute.
Mr. ZANDER. Definitely, it does have a disproportionate effect on smaller carriers. Because some of the things that are being contemplated with respect to, for example, setting up data bases within a carrier's web site, the software to do it is basically the same whether you're operating one plane or 600 airplanes.
But the staffs that are available at each carrier are remarkably different. Don's probably got more people on sick leave than I have in the whole department. I've got one guy that does my web site. And to take that individual and set that individual to work on putting together all the records of every flight that we operated last month and have it all available by the fifth of the month following, I won't say it's impossible, but it would basically take him away from all the other things we're doing that our customers want. And doesn't accomplish anything, because very few of our flights are actually operating not on time on a regular basis.
So I use that just as an example. But it permeates the legislation, these things where substantial resources will be required and perhaps the larger carriers could sustain them better. But certainly at the smaller end it would have a significant and adverse impact with, from what we can see at Aloha, very little benefit to our customers.
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And going back to the 800 number concept with respect to an Aloha, you know, the way I get communication on people upset is they can file their guarantee form. It's an extremely effective way to know immediately if we're having any sort of customer upset. And when I look at the fact that it's only .2 of 1 percent of all the passengers who fly on uss who have any objection whatsoever. I don't know that it would add a lot to put in an 800 number, because we already know basically on the same day if there's anything problematic.
So all these things that sound good for perhaps carriers that are operating over extensive networks don't necessarily add any value whatsoever to smaller carries operating in more regional environments.
Mr. ISAKSON. The observation I wanted to make, and you're welcome to comment on it, just after thinking about this, I've flown for the better part of 30 years in business and now as a member of Congress, following deregulation with the hub and spoke system developing, and your choices being, at your point of origin your choices diminishing, but your convenience greatly expanding, it almost seems to me that the byproduct of far greater convenience from hub airports, I realize that Eugene and others may have another problem, and I don't have any experience so I won't comment, but because of that the consumer has less choices, if you will, on the point of origin.
Yet what the consumer demanded post-deregulation was more accessibility to be able to get around the country. So part of the perceived problems we have today are byproducts of solving what was a bigger problem in the past. Am I right or wrong on that?
Mr. ZANDER. As an observer, I mean, I'm not an operator of a major hub airport, but as an observer and to some extent a user, you have phenomenal choice from hub airports, whether it's Atlanta or Dallas or Chicago, incredible choice of destinations. You can go from Atlanta to the Far East or Europe or whatever in ways that used to require you to go through some sort of gateway. You had to go through a JFK or whatever in order to make that happen.
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I think it's an incredible increase in convenience for those who have hub airports and merely look at what people will do to try to attract hub airports into their community. It's seen as a tremendous boon to the economy of that city and State.
Mr. ISAKSON. Mr. Carty, do you have any comment on that?
Mr. CARTY. Well, I would agree exactly with what Glenn suggests. Hubs are by their own definition wonderful providers of service, not only to the local hub market but also to all the connecting opportunities that exist from one side of the hub to the other side.
But by their very nature, generate the kinds of problems we see up here if we don't keep the infrastructure on top of them. We've had the good fortune at DFW, we've now got seven runways and we're looking for eight. Atlanta has been very responsive, in fact, the extra runway in Atlanta is probably the fastest approval of an additional runway we've seen in the last 20 years.
But if you look at some of these other airports, they are either hubs like O'Hare and Philly and to some degree San Francisco, a hub to go to the Asian markets and Kennedy a hub to Europe. All of these markets are blessed with all this service capability and all this choice for consumer, but are challenged by infrastructure, more than I think any of us anticipated prior to deregulation.
Mr. ISAKSON. Thank you. Thank you, Mr. Chairman.
Mr. MICA. I thank the gentleman. The gentleman from New Jersey, Mr. Menendez.
Mr. MENENDEZ. Thank you, Mr. Chairman.
I know sometimes it may seem humorous when somebody's bag is seriously delayed, but I assure you that it was not humorous to me, and it is not humorous to the many people who write to me or call and whose baggage is delayed significantly beyond 24 hours and whose business plans or disrupted or their vacations go sour.
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Now, in the case of the particular company that I was traveling on at that time, they did the right thing. But the reality is that I consider that from past experiences with a wide variety of airlines and listening to my constituency more of the exception rather than the rule.
Now, Ms. Hallett, I read in your written statement here at the bottom of page three, you say, one of our original 12 commitments included a provision stating that we would make every reasonable effort to return mishandled baggage to the customer within 24 hours. And you go on to say, we have made great progress in doing so.
Now, I look at the Inspector General's response to item number three, make reasonable efforts to return lost luggage within 24 hours. And his finding is that lost baggage did not show up with 24 hours 58 to 91 percent of the time, depending upon the airline. Do you consider that 58 to 91 percent of the time making good progress? What were the figures, then, before you made good progress?
Ms. HALLETT. Mr. Menendez, I have not read the Inspector General's testimony. However, I would point out, and that would be an unacceptable rate. However, I would also point out that the Inspector General, when he testified earlier this year on what kind of a job the airlines had done on all 12 of the commitments, he rated the on-time baggage delivery and making a reasonable effort to return them within 24 hours, he gave us a grade of B.
We believe that we have significantly improved since then. I know that you had a very unpleasant experience. I would hope—
Mr. MENENDEZ. It's not about me, Ms. Hallett. That's only one. Most of the time my experience has been pretty good. But the reality is, it's not about me. I could show you some—would you like to join us in seeing piles of letters, e-mails and phone calls that my staff take that have a much different perception of your reality?
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And I've got a document here that's put out by the Committee. And it says, each of the airline voluntary commitments is listed below, together with the Inspector General's evaluation. Number three, make reasonable efforts to return lost luggage within 24 hours. Finding, lost baggage did not show up within 24 hours 58 to 91 percent of the time, depending on the airline.
Now, at the lowest end, it's 58 percent. I mean that is not good. It's not good that I have to wait or any constituent or your customers have to wait nearly 60 percent of the time to—or in some cases—
Ms. HALLETT. That is incorrect, and if Mr. Mead has placed that information in there, it is incorrect, and I have it right in front of me that in fact, it is 91 percent returns within 24 hours. And so however you came up with 58 percent, I'm perplexed.
Mr. MENENDEZ. Well, what is the figure?
Ms. HALLETT. It's 91 percent.
Mr. MENENDEZ. Within 24 hours?
Ms. HALLETT. Within 24 hours. And this is a summary that has come from—
Mr. MENENDEZ. What are you reading?
Ms. HALLETT. This is the result of the OIG testing. It's the airline customer service commitment compliance. And I will be happy to submit this—
Mr. MENENDEZ. Well, I'd love to see it, because the reality is that all those people who write to me have expressed experiences that exceed far beyond 24 hours.
Ms. HALLETT. Those are Mr. Mead's figures, the 91 percent.
Mr. MENENDEZ. I'm looking at the Committee's findings. Now, maybe they misinterpreted the findings.
Ms. HALLETT. They may have.
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Mr. MENENDEZ. But it says, lost baggage—not my finding, the Committee's finding, the Committee's presentation of a finding of the Inspector General, it says, lost baggage did not show up within 24 hours 58 to 91 percent of the time, depending on the airline.
Ms. HALLETT. We need to find out how they arrived at that. I want to—
Mr. MENENDEZ. Well, what do you think is acceptable? Let me ask you that?
Mr. CARTY. I think either number is acceptable, Congressman. I think 91 percent of the time is clearly a B and we need an A. I think the airlines need to commit to the traveling public and all of you that we're going to do better.
Now, if I could just tell you some of the things that the airlines are doing. I know what American is doing and I know what some of the other airlines are doing. Because I think baggage has been notoriously a problem of customer service and our business. A number of carriers have alluded, and a couple members have alluded to the fact that a number of airlines, including American, including Aloha, have engaged in the undertaking to make sure there is more onboard baggage space. That's commitment number one and we have made a very multi-million dollar commitment to get that done and get it done properly.
We've also, I think, embarked on the deployment of technology that is going to allow us to do a better job of tracking bags, which really is the heart of this problem, I think, Congressman. The fact of the matter is, on any given day there are thousands and thousands of bags out there. And we should be able to deploy technology in a way that will enable us to know where it is, even if because of a bad connection or weather on an inbound trip, the passenger makes the connection but the bag doesn't, we ought to be able, when that passenger gets off the flight, to be able to say to them, Mr. Customer, we're sorry, your bag didn't make the connection, however, we know exactly where it is, it's now on the next flight, it will be here at 9:00 o'clock, we'll deliver it to your hotel, your home, whatever.
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To do that, we are deploying a lot of handheld bag tag readers so that when the bag is being loaded on airplanes we will read the bag, send that to a central data base so we will at least know where it is. And if any bag gets deployed or gets lost and is sitting out some place on a ramp, we can immediately scan it, it will be in the data base, we'll know whose it is, we'll be able to contact the customer.
So we really are starting to deploy those—
Mr. MENENDEZ. I appreciate those efforts, and I think they're worthy. But let me ask you what happens to the individual who, with all your automation and all your efforts, still finds themselves without their bag one, two days? What is their recompense? Would you as an industry be supportive of having a minimum compensation level for people who find themselves at no responsibility of their own to get a minimum level of compensation for significantly delayed baggage? And if not, tell me why.
Ms. HALLETT. Well, first of all, Mr. Menendez, we already do compensate. We do help individuals with an immediate turnaround in terms of buying clothes when the bag is delayed and we know it will not be there within 24 hours. And I was just with a passenger, someone who I do not know, who just had this experience, with one of our member carriers.
Mr. MENENDEZ. And that's across the entire industry.
Mr. CARTY. It's certainly true at American.
Ms. HALLETT. Yes. I can't speak for non-members. But our members by and large, are doing it.
Mr. MENENDEZ. Okay. And what type of compensation is on average what they would receive?
Ms. HALLETT. Well, in this particular case, because they identified the bag would be there—
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Mr. MENENDEZ. Not—not in a particular case—
Mr. CARTY. I can't answer that question.
Mr. MENENDEZ.—I'd love for you to be able to tell the Committee.
Ms. HALLETT. Absolutely. I'll be happy to.
Mr. MENENDEZ. Because you know, from speaking to some of the people who have written to us, sometimes $50 or $100 does not get you, even at K-Mart, enough clothing to sufficiently survive the next day. And if you're traveling with family members, it certainly doesn't do it. And for the business traveler, that's a whole different nightmare as well.
So I'd like to see your response to that.
Also, since the airlines often publicize their on-time performance records and their advertising, and given that you all favor competition, I've heard that in my nine years on this Committee and listening at different times to your testimony, and you want to provide customers the most complete information possible, how would you feel about requiring the airlines to disclose to customers on-time performance and cancellation rates of each flight at the time that they're booked?
Ms. HALLETT. Mr. Menendez, we already make that information available. We have for in excess of 12 years, when the passenger asks for that information. It is also made available immediately on the web site of our members. I would point out that each carrier has different, and Aloha is a good example, has different ways in which they deal with it. It's all not uniform. But this is information that is available.
But to make it very specific, the number of people who actually ask that question is minute. It is amazing how everyone has made this such a big issue when there are so few people who ask.
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Mr. MENENDEZ. Well, then why would you be concerned about offering it? You've given me all the reasons—
Ms. HALLETT. We already offer it.
Mr. MENENDEZ. You don't offer it. You provide it, you tell me, if asked. Why would you be concerned about offering it?
Mr. CARTY. It's a very simple problem, Congressman. We're obviously not shy about providing the information, as Carol says, it's out there. The issue is really the one that Congressman DeFazio talked about, and that is the cost straight out. Very simple problem. We take tens of millions of calls a year, say it's 60 million calls a year asking about flights.
If we add a minute to each of those calls, that's 60 million minutes. Sixty million minutes means we hire 600 to 700 people to answer the call. So now we're adding $50 million to our expense bill. So now we're adding $1 a ticket to our ticket prices.
So when we end up in these debates with folks that are advocating regulatory change, it's not because we're shy about the information. As Carol pointed out, we're ready to offer the data. Where we end up in a debate is whether it's the right thing for our industry, and as a matter of public policy, to drive ticket prices another 50 cents, another $1, for each one of these regulatory pieces you put in place.
Mr. MENENDEZ. I didn't say regulation, I said why wouldn't you be willing to voluntarily offer it?
Mr. CARTY. Whether it's voluntary or regulatory, there's a cost to it. So what we're trying to trade off is value to the customer versus cost to the customer. And again, if you could take an instantaneous vote of every customer who's willing to pay 50 cents, if, whether they're asked or not, we'll tell them about the on-time dependability of their flight, we could do that. But our judgement has been that the customers don't value that to the extent of 50 cents a ticket. So we don't offer it.
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Mr. MENENDEZ. Well, I don't want to take any more time. I just would say to you that a lot of the flights are now booked in an automated process. So you could provide that information up front and you wouldn't need one more individual, you wouldn't need one more agent to do that.
Mr. CARTY. We absolutely have it out on the data base.
Mr. MENENDEZ. So if I do it in an automated process, I will get that information?
Mr. CARTY. You can get that information very easily.
Mr. MENENDEZ. When I call my airline and want to take a flight to wherever, in an automated process, I'm going to get that information, how often the flight is delayed, how often this flight is canceled?
Mr. CARTY. When you make a call or when you get on the internet?
Mr. MENENDEZ. When I make a call?
Mr. CARTY. When you make a call, now you're talking about elongating the call again. That's why we don't voluntarily—
Mr. MENENDEZ. But in an automated system, why would it matter? It would only matter to me how much time I want to spend on it. It wouldn't take another one person, human being, to provide that information.
Mr. CARTY. To provide information—
Mr. MENENDEZ. On an automated call?
Mr. CARTY. You're talking about an automated voice response. Again, if we thought anybody would use it, we'd set up an automated response system. We put out an automated system to inform passengers of delays.
Mr. MENENDEZ. If people knew that asked, because getting to a location on time, especially for business travelers, is an extremely important thing. And knowing the frequency of cancellation, knowing the frequency of delay of that flight, is I think incredibly important to the flying public.
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Mr. CARTY. I would suggest to you, the Congressman earlier that suggested looking at the weather channel will give you more reliable information about the likelihood of the flight being delayed or not. I guarantee you that's better information.
Mr. MENENDEZ. Thank God I don't direct my life by the weather channel.
Thank you, Mr. Chairman.
Mr. MICA. I thank the gentleman. Let me yield now to the former Chairman of the Subcommittee, the gentleman from Tennessee, Mr. Duncan.
Mr. DUNCAN. Thank you very much, Mr. Chairman, for holding this important hearing, and let me say, I'm sorry that I could not be here for the testimony of the witnesses. I had other meetings.
Let me just say that, you know, if anyone ever loses the desire to improve, it's a sad thing for them and for the people they serve. I hope all the teachers have a desire to become better teachers with each year that they teach. I hope that I'm a better member of Congress than I was two or three years ago, and I hope if I'm fortunate enough to be here four or five years from now, I'm better then.
It's the same way with the airlines. I think that all of you should have the desire and the goal to keep on improving and getting better. But I will say this. I appreciate the job that you all do. I think you do a miraculous job. When you think of carrying 700 million passenge