[Senate Hearing 106-1126]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 106-1126

                        AIRLINE CUSTOMER SERVICE

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 28, 2000

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation




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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington             JOHN D. ROCKEFELLER IV, West 
TRENT LOTT, Mississippi                  Virginia
KAY BAILEY HUTCHISON, Texas          JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine              JOHN B. BREAUX, Louisiana
JOHN ASHCROFT, Missouri              RICHARD H. BRYAN, Nevada
BILL FRIST, Tennessee                BYRON L. DORGAN, North Dakota
SPENCER ABRAHAM, Michigan            RON WYDEN, Oregon
SAM BROWNBACK, Kansas                MAX CLELAND, Georgia
                  Mark Buse, Republican Staff Director
               Ann Choiniere, Republican General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 28, 2000....................................     1
Statement of Senator Bryan.......................................    10
Statement of Senator Burns.......................................     6
Statement of Senator Cleland.....................................    48
Statement of Senator Gorton......................................     9
    Prepared statement...........................................     9
Prepared statement of Senator Hollings...........................    14
Statement of Senator Hutchison...................................     3
Statement of Senator Kerry.......................................     7
Statement of Senator McCain......................................     1
    Prepared statement...........................................     2
Statement of Senator Rockefeller.................................    11
    Prepared statement...........................................    12
Prepared Statement of Senator Snowe..............................    15
Statement of Senator Wyden.......................................     4

                               Witnesses

Mead, Hon. Kenneth M., Inspector General, Department of 
  Transportation, accompanied by: Scott Macey, Project Manager, 
  Airline Customer Service Review, Office of Inspector General, 
  Department of Transportation...................................    17
    Prepared statement of Hon. Kenneth M. Mead...................    22
Statement of Donald J. Carty, Chairman, President, and Chief 
  Executive Officer, American Airlines, and Chairman, Executive 
  Committee, Air Transport Association of America, accompanied 
  by: Mary Jopplin, Senior Director for Customer Service, 
  Continental Airlines; Vicki Escarra, Executive Vice President 
  for Customer Service, Delta Air Lines; and Mark Dupont, 
  Managing Director of Customer Services, American Airlines......    29
    Prepared statement of Donald J. Carty........................    32
    Prepared statement of Mary Jopplin...........................    43

                                Appendix

Response to written questions submitted to Hon. Kenneth M. Mead 
  by:
    Hon. Slade Gorton............................................    57
    Hon. John McCain.............................................    59

 
                        AIRLINE CUSTOMER SERVICE

                              ----------                              


                        WEDNESDAY, JUNE 28, 2000

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:29 a.m. in room 
SR-253, Russell Senate Office Building, Hon. John McCain, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    The Chairman. Good morning. I want to apologize ahead of 
time to the witnesses. We have a vote, two votes at 9:45. So we 
will try to get through opening statements and get as much done 
as we can, and then at some point I will have to take a brief 
recess until we come back from the vote. I want to thank all 
the witnesses for being here this morning.
    One year ago, the Commerce Committee approved the Airline 
Passenger Fairness Act, which was enacted into law almost 3 
months ago as part of the FAA Reauthorization Act. The Airline 
Passenger Fairness Act was crafted in response to widespread 
and intense public frustration with airlines' poor customer 
service.
    This legislation gave the airlines an opportunity to 
refocus their attention on basic customer service. The member 
air carriers of the Air Transport Association developed the 
Airline Customer Service Commitment. Pursuant to that industry-
wide initiative, each airline developed its own customer 
service plan. Those plans were scheduled to be implemented 
fully by last December, but I understand that full 
implementation by all airlines did not occur until March of 
this year.
    The legislation directed the Department of Transportation 
Inspector General to report to Congress on the effectiveness of 
the airlines in living up to their Customer Service Commitment. 
The first report is an interim one and is being released today. 
The final report is due in December.
    Although the Inspector General's findings are preliminary, 
the results show mixed success and raise many questions and 
concerns. Unfortunately, the report indicates that the airlines 
still have a long way to go to make significant inroads on the 
customer service front. The good news is that the Inspector 
General's interim report makes several thoughtful suggestions 
to help the carriers' customer plans work. Better yet the 
carriers have time to respond to these suggestions before their 
final report card is in.
    At a minimum, it is necessary for the carriers to heed the 
Inspector General's advice. What is at issue here are basic 
standards of customer service, not dazzling promises designed 
to exceed passengers' expectations. Air travelers need to know 
that the airlines are bending over backward to meet and exceed 
these basic commitments.
    For instance, customers should know that they have 24 hours 
to hold a seat at a quoted fare even if the ticket is non-
refundable. Delays should be communicated when they are known, 
not simply when passengers show up at the gate. And information 
on frequent flyer programs should be useful enough to help 
consumers figure out the likelihood of redeeming their points 
for travel.
    According to the Inspector General, the airlines are quick 
to blame their customers' dissatisfaction on the FAA and the 
air traffic control system. Delays related to bad weather and 
antiquated air traffic control equipment are indeed at the root 
of many customers' complaints. If the airlines truly believe 
that the air traffic control system is at the root of their 
woes, I urge them to throw their weight and momentum behind a 
serious, realistic plan for air traffic control reform.
    As I said last year, I want and expect the airline customer 
service commitment to succeed. But if the airlines' voluntary 
effort falls short, I am committed to moving forward on 
additional, enforceable passenger fairness legislation. The 
Inspector General's December report will weigh heavily on our 
decisions regarding a future course of action. In the meantime, 
I expect the airlines to fully comply with the recommendations 
of the Inspector General.
    Several of my committee colleagues and I have asked the 
Inspector General to go beyond his final report in December and 
continue reporting on the airlines' compliance with their 
voluntary customer service initiatives. I look forward to 
continuing to work with my colleagues on this important issue.
    I would mention to my colleagues again, at 9:45 we have a 
vote. I would like to try to make our opening statements brief 
so we could at least begin the opening statements of the 
witnesses if they would agree.
    Senator Kerry--or were you here first, Ron?
    [The prepared statement of Senator McCain follows:]

   Prepared Statement of Hon. John McCain, U.S. Senator from Arizona

    One year ago, the Commerce Committee approved the Airline Passenger 
Fairness Act, which was enacted into law almost three months ago as 
part of the FAA reauthorization act. The Airline Passenger Fairness Act 
was crafted in response to widespread and intense public frustration 
with airlines' poor customer service.
    Our legislation gave the airlines an opportunity to refocus their 
attention on basic customer service. The member air carriers of the Air 
Transport Association developed the Airline Customer Service 
Commitment. Pursuant to that industry-wide initiative, each airline 
developed its own customer service plan. Those plans were scheduled to 
be implemented fully by last December, but I understand that full 
implementation by all airlines did not occur until March of this year.
    The legislation directed the Department of Transportation Inspector 
General to report to Congress on the effectiveness of the airlines in 
living up to their Customer Service Commitment. The first report is an 
interim one, and is being released today. The final report is due in 
December.
    Although the Inspector General's findings are preliminary, the 
results show mixed success and raise many questions and concerns. 
Unfortunately, the report indicates that the airlines still have a long 
way to go to make significant inroads on the customer service front. 
The good news is that the Inspector General's interim report makes 
several thoughtful suggestions to help the carriers' customer plans 
work. Better yet, the carriers have time to respond to these 
suggestions before their final report card is in.
    At a minimum, it is necessary for the carriers to heed the 
Inspector General's advice. What's at issue here are basic standards of 
customer service, not dazzling promises designed to exceed passengers' 
expectations. Air travelers need to know that the airlines are bending 
over backwards to meet and exceed these basic commitments.
    For instance, customers should know that they have 24 hours to hold 
a seat at a quoted fare, even if the ticket is non-refundable. Delays 
should be communicated when they are known, not simply when the 
passenger shows up at the gate. And information on frequent flyer 
programs should be useful enough to help consumers figure out the 
likelihood of redeeming their points for travel.
    According to the Inspector General, the airlines are quick to blame 
their customers' dissatisfaction on the FAA and the air traffic control 
system. Delays related to bad weather and antiquated air traffic 
control equipment are indeed at the root of many customers' complaints. 
If the airlines truly believe that the air traffic control system is at 
the root of their woes, I urge them to throw their weight and momentum 
behind a serious, realistic plan for air traffic control reform. 
Otherwise, they will just be accused of trying to shift the blame.
    As I said last year, I want and expect the Airline Customer Service 
Commitment to succeed. But if the airlines' voluntary effort falls 
short, I am committed to moving forward on additional, enforceable 
passenger fairness legislation. The Inspector General's December report 
will weigh heavily on our decision regarding a future course of action. 
In the meantime, I expect the airlines to fully comply with the 
recommendations of the Inspector General.
    Several of my Committee colleagues and I have asked the Inspector 
General to go beyond his final report in December, and continue 
reporting on the airlines' compliance with their voluntary customer 
service initiatives. I look forward to continuing to work with my 
colleagues on this important issue.

    Senator Wyden. Mr. Chairman, I have strong feelings about 
it, but I know Senator Hutchison has something that is time-
sensitive.
    The Chairman. Senator Hutchison.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Mr. Chairman.
    I have an amendment on the floor that is going to be voted 
on at 9:45, so Senator Wyden has allowed me to say a couple of 
words, which I appreciate very much. I do want to thank you, 
Mr. Chairman, for holding this hearing on the interim report, 
because I think it is good for the airlines to see what the 
preliminary results are, and to be able to adjust to the 
findings. I think, Mr. Chairman, the approach that you have 
taken in getting everyone to the table and giving fair notice 
and allowing the airlines a chance to respond is a good one.
    I do think that dissatisfaction is up for a variety of 
reasons. Certainly, we know that there are a lot more planes in 
the air and I think the issue of air traffic control systems is 
legitimate. I also believe that there are indications that the 
airlines are doing a somewhat better job of disclosing their 
lowest fares but I think we still need to do more in 
simplifying for the passenger the fare structure and what it 
takes to get the lowest fares.
    Second, I hope that the airlines will continue to strive to 
give more information to passengers. Most passengers will 
understand better what is before them if they are told on a 
frequent basis what the delays are, how long they will be, and 
even looking for other options that might get them to their 
destination on an expedited basis. I know that if the delay is 
caused by weather that that is probably not possible, but 
disclosure of information, I think, helps a lot.
    So, Mr. Chairman, I look forward to hearing from the 
witnesses and I hope that we can take positive steps that would 
avoid the necessity for us to pass laws, but rather inform the 
airlines of what should be done better and let them respond 
without new regulations and new reporting requirements. 
However, if these improvements do not happen, then I think 
legislation is a viable option.
    Thank you.
    The Chairman. Thank you, Senator Hutchison.
    Senator Wyden.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, let 
me thank you especially for all your interest in this and for 
scheduling this hearing this morning.
    I would like to spend just a few minutes outlining the 
significant gaps that our government's investigators found 
between what the airline industry promised its passengers a 
year ago and what the airlines have actually delivered.
    First, on this question of the lowest fare, what the 
Inspector General found is that a majority of this country's 
airlines are not telling the passengers what the lowest fare 
actually is. The way the airlines fudge this up is they try to 
say, well, we will tell you the lowest fare you are eligible 
for, but the fact is that often on the Internet you can get a 
much lower fare. So the bottom line is that, as of today, a 
majority of the nation's airlines are not telling this 
country's passengers what the lowest possible fare that is out 
there actually is.
    Second, the airlines promised that they would notify 
passengers of known cancellations and delays. At page 20 of the 
report, the Inspector General states that flights are often 
indicated as being on time when it is obvious that the flight 
is going to be delayed because the aircraft is not even at the 
gate. The Inspector General found that often there are delays 
of up to 4 hours prior to departure because the airlines are 
not telling the passengers the truth about where the airline is 
and when it is going to leave the gate.
    I think it is especially troubling--and here I will quote 
just from the Inspector General's report--that very often the 
information that is given to the passengers is inaccurate, 
incomplete, or unreliable.
    Third, the airlines pledged that they would return lost 
baggage within 24 hours. The way they fudge this one up is 
essentially by manipulating the clock. Some of the airlines say 
that the pledge kicks in when the lost bags actually show up at 
a destination airport. Others use a different kind of criteria 
such as when the customer files the missing baggage claim.
    I could go on about a variety of these others areas, Mr. 
Chairman, such as the refund pledge. But let me tell you what I 
am most troubled about. It is very clear to me that a majority 
of this country's airlines will not write these commitments to 
the passengers into the contracts of carriage. This is the 
actual fine print, the legalese that protects the consumer.
    [The information referred to follows:]

                                   American Airlines/American Eagle

Customer Service Plan
=======================================================================
Handling of Customer Issues

Customer Relations can be reached at:

                American Airlines Customer Relations
                Mail Drop 2400
                P.O. Box 619612
                Dallas/Ft. Worth Airport, TX 75261-9612
                Fax 817-967-4162

Helpful Suggestions

--Be as specific as possible, including dates and flight numbers
--LProvide all supportive documentation, such as copies of your tickets 
and certificates

_______________________________________________________________________

We take the customer service goals in this plan very seriously. We know 
that you expect nothing less. However, the Customer Service Plan does 
not create contractual or legal rights. Rather, our contractual rights 
and obligations are set out in our conditions of carriage, applicable 
tariffs, and ticket jacket, all of which provide additional details on 
the matters discussed and must be consulted to fully understand your 
rights and our obligations. For example, we are not responsible for any 
special, incidental, or consequential damages for delays, 
cancellations, lost baggage, late refunds, or instances in which we do 
not meet our service goals.

Customer Service Plan
September 15, 1999

    So what I am troubled about is the prospect that, let us 
say we do not have a Chairman like you, Mr. Chairman, who is 
interested in this subject and the Inspector General is no 
longer on the beat; the contracts of carriage do not end up 
giving the consumer any meaningful protection and we are just 
back to business as usual.
    I will wrap up with one last comment with respect to the 
airline industry's position on this. The airlines initially 
said that there really was not any big problem here. They said 
that this situation was largely anecdotal, that consumers were 
bringing us various concerns, but there was not a problem. 
Well, after we accumulated so many instances of that they 
finally said, OK, there is a problem; let us deal with it 
voluntarily.
    Now that the Inspector General has found, as the newspaper 
said this morning, that the airlines are coming up short on 
their own pledges--this is not something that somebody 
independent required, but now that they are coming up short on 
their own pledges--the airline industry has begun to shift the 
blame yet again and as of yesterday they are saying it is air 
traffic control, the FAA, or one thing or another.
    The bottom line it seems to me is we are not going to get 
this job done in terms of protecting passengers until we pass a 
bill that has got some teeth in it and gets passengers good 
information. We are not talking about mandating gourmet meals 
on airplane flights. We are talking about passengers getting 
good, accurate, objective information that these airlines have 
and they are stonewalling and not giving it to the passengers, 
and I think it is outrageous.
    I thank you.
    The Chairman. How do you really feel?
    [Laughter.]
    The Chairman. Senator Burns.

                STATEMENT OF HON. CONRAD BURNS, 
                   U.S. SENATOR FROM MONTANA

    Senator Burns. Thank you, Mr. Chairman, and thank you for 
this hearing.
    I do not know how many hours that you have spent behind a 
ticket counter in an airport. You are looking at a guy that 
has. Any time that you deal with the public, the traveling 
public, it is a special challenge, and it is one that is 
humbling and you learn a lot about how people are and what they 
react to and this type of thing. I worked for Ozark Airlines 
when I first came out of the Marine Corps and that is probably 
the 2 years that I spent in public relations that was really--
you earn your stripes.
    But nonetheless we know that, especially in the air travel 
industry, the competitive nature of it, trying to keep all of 
the loose ends tied together, trying to get them out on time 
and trying to get them to arrive on time with the same luggage 
that they started with--and we have all heard all the stories, 
all the horror stories that you could hear about what happens 
to luggage and this type thing. And I am still confident, I do 
not think it has changed a lot from the time that I was a young 
man working on the ramp, that there is some of those folks down 
there that could tear up shotputs and they just have a knack of 
doing that.
    But nonetheless, for the most part, and if you look at the 
volume and the tonnage, for the most part they do a pretty good 
job.
    If we are to look at this, if we are to look at this as 
government, then I think we should also look at a State like my 
State, who has captive shippers as far as ground transportation 
is concerned, the railroads. We do not get very good service 
there, either, and we pay a higher rate.
    So I am interested to read the report. I am going to. And 
if there are some things that are glaringly being done by the 
airlines that is not in the best interest of the traveling 
public, then I think we should take a look at it. There is no 
doubt about it.
    But for the most part, let us--I just think it is a 
wonderful thing. Now, I know a lot of folks that are elected 
and they go out and they work for a day on different jobs. I 
would suggest you go to the airlines and say, I want to work a 
ticket counter, I want to work a gate as a gate agent just 1 
day, one shift. I am sure that there are folks that would allow 
you to do that.
    So I just think that--now we have got high fuel prices. 
That further complicates things. We should be holding some 
oversight on FAA because we hear them complain about FAA. I 
have a good friend that was director of the FAA that I take 
some advice from and think a lot of, and I think there are some 
things there that could be done. Maybe it should be reformed 
all the way together. We have got the technology to do it and 
the equipment, the know-how, and some days I do not think we do 
a very good job.
    And we do not do a very good job controlling our 
thunderstorms. Maybe Congress can do that, too. I do not think 
so.
    But I just want to throw an element of thought in this 
thing. Whenever we start this dialog, let us make sure that we 
have walked in the other man's shoes before we start talking 
about passing laws and requiring things of an industry that we 
do not take a look at ground transportation, because I will 
tell you there is some things there that could stand a little 
oversight.
    I thank the chairman.
    The Chairman. Thank you.
    I would ask again my colleagues if we could complete our 
opening statements so that when we come back from the vote we 
can begin with the first witness.
    Senator Kerry.

               STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Kerry. Mr. Chairman, thank you. Thank you for doing 
this hearing.
    We hear two points of view, Senator Wyden and Senator 
Burns, and there is truth in both of them, obviously. But I do 
not think anybody here would feel constrained to say that the 
system is not working very well and it is not living up to the 
standards that we expected. Now, I know it is hard, obviously, 
to deal with acts of God, with thunderstorms that suddenly crop 
up and all of a sudden you have got a problem. But I do know 
enough, because I stay current as a pilot and I love to fly and 
I use this air system and I have watched the transition of it 
in the last years, and it is increasingly at risk for a number 
of different reasons.
    The FAA bears some responsibility, there is no question 
about that. We have finally put some funding into that and 
hopefully some things can change.
    But I will tell you, there are just some fundamental 
standards of common sense and basic decency in how people are 
treated that are not being applied. I speak as a user. I went 
out to National Airport about 4 weeks ago, after 4 telephone 
calls from my office by my scheduler prior to leaving within an 
hour to see if my flight was leaving on time. And they said, 
yes, scheduled on time, absolutely, we are all up to speed, you 
go out there.
    I arrive at the airport 6 minutes after one of those phone 
calls was made and the line from the counter through the 
corridor was halfway down the corridor and any dolt could have 
walked in there and said this plane is delayed for hours. I got 
to the counter and indeed I was told: Oh, 2 and a half, 3 hour 
delay.
    Now, in the age when I can sit on an airplane and e-mail my 
office or anywhere in the world on a PalmPilot, it is 
incomprehensible to me that people could not have informed us 
properly in real time as to what was happening. This is a 
matter of executive execution. It is a matter of smart people 
running a show more intelligently in an age of communications 
when there is no excuse for not knowing.
    Now, my stepson this weekend was trying to go from New York 
to California. For six and a half hours, he sat on a runway in 
New York before they even left. You can fly across the great 
pond in that period of time. I have spent 5 hours sitting on 
the runway right here in Washington, D.C. to go to Boston.
    Now, last Thursday I went out for the 9 o'clock flight. 
Congress, somehow we finished our work, several of us got to 
the airport, were told the flight is leaving on time and we 
could board. I get on the flight and the pilot comes on and 
says: Well, the good news is the flight time between here and 
Boston is only 52 minutes; the bad news is the flight is 
canceled, we are not going.
    Why? Well, I could not understand it, so I went and got a 
pilots' briefing. Indeed, there was nothing in the pilots' 
briefing that suggested to me there was that kind of delay. I 
was told: Well, there is a delay in Boston. So I got the 
weather reports for the entire day. I have them.*
---------------------------------------------------------------------------
    * The information referred to has been retained in the Committee 
files.
---------------------------------------------------------------------------
    Senator Kerry. Here is the satellite photography beginning 
at 6:15 a.m., 10:15 a.m., 2:15 p.m., 6:15 p.m., 7:45 p.m.--
there is a little bit of activity down in the south--9:15 p.m., 
a little more activity in the south, nothing in Boston, nothing 
in Washington; and right up to 10:15 p.m.* Then I got the GOES 
satellite and it shows a little bit of thunderstorm activity 
down here in the south, absolutely nothing here. In Boston they 
were reporting 10 miles visibility, 3,000 foot ceiling; in 
Washington a 20,000 foot ceiling, 10 miles visibility, which 
incidentally is the maximum they can report in terms of 
observations.
    Yet the flight was canceled. Now, maybe it is because there 
were only about 25 people left to fly on it and equipment was 
tied up somewhere else in the country and they might not have 
had a plane to leave in the morning, so they made an executive 
decision to keep a plane there. I do not know, but they never 
told us.
    The next morning at 7 a.m. when I got on the flight to get 
to Boston, the pilots from that flight the night before were on 
that flight to go and I asked them, why did we not go? They 
said: We do not have a clue; we cannot tell you; the weather 
was fine, we should have gone.
    Now, this happens--I am going to end, but this happens to 
people all across this country. It is not because I am a 
Senator. It is just I am a user, I am a traveler like everybody 
else. And travelers all over this country are tired of being 
lied to, tired of being told, oh, it is flight traffic control. 
Flight traffic control says it must be the airline equipment. 
The airline equipment people tell you: No, it is the airport 
congestion or it is because they are down to a single runway or 
high wind.
    You hear every kind of excuse. But in the end the loss of 
hours, the loss of productivity, the numbers of extra dollars 
spent on hotel bills for cancellations, and so on and so forth 
are driving people nuts. Already the sort of competition issue 
is on the table in a very significant way in terms of these 
mergers and other issues.
    So I close by simply saying I am beginning not to have 
confidence. I was one of those who fought for compromise. I was 
one of those who fought to let the airlines have a chance to 
prove that good management can change this. And I do not see 
the kind of concerted effort between the FAA and the airlines 
and others that indicates to me that we are not going to have 
to be a little tougher.
    I wait for the final report. I will wait for the final 
report. We have got until December. But there is nothing that 
gives me great confidence that smart people are applying their 
ingenuity to creative means of providing people with greater 
choice and capacity to be treated more decently in this 
process.
    I thank you, Mr. Chairman. I am sorry to go on longer.
    The Chairman. Senator Gorton.

                STATEMENT OF HON. SLADE GORTON, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Gorton. Well, Mr. Chairman, I will put my formal 
statement in the record and just reflect that, beginning a 
couple of years ago and climaxing a year ago, we as well as the 
FAA were getting an increasing number of complaints, some of 
them extraordinarily serious. Some wanted to cure this problem 
by passing a law. The airlines asked to do it voluntarily and 
came up with the commitments that we see sitting before us 
here.
    I think it is really only a relatively few months since 
they have been implemented. But the complaints have been 
increasing during that period of time rather than decreasing. 
It is an automatic American response to say, well, there ought 
to be a law. I am not sure that there ought to be a law and 
that any government entity is going to do any better. But the 
concerns voiced here are real concerns and are a real threat to 
the airlines unless they do do better.
    I think Senator Kerry is correct when he says we ought to 
wait for the final report before we determine what, if any, 
actions should take place next.
    It is not all airlines. Some of it is the FAA. But the 
airlines are the victims of their own success. They are doing 
extremely well. They are carrying more and more passengers 
every year, and that means the burden on them to do things 
right is greater. This hearing itself should be one more in a 
series of wakeup calls.
    [The prepared statement of Senator Gorton follows:]

 Prepared Statement of Hon. Slade Gorton, U.S. Senator from Washington

    I tend to be skeptical of any proposal to regulate an industry. 
Government intervention in any aspect of the marketplace must occur 
only when necessary and under extraordinary circumstances. That is why 
I resisted initial attempts to impose federal customer service 
standards on the airlines. I far preferred the approach taken by the 
Committee last year that gave the airlines a reasonable opportunity to 
make improvements on their own.
    I fully understand the challenges facing the airlines. Deregulation 
of the airline industry, coupled with a booming economy has created 
increased demand for their product. More passengers are flying safely 
than ever before. In 1999, over 635 million passengers took to the 
skies. Planes are packed with passengers as airlines use complicated 
yield management systems designed to fill every possible seat.
    While this is good news for the airlines, and their shareholders, 
this is not such great news for consumers. Passenger complaints are 
reaching record levels. Most of these complaints are based on a 
negative experience that has a significant impact on their travel 
plans. Canceled or delayed flights impact about 20% of all air 
travelers. While this number may seem low compared to the 80% of on 
time arrivals, that leaves roughly 127 million passengers that are 
delayed or stranded annually.
    Whether it is anecdotal horror stories, the increasing number of 
complaints sent to DOT, or public opinion polls, there is widespread 
displeasure with the state of air travel, and all indicators have been 
headed in the wrong direction. Air travel is no longer a luxury, as it 
was before deregulation. It has become a form of long-distance mass 
transit and an essential part of our society and economy. The public 
now expects minimum levels of customer service.
    Some of the blame for these problems may lie with the Federal 
Aviation Administration. Some would even argue that the blame lies with 
Congress, although I don't think that would be wise at this point. 
Especially due to the fact that the recently passed AIR-21 bill 
provides record levels of funding for our aviation system. Although I 
don't feel that the airlines are solely to blame for their woes, they 
must take responsibility for increasing customer dissatisfaction.
    With the issuance of the Inspector General's interim report, we 
have reached the first notable milestone in the review of the airlines' 
efforts to improve customer service since their plans took effect last 
December. The more important milestone will occur in December when the 
IG issues the final report, which will contain a more fully developed 
analysis of the airlines' progress.
    As we will hear today, the results of the IG's testing to date have 
been mixed. I had sincerely hoped that there would be more substantial 
improvement than just mixed results. The airlines have been on notice 
for more than one year that Congress may take stronger action in this 
arena. Although their plans have been in place for six months, the 
airlines have been painfully aware of the problems for much longer.
    My natural resistance to further congressional action on this issue 
is being tested by the airlines. Customer service is usually subject to 
the strong forces of the free market. If customers do not like a 
business's service, they will usually vote with their feet. But the 
airline industry operates in an environment that sets it somewhat 
apart. Too many air travel markets lack multiple competitors and market 
entry can be difficult. When all parts of the system are not subject to 
vigorous competition, the discipline of the market is weakened. In that 
sense, the airline industry may need closer attention than others.
    At the same time, we must not lose sight of everything that the 
airlines do right. Thousands of flights, passengers, and bags are 
handled in a safe, timely, and satisfactory manner each day. Given its 
size and complexity, we have an outstanding air transportation system 
that no other nation can match. But it is a system that is becoming a 
victim of its own success. Aircraft are being filled up more 
efficiently than ever and more flights are filling the skies. The 
system is starting to burst at the seams on several levels. Whenever 
there is greater congestion in any environment, there is likely to be 
greater friction. At such times, sensitivity to customer needs becomes 
more critical.
    I still support fully deregulation of the industry. The less need 
for governmental interference, the better. I am certainly not ready to 
consider any additional action at this time. The IG's final report may 
be a turning point, however. The airlines still have ample time to 
improve their overall performance. I hope they will heed the warning 
signs of potential government interference. If the IG's final report is 
negative, there will be little tolerance of airline claims that they 
need more time.

    The Chairman. Senator Bryan.

              STATEMENT OF HON. RICHARD H. BRYAN, 
                    U.S. SENATOR FROM NEVADA

    Senator Bryan. Thank you very much, Mr. Chairman. Let me 
try to be brief because we have got a vote.
    I think all of us are venting this morning and that is 
because we are frustrated. We are frustrated, not because we 
are Members of Congress, but because we are passengers, we are 
users.
    I think it is fair to say that the system is overloaded in 
terms of volume of passengers. Today, airline travel, to be 
very honest, is not much fun. I mean, the airports are crowded 
and congested. It is a sea of humanity moving from one gate to 
another. That is an issue that is broader than the focus of our 
discussion here this morning.
    But I think what my colleagues are talking about, among 
other things, is No. 2, ``Notify customers of known delays, 
cancellations, and diversions.'' I have traveled back and forth 
from Nevada almost every weekend for the last 12 years. The 
last 4 weeks have been an absolute nightmare, most of it, in 
fairness, weather-related out of Chicago. You cannot account 
for the weather. Nobody that is reasonable and rational holds 
you accountable for that.
    But let me just share a couple of examples. We all share 
anecdotal experiences. In Chicago for a period of 5 hours, 
canceled from one flight to another, probably legitimately. But 
as you look at the monitor, all of a sudden the flight that you 
have been rescheduled on has disappeared from the monitor. What 
has happened? You wait in line to get the answer and they say: 
Oh, that plane has been canceled, too. This cancellation is not 
even on the monitor.
    You will be racing from a session here to the airport. You 
get downstairs. The monitors say the plane is on time. You have 
nearly a cardiac arrest as you are racing to get to the 
counter, and you find out that the plane that you are scheduled 
to depart on has not left its point of origin, it has not even 
arrived. That misinformation on the monitor is something that 
is correctable.
    My wife was the victim of a cancellation last week as she 
was traveling to visit our little granddaughter in Rochester, 
New York. The individual who was at the counter did not even 
have the basic information as to what options were available.
    I would say with great respect, acknowledging all of the 
difficulties that you face, and that not everybody in the 
traveling public is reasonable or rational--we all understand 
that; we are in a line of business in which we deal with the 
public every day. But I must say I do not see any improvement 
since the last time we visited, and I will be anxious to hear 
your response to my comments as well as others.
    Thank you very much, Mr. Chairman.
    The Chairman. Senator Rockefeller.

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Thanks, Mr. Chairman.
    I will put my statement in the record and I agree basically 
with what Senator Gorton said. But I will say that I think 
there have been some improvements, but I do not think they have 
been what I would have expected. The airline folks I hope will 
remember that Senator Gorton and I indicated at our press 
conference that the airlines were going to be given a chance, 
but if there were not going to be improvements there was going 
to be legislation.
    I do not like legislation because I think it is a lousy 
idea. I think we do a lousy job at it. The Congress would 
typically overreact, some people would showboat, and it would 
not be good.
    But I think it is No. 2 and No. 3, on-time baggage 
delivery. I am really, really fed up with slow baggage 
delivery. Not on all airlines. I have seen some improvement. On 
some I have seen some almost what I think is disimprovement.
    But the one group we have not blamed is ourselves, and when 
we talk about the FAA we are talking about ourselves. We are 
the ones who have failed to fund air traffic control. We are 
the ones. The thunderstorms are not just the acts of God. They 
are the acts of what we have not done in order to upgrade 
computer systems to allow all of this to work itself through a 
nationwide system.
    So every one of us are to blame for customers' frustration. 
But the airlines have spent a lot of money and they have made 
some improvements. There are those little mobile units 
traveling here and there to try and please passengers, make 
life more convenient. Those things have happened. There is more 
space in some places. Those are heavily advertised. But the 
question is is the movement moving--is it going fast enough?
    My last point, Mr. Chairman, is that this is an interim 
report. Some will want to jump upon this like it is the final 
report. The final report will come at the end of the year. That 
will be the report that we need to react on.
    Mr. Mead, I congratulate you, sir, on the work that you are 
doing. But this is a serious situation and there is a lot of 
blame to be cast in many directions, perhaps some of it toward 
the airlines' insufficient intensity. Maybe they did not think 
we meant it. Maybe they do not think Slade and I mean it. I do 
not know, but we have got a public to satisfy and we ourselves 
have been very slow in Congress to give tools for all this to 
improve.
    I might say, even though we did do an FAA bill, it is going 
to take several years for it to kick in and be effective, and 
that will cause people to blame airlines where sometimes they 
should be blamed, where sometimes we should be blaming 
ourselves in Congress for having failed to do our duty by the 
nation's air system.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Rockefeller follows:]

          Prepared Statement of Hon. John D. Rockefeller IV, 
                    U.S. Senator from West Virginia

    Thank you, Chairman McCain and Senator Hollings, for 
holding this very timely and important hearing.
    Almost exactly one year ago, the Chairman, Senator 
Hollings, Senator Gorton and I joined together to work with the 
major airlines on a plan to improve customer service. Chairman 
McCain, together with Senator Wyden, had introduced legislation 
to address what seemed to be a burgeoning customer service 
crisis across the country. Congressman Shuster in the House had 
also introduced so-called ``passenger rights'' legislation. And 
Vice President Gore and Secretary Slater led an effort in the 
Administration to do the same.
    Clearly, the American people had spoken about the lousy 
service and unfair treatment they were receiving, and all of us 
in Washington wanted desperately to put something in motion to 
solve the problem.
    The difficulty we ran into is not an uncommon one. It was 
and is the difficulty of coming up with a one-size-fits-all set 
of rules for a highly complex industry. It was and is the 
difficulty of trying to do something that will help consumers 
without micro-managing the running of an airline.
    Telling the carriers that they must announce a delay at 
exactly 20 or 30 minute intervals, regulating the size and 
pitch of airline seats, setting specific definitions for what 
constitutes ``food'' in an emergency, and writing the script 
for the telephone reservation agents seemed to be a bit much--
or at least a bit much for a first step.
    So, instead, we implored the airlines to take the first 
step themselves--to develop a common set of minimum, industry-
wide customer service standards. To acknowledge that their 
service has not kept pace with the surge in air travel in the 
past decade, and to re-commit themselves to the effort.
    Last June, the ATA member carriers came forward with a new 
Airline Customer Service Commitment called ``Customer First.'' 
They promised to do more and to do better--or in some cases 
actually to do at all some of the things they were supposed to 
have been doing all along--for their customers.
    They made 12 customer service promises, ranging from 
quoting the lowest available fare and notifying customers about 
delays, to paying more for lost bags and giving prompt refunds. 
They committed to better treatment for disabled passengers and 
minors; they promised to develop emergency plans for planes and 
passengers stuck on a runway; and they took responsibility for 
assigning senior personnel the responsibility for handling 
complaints within 60 days, among other things.
    They agreed to fully cooperate with the DOT Inspector 
General in a comprehensive, ongoing audit of their efforts and 
their results.
    Some critics immediately declared there was nothing new 
here and that the effort was useless before it even got off the 
ground. Certainly, every one of the items on the commitment 
list was supposed to be being done by at least one of the major 
carriers at least some of the time. And in a few cases, they 
were to have been done by all of the carriers all of the time 
under existing regulations. But none of these commitments were 
a part of the routine practice of all of the airlines and none 
were being implemented in a comprehensive way. None were being 
given priority status at the airlines.
    So, I joined with the Chairman and Subcommittee Chairman 
and Ranking Democrat in supporting the voluntary effort as an 
important and meaningful first step. I saw it as an 
opportunity--not just to avoid legislation and avoid regulatory 
micro-managing, but more importantly to get better results for 
consumers. My hope was that the airlines would take the effort 
seriously, make a major investment of human and financial 
capital in the effort, and actually begin to compete with one 
another in the service arena in ways we haven't really seen 
since deregulation.
    I am grateful to the Inspector General Ken Mead for the 
tremendous effort he and his staff have made in monitoring this 
initiative. I am interested to hear from him at this mid-point 
in the process about how its going--whether the airlines have 
followed through on the commitment and whether there is any 
preliminary feedback on the results.
    I would emphasize the word ``preliminary'' in that context 
because I think it goes without saying that we shouldn't be 
making any grand pronouncements one way or the other before the 
full tests and audits have been completed and the results have 
been analyzed. There is undoubtedly more work to be done and we 
have all made clear that, if the voluntary approach fails, then 
we will have no choice but to consider a regulatory approach.
    I understand that the early signs are mixed and this is an 
opportunity for some dialogue about that. I want the airlines 
to know clearly that this Committee expects them to comply not 
just with the letter of this agreement, but with its spirit.
    And I want to assure the airlines that we in Congress know 
that air traffic control and airport infrastructure deficits 
are a major contributing factor to the customer service 
challenge. With AIR-21 we have finally enacted legislation to 
begin to meet our responsibility in the aviation system, but it 
will take time--a very, very long time--to fix our side of the 
equation.
    Finally, I would like to note before we start today that 
while we must always pay very careful attention to the human 
side of the passenger experience, we shouldn't lose sight of 
the human side of the airline experience. By that I mean the 
tens of thousands of airlines employees who care deeply about 
their jobs and have taken this customer service effort on in 
their day-to-day work lives.
    I would very much regret if the message to employees from 
this hearing or this report is a discouraging one. Gate agents, 
reservationists, flight attendants, baggage handlers and 
mechanics--are the ones on the front lines every day. None of 
us would suggest that these employees, who are themselves also 
airline consumers, want or intend to provide lousy customer 
service.
    Well, these employees must not think that all we in 
Congress have seen in the last year is business as usual. I 
hope, instead, that our message to those on the front lines is, 
first, thank you and, second, stay the course.
    We know you are trying, and in many respects succeeding 
under very challenging circumstances. We know that safety is 
your top priority and that you deliver millions of passengers 
safely every single day. You have tough jobs, and we want you 
to succeed in this customer service effort.

    The Chairman. Thank you, Senator Rockefeller.
    When we return we will begin with you, Mr. Mead. I think it 
is going to be about 5 to 10 minutes because we have 2 votes, 
one that is just concluding now and one beginning.
    I just would make one comment. I have been a member of this 
Committee for 14 years. I know of no time that Congress has not 
funded the request of the FAA for the modernization of the air 
traffic control system. I think it is a scandal the way the 
money has been wasted by the FAA, but I know of no time where 
Congress has withheld funds. In fact, it is remarkable the 
amounts of money that have been wasted in failed efforts to 
modernize our air traffic control system.
    We will have, this Committee will have, a hearing 
concerning the FAA and the failures of the air traffic control 
system in the near future.
    I thank the witnesses for their patience. I apologize for 
the parliamentary procedures that are taking place, and we will 
be back and recommence the hearing as soon as possible. Thank 
you.
    [The prepared statement of Senator Hollings follows:]

            Prepared Statement of Hon. Ernest F. Hollings, 
                    U.S. Senator from South Carolina

    Mr. Chairman, I am glad that we are here to discuss the interim 
findings of the Department of Transportation Inspector General, Mr. 
Mead. Last year, the Chairman worked with other Members of this 
Committee to force the airlines to first admit that service was awful, 
and then to ensure that they began to make changes. Some Members wanted 
to dictate point by point what should be done. Instead, the air 
carriers developed their own ``voluntary agreement,'' which was 
bolstered by legislation increasing the fines on air carriers for 
consumer violations from $1,100 to $2,500 and doubling the baggage 
liability limit to $2,500. Additionally, this legislation also directed 
Mr. Mead to report to us first on whether the carriers had implemented 
the voluntary agreement, and then again in December on the 
effectiveness of the carrier actions.
    On Monday, the Chairman and I, along with Senator Rockefeller and 
Senator Wyden, sent Mr. Mead a letter asking him to continue auditing 
the carrier customer service performance. All of us know that the 
industry has worked hard to improve safety, but we have yet to see the 
result of improved customer service. It is now a little over a year 
since the air carriers signed the voluntary agreement committing to 12 
points of improvement in customer service. While Mr. Mead's report will 
acknowledge that the air carriers have made significant effort towards 
bettering customer service, I will need to be firmly convinced that 
change has occurred. I move through the airports each week. I see the 
long lines, and have experienced them myself. So far, I have not seen 
the benefits of the voluntary agreements.
    I suspect that Mr. Carty, Ms. Escarra and Ms. Jopplin will explain 
that what each of their carriers are doing is making improvements, and 
I know they are spending money to make changes. Continental just got an 
award from Ziff Davis for its service. Delta will show us its new 
screens today, and apparently is investing about a billion dollars in 
customer service items. American has taken rows out of its planes and 
beginning to use new voice technologies at a number of airports, along 
with installing new mobile check-ins at 65 airports. Each of the 
carriers retrained their employees to demonstrate the point that 
consumers matter. I do not know that it will be enough, but it is a 
start.
    Let's look at one area--delays. Why does it come as a surprise to 
air carriers that delays occur? Delays are up 50% since 1995. This is 
not a new phenomenon. I know they happen, the airlines know they 
happen, but many times they are not prepared to handle the 
consequences. Some carriers try to place the blame of delays on the FAA 
and air traffic control; yet, we have thunderstorms every year. We have 
snow storms. We have ATC outages.
    Cancellations increased 68 percent between 1995 and 1999, from 
91,905 to 154,311. At the nation's 28 largest airports, the number of 
flights experiencing taxi-out times of 1 or more hours increased 130%, 
from 17,164 to 39,523, during the same time frame. Despite these 
dramatic numbers, it is the manner of response and accommodation by the 
carriers, no matter the cause of the delay or cancellation, that will 
go a long way to convincing Congress not to legislate. The burden of 
proof is on the carriers. For each of the 12 parts of the voluntary 
agreement, our attitude will remain ``prove it.''
    Delays are often cited as the primary root of customer 
dissatisfaction and certainly, flight problems are the number one 
complaint received by the Department of Transportation. Complaints are 
up 115% for 1999 over 1998, and up 74% for the first 4 months of 2000 
(compared to the same period last year). Although these numbers do not 
reflect the new customer service plans, they do reflect the tremendous 
task of addressing customer dissatisfaction. There was a time when 
businesses courted one with the axiom, ``The customer is always 
right.'' I am sure that we all remember this. In this economy, though, 
it is a sellers' market. There are more than enough customers to go 
around and this goes double for the airline industry. According to the 
FAA Forecast Information, daily enplanements are expected to 
approximately double over last year's figure to more than 1 billion by 
2009.
    In the best scenario, the aviation infrastructure would keep up 
with demand. And certainly, as a national asset, the airspace should be 
modernized and the infrastructure should expand to meet the demands of 
the market. In recognition of this, we passed the FAA Reauthorization 
Act--FAIR 21--unlocking the Trust Fund and increasing the funding for 
infrastructure and modernization of equipment and airspace. But, as 
Rome was not built in a day, neither will the revamping of our airspace 
and infrastructure occur overnight.
    Despite these hurdles, industry has the obligation to provide 
passengers with safe and courteous service. On the latter point, they 
have acknowledged that they have fallen down on the job and they have 
not yet righted the ship. Last summer's voluntary agreement, accepted 
in lieu of legislation, would have prescribed service levels and if 
there is not more significant improvement by Mr. Mead's final report, 
we will be right back at that point. It is inexcusable that passengers 
sit on the tarmac for hours at a stretch and that it is a herculean 
task to work through the paperwork to receive compensation for lost 
luggage. For an industry that is self-described as a customer service 
business, the airlines must do better.

    [The prepared statement of Senator Snowe follows:]

  Prepared Statement of Hon. Olympia J. Snowe, U.S. Senator from Maine

    Thank you, Mr. Chairman, for holding a hearing on this important 
matter. On behalf of the millions of air passengers traveling every 
year, I want to thank you for your attention to this issue.
    Coming from a state which is vastly under served in terms of access 
to air service, I can tell you the air passengers in Maine need some 
protections from a service industry which too often seems to be more 
concerned about the bottom line and profits than the service they 
provide. That is why I became an original cosponsor of legislation 
reported by this Committee last year--the Airline Customer Service 
Commitment Act--which was designed to spur improvements in airline 
customer service. I also fought for provisions in AIR-21, the FAA 
reauthorization bill, to enhance a range of customer service 
protections, including protections for disabled travelers.
    Among the major provisions of the Airline Customer Service 
Commitment Act were requirements to: direct the DOT Inspector General 
to report to Congress on the effectiveness of the airlines in living up 
to their customer service commitments; direct the DOT to increase the 
airlines' financial responsibility to passengers for lost bags; and 
significantly increase the civil penalties against airlines that 
violate aviation consumer protection laws.
    Such customer service improvements are long overdue, Mr. Chairman. 
According to figures from the U.S. Department of Transportation, the 
number of passenger complaints per 100,000 passenger boardings was 26% 
higher in 1998 than the year before. The airlines argue that despite 
the increase in consumer complaints, the actual number of complaints--
roughly 6,000 annually--is relatively low when taking into account the 
approximately 500 million aircraft boardings that occur annually.
    Nevertheless, one customer service survey found that of a list of 
33 major American institutions, only the Internal Revenue Service 
received worse consumer satisfaction ratings than the airline industry. 
And DOT estimates that for every complaint it receives against an 
airline, the airlines themselves receive anywhere from 100 to 400 
complaints. You know things are really bad when the situation has sunk 
to this level . . .
    This is why Congress and the airlines have both taken steps to 
address customer service concerns. Last year, the airlines voluntarily 
entered into a joint agreement to make a range of customer service 
improvements, such as offering the lowest fare available, notifying 
customers of delays, cancellations, and diversions, and being more 
responsive to customer service complaints in general.
    In addition, the FAA reauthorization bill, which was signed into 
law earlier this year, as well as last year's transportation 
appropriations legislation, included provisions designed to bring a 
greater focus to the concerns of air travelers.
    For example, the FAA bill included a provision I authored requiring 
air carriers to notify the purchaser of any expiration date of an 
electronic ticket. The measure also required the DOT IG to monitor the 
implementation of each airline's customer service plan, and evaluate 
and report on how each airline is living up to its commitment. The bill 
also added preventing discrimination against the handicapped as one of 
the responsibilities of the DOT consumer office.
    The FY2000 DOT appropriations legislation included language 
requiring the DOT IG to investigate whether air carriers are engaging 
in unfair and deceptive practices and methods of competition when they 
sell tickets on flights that are already overbooked or offer different 
low fares through different media (such as the telephone or the 
Internet). The IG was also required to report to Congress on the extent 
to which barriers exist to access to comparative price and service 
information from independent resources (such as travel agents) on the 
purchase of airline tickets. In addition, the legislation required the 
IG to report on the extent to which carriers deny travel to airline 
consumers with non-refundable tickets from one carrier to another. 
Finally, the legislation expressed the sense of the Senate that the 
penalty for involuntary ``bumping'' of passengers should be doubled.
    None of this is to say that airlines have an easy job. I understand 
that airlines face significant challenges, including: efforts to 
increase efficiency and at the same time remain profitable; increased 
demand for flights; air travel delays due to inadequate airport and air 
traffic control infrastructure; and a range of other factors.
    In addition, the airlines have a responsibility to their share 
holders. But they also have a responsibility to the public. In my view, 
the airlines need to remember that they must serve the passenger if 
they wish to continue serving the share holder. Because, Mr. Chairman, 
without the passenger, there would not be any share holders.
    In recent years, I have received numerous complaints from 
constituents in Maine who have had horrible experiences while traveling 
on commercial carriers. These experiences do not reflect a real 
commitment on the part of some major airlines to customer service, or 
even an understanding of what travelers expect.
    I believe that customer service requires a real commitment--that, 
for example, your bags arrive at your destination sometime around the 
time you do. While it is preferable to have those bags arrive 
simultaneously with you, it would be nice to at least have them within 
24 hours of your arrival.
    Is it too much to ask that your bags arrive within a reasonable 
period of time after you do . . . ? Is it too much to ask that you 
arrive at your destination without having to be held prisoner by the 
airlines . . . ? Is it too much to ask that you be able to redeem 
frequent flyer miles for a ticket without unreasonable restrictions . . 
. ?
    I hope we can explore some of these issues and concerns today. I 
look forward in particular to hearing from the DOT IG on the results of 
the work they have been doing in this area. And I firmly believe that 
we must act on the findings of the IG, in order to ensure that the 
airlines improve customer service in real, tangible ways.
    Thank you, Mr. Chairman.

    [Recess.]
    The Chairman. The hearing will reconvene. The hearing will 
reconvene.
    We would like to begin with the Honorable Ken Mead. But 
before we do, I notice that we have some other people at the 
table who obviously are here to add to this hearing, so 
perhaps, in addition to Mr. Carty and Mr. Mead, perhaps we 
could have for the record the other people at the table 
identify themselves. We will begin with you, Mr. Dupont.
    Mr. Dupont. Yes. I am Mark Dupont. I work with American 
Airlines as the Managing Director of the Customer Services and 
the Liaison for the Customer Services Plan for American.
    The Chairman. Welcome. Mr. Macey.
    Mr. Macey. Hello. I am Scott Macey. I am with the 
Department of Transportation Office of Inspector General. I am 
the Project Manager for this review.
    The Chairman. Ms. Escarra.
    Ms. Escarra. Good morning. I am Vicki Escarra, Executive 
Vice President for Delta Air Lines. I have responsibility for 
45,000 of the front line men and women who are in charge of 
customer service.
    The Chairman. And Ms. Jopplin.
    Ms. Jopplin. Good morning. I am Mary Jopplin. I am the 
Director of Customer Service for Continental Airlines and I 
have been the Customer First liaison on behalf of Continental.
    The Chairman. Welcome to all of you.
    The Chairman. Mr. Mead, welcome back before the Committee.

     STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL, 
  DEPARTMENT OF TRANSPORTATION, ACCOMPANIED BY: SCOTT MACEY, 
  PROJECT MANAGER, AIRLINE CUSTOMER SERVICE REVIEW, OFFICE OF 
        INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Thank you, Mr. Chairman.
    I am not going to repeat ground that you have already been 
over. I appreciate the opportunity to be here today. I know 
this is a very sensitive review on a subject that can at times 
be very controversial. I want to note right up front, before I 
get into the meat and the substance of this, that the airlines 
agreed with you to cooperate in our review and now, 6, 7 months 
into it, I want to note that the airlines as well as the Air 
Transport Association cooperated fully with us in doing our 
work. I think that is an important note and tone to set here.
    Also, I would ask that the report that we are issuing be 
submitted for the record.*
---------------------------------------------------------------------------
    * The information referred to has been retained in the Committee 
files and is available on the web at www.oig.dot.gov/
show_pdf.php?id=48.
---------------------------------------------------------------------------
    The Chairman. Without objection.
    Mr. Mead. Thank you, sir.
    As shown in this chart in front of me, the commitment 
addresses such matters as improved communication with 
passengers, quoting the lowest available airfare for which you 
are eligible, timely return of luggage, allowing reservations 
to be held or canceled without penalty, and meeting passengers' 
essential needs during long on-board delays.
    Overall, in our testing to date we have found that the 
airlines are making a clear and genuine effort at strengthening 
the attention paid to customer service, but bottom line results 
are mixed. The airlines have a long way to go to restore 
customer confidence.
    The Chairman. Could I ask that we move that in a way that 
all Members of the Committee--maybe we want to put it over 
there, so that all Members of the Committee can see that chart. 
Maybe our staff can help out here.
    Is that chart relevant to your presentation?
    Mr. Mead. Yes, sir. I am going to refer to it just once, so 
he can probably just hold this up when I come to it.
    The Chairman. OK.
    Mr. Mead. I want to say also that certain factors in 
determining the overall quality of customer service were not 
covered in the commitment or the plans, but the airlines have 
implemented other initiatives to improve customer comfort and 
convenience. I will let the airlines speak for themselves on 
what those initiatives that went beyond the commitments are, 
but I want to point out that I think the reason that they did 
some of these other initiatives--one of them is additional leg 
room--was competition, the force of competition, which is an 
underpinning of our system.
    I also want to point out that the commitment does not 
directly address underlying reasons for customer 
dissatisfaction, such as extensive flight delays and 
cancellations, baggage not showing up on arrival, long check-in 
lines, and high fares in certain markets. In our opinion, until 
those areas are effectively addressed by the airlines, FAA, and 
a host of others, there will continue to be widespread 
discontent among the traveling public.
    Now, I would like you to focus on this chart for a minute. 
Can everybody see it? Can the members see it?
    The Chairman. Yes.
    Mr. Mead. The increases in flight delays and cancellations 
have fueled customer dissatisfaction. I know you have heard 
that before, but I want to share with you a couple of 
statistics that are quite telling about what has happened over 
the past 5 years. Cancellations have increased 68 percent in 
the last 5 years. What this chart shows is that at the 28 
largest airports, the number of flights experiencing taxi-out 
times of 1 hour or more increased from about 17,000 to nearly 
40,000, which is a whopping 130 percent increase.
    The Chairman. How do you account for the drop between 1996 
and 1997?
    Mr. Mead. I would have to get back to you on that.
    The Chairman. I was just curious if there were some 
upgrades in the system or what. It does not matter, it does not 
matter.
    Mr. Mead. Those figures represent the point in time after 
the plane left the gate and basically reflect the time spent on 
the runway after departure.
    The Chairman. So on-time takeoff and landing is somewhat 
skewed by these numbers.
    Mr. Mead. Yes, as is the legal definition of what an on-
time departure is. An on-time departure is backing away from 
the gate within 15 minutes or less of the scheduled departure 
time. If you leave 14\1/2\ minutes late, you are on an on-time 
departure. The fact that you may spend 3 or 4 hours on that 
runway is not germane to the on-time departure statistic.
    I would like to cover complaints for a moment. DOT has 
ranked flight problems as the number one air travel complaint. 
I do not think that is surprising. Customer care and baggage 
complaints ranked as number two and number three.
    Senator Kerry. Just a quick one. Who sets that standard of 
on-time? Is that industry-set?
    Mr. Mead. No, that is a regulatory standard. I do not think 
it is anything Congress came up with. I think it is a 
regulatory standard. And I am not sure when it was first 
established that people appreciated what the implications were 
going to be over time.
    I think that backing away from the gate is probably a 
legitimate measure for the airlines to use internally, but to 
tell the American public that you have had an on-time departure 
when you are sitting on the runway for 2 hours is absurd. So it 
can be changed by regulation. In fact, we issued a report a 
couple years ago suggesting that that be done.
    The Chairman. Well, I hope we will take that suggestion 
more seriously.
    Mr. Mead. Anyway, the top complaints are flight problems, 
customer care, and baggage. They account for roughly 70 percent 
of the complaints received by DOT, which have really been 
increasing. The complaints doubled in 1999. You already heard 
that. The track record for 2000, at least for DOT, is they are 
going to exceed the number that were filed in 1999.
    Now, you will hear that the Internet is responsible for 
that. In part it is, but I think we ignore the increase in 
those numbers at our peril. They are clearly an indication of 
widespread discontent.
    The commitment and the airlines' plans for implementing 
them, implementing the commitment, were essentially a 
commitment to substantially re-emphasize attention, resources, 
and focus on customer service. The corporate board rooms of the 
airlines realized that improvements were needed in the way 
passengers were treated. I think a number of the CEO's will 
tell you that the commitments were a good thing and that the 
prompting that led up to that was necessary.
    Two of the provisions of the commitment were new policy. 
The commitment to hold a non-refundable reservation for 24 
hours without penalty and the increase in the baggage liability 
limit. The 24-hour hold provision was completely new. As for 
the remaining ten provisions, the airlines agreed to focus on 
better execution of customer service policies and procedures. 
Many were required by law, regulation, under the airlines' 
contract of carriage or were part of the airlines' operating 
policies. The baggage liability limit was the other new one. 
That increased from $1250 to $2500.
    A few of the provisions had subsets that provided new 
policies, such as notifying customers in a timely manner of the 
best available information regarding delays, making every 
reasonable effort to return checked bags within 24 hours, 
issuing an annual report on frequent flyer mile redemptions, 
and providing information regarding aircraft configuration like 
seat width and leg room.
    The preliminary results on the implementation of the 
commitment and plans are mixed. We identified some areas that 
appear to be working well, but also areas that need 
improvement. For example--and I will just provide some 
highlights here--the airlines pledged to offer the lowest fare 
available. Actually, this means the lowest fare available via 
the telephone. Testing of this provision showed that the 
airlines were usually offering the lowest fare available via 
the telephone.
    But there were a sufficient number of exceptions that we 
think this is an area the airlines need to pay special 
attention to. I want to note that the problems we identified 
were not deliberate on the part of the airlines. They were due 
to employees not following established procedures.
    Also, the airlines need to disclose when you call up on the 
phone that the lowest fare available over the phone is not 
necessarily the airline's lowest available fare. Some airlines 
already do this, others do not.
    Notify customers of known delays, cancellations, and 
diversions. We found that the airlines were making a clear and 
substantial effort, both at the airport and on board the 
aircraft, to improve the frequency of communication with 
customers about delays and cancellations. They were also making 
technology investments in communications equipment and in media 
displays that are germane to this particular commitment. But we 
found major room for improvement in the accuracy, reliability, 
and timeliness of the airlines' communications to customers 
about the status of flights.
    So what we have is a very substantial effort to communicate 
more information, and to communicate more frequently, but the 
content of the information needs to be improved.
    We found several airlines repeatedly pointing to air 
traffic control as the problem. Some would point to FAA by 
name. And in a number of these cases, the delay was due to 
extremely bad weather, crew not available, or maintenance 
problems. Sometimes the plane was not there and it was delayed 
getting there by a storm, and I suppose some of the airlines 
think that air traffic control can deal with all manner of 
weather.
    We think the airlines that have not already done so ought 
to establish systems for notifying passengers before they show 
up at the airport of cancellations and extended delays.
    On-time baggage delivery. Passengers expect to find their 
checked baggage on arrival, but this commitment actually does 
not deal with that, but with the misrouted or delayed baggage 
and its return within 24 hours. We found that the airlines were 
not consistent in what ``within 24 hours'' means and they need 
a formal definition. For instance, some airlines started this 
24-hour clock when a passenger filed a missing bag claim, which 
I think is probably the right time to start the clock; others 
only after the bag showed up at the destination airport.
    Allow reservations to be held or canceled. As I said 
before, this is a completely new customer service commitment 
and it applies to otherwise non-refundable tickets. It should 
be real popular with the consumer. Essentially, it allows the 
customer to hold a telephone reservation without payment for 24 
hours or cancel a paid reservation without penalty for up to 24 
hours. It is up to the airline which one of those two options 
it picks.
    Our preliminary testing shows that with a few exceptions 
the airlines were living up to that commitment, but where a 
ticket purchase was required the reservation agents typically 
did not tell us that we could receive a refund if the 
reservation was canceled within 24 hours. We do not think the 
customer should have to ask if this option is available. We 
think the airline should affirmatively disclose it, and that in 
fact is the policy of a number of airlines.
    Provide prompt ticket refunds. Essentially, the airlines 
agreed to comply with existing law here and we did not find 
compliance problems with this commitment.
    Properly accommodate disabled and special needs passengers. 
I am not reporting results on this today, Mr. Chairman, because 
we are working with groups representing these passengers to 
collect their views and we feel that the benefit of their 
expertise will be invaluable, and we have not gotten a complete 
portfolio of these views yet.
    Meeting customers' essential needs during long on-board 
aircraft delays. This provision and the plans to implement it, 
they use general terms like ``food,'' ``make every reasonable 
effort,'' ``for an extended period of time,'' or ``emergency'' 
in meeting passenger needs. These terms do not provide the 
passenger with a clear understanding of what to expect and 
these terms and provisions need to be clarified.
    In addition, in our initial checks less than half the 
airlines had comprehensive customer service contingency plans 
in place for handling extended delays on board aircraft. All 
the airlines now tell us that they have them in place and we 
have to go out and verify airline by airline that that is in 
fact the case. We found examples where the airlines have 
invested in such things as air stairs and have secured special 
backup supplies of food and beverages.
    Handle bumped passengers with fairness and consistency. We 
found several inconsistencies and ambiguities between the 
check-in times in the airlines' plans and those identified on 
the airlines' contracts of carriage. For example, in its 
contract of carriage one airline says that passengers must 
check in 10 minutes prior to the flight's scheduled departure, 
but on the customer's receipt the check-in time is stated as 20 
minutes. Check-in times also vary from airline to airline.
    The reason check-in time is relevant is because he or she 
who gets there last is the first to get bumped. So it is 
important that you know what time you are supposed to check in.
    Be more responsive to customer complaints. It seemed to us 
that the airlines appear to be taking this commitment 
seriously. That does not mean that customers get a satisfactory 
response that takes care of all their concerns, but it does 
mean that they are getting substantive responses and they are 
getting them usually well within 60 days. The commitment 
specifies 60 days. They are clearly more than just mere 
acknowledgments that we received your complaint, we are sorry 
you had an unfortunate flight experience. They are much more 
meaty than that.
    Now, a key to the success of these plans is the need for 
each airline to have a credible tracking system in place. This 
is to check compliance with their plan. It should be buttressed 
by performance goals and measures. The reason this is important 
is because in the long term you do not want to rely on the 
Inspector General to have the only tracking system. You want 
the airlines to track their performance independently.
    Initially, most of the airlines did not have one in place. 
They gave us assurances that they would put one in place and we 
will verify that. We expect, for example, that when we go out 
we will be able to see how good they are doing on returning 
lost bags within 24 hours to the customer.
    We found that the airlines also need to train non-airline 
employees, like skycaps or security personnel, on the airlines' 
policies and procedures for customer service, since these 
individuals are often mistaken for airline employees. Yet these 
individuals have duties that interface with the execution and 
implementation of customer service plans, and the public cannot 
reasonably be expected to differentiate between those people 
who are airline employees and those who are not if both 
individuals are responsible for implementing the plan. Five 
airlines told us they do not plan to train the non-airline 
employees.
    Also, the commitments in the airlines' plans, while 
promising customer service standards, do not necessarily 
translate into legally enforceable passenger rights. Each air 
carrier has a contract of carriage, which is the enforceable 
document that defines your rights. At present it is uncertain 
whether an airline's plan is binding and enforceable on the 
airline. Why is that? Well, one airline states right in the 
plan that it takes the customer commitments very seriously, but 
the plan does not create contractual or legal rights.
    So to resolve this question the airlines could incorporate 
all the details of their plans right in the contract of 
carriage. But based on our results thus far, we are concerned 
that, without direction to the contrary, the modified contracts 
of carriage might be more restrictive to consumers than 
envisioned in the plans. For example, in the critical area of 
when an airline will provide overnight accommodations, we found 
a contract of carriage that includes restrictions and 
limitations not found in the commitment or plan. Whereas the 
plan said that they will accommodate people overnight if the 
delay is occasioned by airline operations, the contract of 
carriage was much more limited and said we will accommodate you 
overnight if you are diverted overnight to some other airport 
that you had not planned to go to.
    Finally, an important issue facing this Committee, I think 
facing the appropriators, and facing the DOT is DOT's capacity 
to enforce existing customer service regulations, given the 
workload. Staff responsible for overseeing and enforcing air 
travel consumer protection requirements have declined from 40 
to 17 during a period of air traffic growth, more than a 
doubling of complaints, and additional consumer protection 
requirements.
    Back when air travel was not so problematic, you had 40 
people out there at DOT that were charged with enforcing all 
the consumer protection laws and now we are down to 17. We have 
serious concerns, given this situation, about the capacity of 
the office at DOT to handle this workload in a responsible 
manner.
    Mr. Chairman, that concludes our oral statement.
    [The prepared statement of Mr. Mead follows:]

    Prepared Statement of Hon. Kenneth M. Mead, Inspector General, 
                      Department of Transportation

Mr. Chairman and Members of the Committee:

    We appreciate the opportunity to discuss airline customer service 
and the efforts taken by the airlines to improve customer service. 
Concerned over increasing complaints in air travel, compounded by the 
Detroit airport incident of January 1999, when hundreds of passengers 
were stuck in planes on snowbound runways for up to 8\1/2\ hours, 
Congress considered whether to enact a ``passenger bill of rights.'' 
Hearings were held in both the House and Senate to discuss the 
treatment of aviation passengers and specifically the ``passenger bill 
of rights.''
    Congress, the Department of Transportation (DOT), and the Air 
Transport Association (ATA) agreed that, for the time being, 
legislation would not be necessary. Instead, ATA and 14 of its member 
airlines (Airlines) executed a document on June 17, 1999, known as the 
Airline Customer Service Commitment (the Commitment), to demonstrate 
the Airlines' ongoing dedication to improving air travel. The 
Commitment includes 12 provisions. Each Airline would prepare a 
Customer Service Plan (Plan) implementing the Commitment. The Airlines 
also agreed to cooperate fully in any request from Congress for 
periodic review of compliance with the Commitment, and we would like to 
thank them for cooperating fully with us during our review.

----------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------
The Airlines Commit to:

 1. Offer the lowest fare available

 2. Notify customers of known delays, cancellations, and diversions

 3. On-time baggage delivery

 4. Support an increase in the baggage liability limit

 5. Allow reservations to be held or canceled

 6. Provide prompt ticket refunds

 7. Properly accommodate disabled and special needs passengers

 8. Meet customers' essential needs during long on-aircraft delays

 9. Handle ``bumped'' passengers with fairness and consistency

10. Disclose travel itinerary, cancellation policies, frequent flyer rules, and aircraft configuration

11. Ensure good customer service from code-share partners

12. Be more responsive to customer complaints]
----------------------------------------------------------------------------------------------------------------


    Today, I would like to address three issues: (1) preliminary 
results on the implementation of the Commitment and Plans, (2) 
improvements needed by the Airlines to ensure the success of their 
Plans, and (3) changes to the contract of carriage.
    Overall, the Airlines are at the 6-month point in implementing 
their Plans. We reported our preliminary results in our Interim Report 
on Airline Customer Service Commitment\1\, which we request be included 
for the record. We will issue a final report by December 31, 2000, on 
the effectiveness of the Airlines' Plans to improve customer service, 
including recommendations for improving accountability, enforcement, 
and protections afforded to commercial air passengers. By December the 
Airlines will have had a full year in which to fully implement their 
Plans, and we will be better able to judge the results.
---------------------------------------------------------------------------
    \1\ Report Number AV-2000-102 issued June 27, 2000.
---------------------------------------------------------------------------
    In our initial observations and testing, we found the Airlines are 
making a clear and genuine effort at strengthening the attention paid 
to customer service, but bottom-line results are mixed, and the 
Airlines have a ways to go to restore customer confidence. The results 
include areas where the Airlines can improve upon disclosures provided 
passengers, such as fare and refund availability, and required check-in 
times.
    The Commitment addresses such matters as improved communication 
with passengers, quoting the lowest available airfare, timely return of 
misrouted or delayed baggage, allowing reservations to be held or 
canceled without penalty, providing prompt ticket refunds, and meeting 
passengers' essential needs during long on-board delays. However, the 
Commitment does not directly address underlying reasons for customer 
dissatisfaction, such as extensive flight delays, baggage not showing 
up on arrival, long check-in lines, and high fares in certain markets. 
In our opinion, until these areas are effectively addressed by the 
Airlines, FAA, and others, there will continue to be discontent among 
air travelers.
    Although certain factors in determining the overall quality of 
Airline customer service were not covered in the Commitment or the 
Airlines' Plans, the Airlines have implemented other initiatives to 
improve customer comfort and convenience. These initiatives include 
reconfiguring airplanes to increase the room between rows of seats and 
replacing overhead luggage compartments with large, easier to use bins.
    We also noted several other important factors concerning customer 
service. Each Airline needs to have a credible tracking system for 
compliance with the Commitment. The Airlines also need to ensure that 
non-Airline employees who interact with passengers are trained on the 
Airlines' Plans because non-Airline personnel are often mistaken for 
Airline employees. We found that some Airlines' contracts of carriage 
terms were less advantageous to passengers than the provisions found in 
the Airlines' Plans. Finally, we are concerned that oversight and 
enforcement expectations for DOT, the agency responsible for airline 
consumer protection, may significantly exceed its capacity to handle 
the workload, since staff has significantly declined over the years.

Increase in Flight Delays and Cancellations Fuel Customer 
        Dissatisfaction
    Air travel has doubled since 1980. With this growth has come growth 
in delays and cancellations, and customer dissatisfaction with air 
carrier customer service. Delays, as measured by the Federal Aviation 
Administration (FAA), have increased by over 50 percent, and 
cancellations have increased 68 percent in the last 5 years.
    Much of the delay is occurring on the ground in the form of longer 
taxi-out and taxi-in times (taxi-out is the time between an aircraft 
departing the gate and taking off, taxi-in is the time between landing 
and reaching a gate). At the 28 largest U.S. airports, the number of 
flights experiencing taxi-out times of 1 hour or more increased 130 
percent between 1995 and 1999, from 17,164 to 39,523.
    The 1999 DOT Air Travel Consumer Report disclosed that consumer 
complaints against U.S. air carriers more than doubled in 1999 over the 
prior year, from 7,980 to 17,381. Complaints for the first 4 months of 
2000 increased 74 percent (3,985 to 6,916) over complaints during the 
same period in 1999.
    While a contributing factor to the increase in air traveler 
complaints is undoubtedly the ease of making a complaint to DOT via the 
Internet, the number of complaints and the increase during the first 4 
months of 2000 cannot be ignored. They signal a high degree of consumer 
dissatisfaction with air carrier service that must be addressed.




    Over the last several years, DOT has ranked flight problems 
(delays, cancellations and missed connections) as the number one air 
traveler complaint, with customer care (such as the treatment of 
delayed passengers) and baggage complaints ranked as either number two 
or number three. As depicted by the chart, 1999 data show that these 
three types of complaints account for nearly 70 percent of all 
complaints received by DOT against U.S. air carriers.

Preliminary Results on Implementation of the Commitment and Plans Are 
        Mixed
    The Commitment and the Airlines' Plans for implementing it were 
essentially a commitment to place substantially greater emphasis, 
attention and resources on customer service. The Airlines realized they 
needed to improve the way they treat passengers and that good customer 
service begins with the successful execution of, and continuous 
improvement to, existing customer service policies and procedures, 
programs and plans, as well as systems and technologies.
    In developing the Commitment, the Airlines included two provisions 
that constituted new policy. The provision to either hold a reservation 
without payment for 24 hours or (at the Airline's choice) cancel a paid 
reservation within 24 hours without penalty is a new service the 
Airlines are providing. Another new provision was to support the 
increase in the baggage liability limit from $1,250 to $2,500, which 
became effective January 18, 2000.
    As for the remaining 10 provisions in the Commitment, the Airlines 
agreed to focus on better execution of customer service policies and 
procedures, many required by law or regulation, required under the 
Airlines' contracts of carriage, or part of Airline operating policy. A 
few of these provisions had subsets that provided new policies such as 
notifying customers in a timely manner of the best available 
information regarding known delays, cancellations and diversions; 
making every reasonable effort to return checked bags within 24 hours; 
issuing an annual report on frequent flyer redemption programs; and 
providing information regarding aircraft configuration (seat width and 
leg room).
    Our interim results are based on visits to the Airlines' corporate 
headquarters and other key facilities, and review of Airline policies 
and procedures before and after implementation of the Commitment. This 
allowed us to evaluate what impact the formal Commitment had on the 
Airlines' customer service. We also reviewed each of the 14 Airlines' 
Plans and contracts of carriage to determine whether the provisions of 
the Commitment have been incorporated into these documents. To date, we 
have visited 25 domestic airports to observe and test portions of the 
individual Airlines' Plans that are in place. We are continuing to test 
the effectiveness of the Commitment and will provide our results in our 
final report. To date, our preliminary results have identified areas 
that appear to be working well, as well as areas for improvement, as 
illustrated in the following examples.

   Offer the lowest fare available--The Airlines agreed to 
        offer, through their telephone reservation systems, the lowest 
        fare available for which the customer is eligible. However, 
        Airlines did not commit to guaranteeing the customer that the 
        quoted fare is the lowest fare the Airline has to offer. There 
        may be lower fares available through the Airlines' Internet 
        sites that are not available through the Airlines' telephone 
        reservation systems.
      We found six Airlines enhanced the provision by (1) offering the 
        lowest fare for reservations made at their city ticket offices 
        and airport customer service counters, not just through the 
        Airlines' telephone reservation systems; or (2) requiring their 
        reservation agents to query the customer about the flexibility 
        of their itinerary in terms of travel dates, airports and 
        travel times to find the lowest fare available; or (3) 
        notifying the customer through an on-hold message that lower 
        fares may be available through other distribution sources and 
        during different travel times.
      Testing of this provision showed that Airline telephone agents 
        were usually offering the lowest available fare for which we 
        were eligible, but there were a sufficient number of exceptions 
        to this that it is an area to which the Airlines should pay 
        special attention. The problems we identified were not 
        deliberate on the part of the Airlines, but were due to 
        employees not following established procedures.

   Notify customers of known delays, cancellations, and 
        diversions--For the most part, we found the Airlines were 
        making a significant effort, both at the airport and on-board 
        aircraft, to improve the frequency of communication with 
        customers about delays and cancellations. These improvements 
        include investments in various communication technologies and 
        media as well as more frequent announcements to customers. 
        However, we also found major room for improvement in the 
        accuracy, reliability, and timeliness of the Airlines' 
        communications to customers about the status of flights. For 
        example, several Airlines pointed to the air traffic control 
        system as the reason for delays, even in cases of extremely bad 
        weather, crew unavailability, or maintenance problems.
      Additionally, with respect to delays, cancellations and 
        diversions, we found the Airlines are promising the consumer 
        more in their Plans than they guarantee in their contracts of 
        carriage. For example, with one exception, the Airlines' Plans 
        provide accommodations for passengers put in an overnight 
        status due to cancellations or delays caused by Airline 
        operations. However, only two Airlines provide for this in 
        their contracts of carriage.
      We suggested the Airlines improve the lines of communication and 
        streamline the flow of accurate and reliable information 
        between (1) FAA and the Airlines' Operations Control Centers, 
        and (2) the Airlines' Operations Control Centers and frontline 
        personnel who deal directly with passengers. We also suggested 
        that the Airlines consider making their contracts of carriage 
        consistent with their Plans to clarify the customers' rights 
        when put in an overnight situation due to delays, 
        cancellations, or diversions.

   On-time baggage delivery--Passengers expect to find their 
        checked baggage upon arrival at their destination airports, but 
        this provision actually deals with the delivery of misrouted or 
        delayed baggage. The Airlines committed to return the misrouted 
        or delayed bag to the passenger ``within 24 hours.'' We found 
        that the Airlines were not consistent in their Plans when 
        defining what constituted ``within 24 hours.'' For instance, 
        some Airlines started the 24-hour clock when a passenger filed 
        a missing bag claim and others only after the bag arrived at 
        the destination airport. We have also found examples where 
        Airlines have invested in advanced baggage scanning 
        technologies to facilitate the return of baggage or increased 
        staff resources for processing claims.
      The Airlines should consider committing to returning unclaimed 
        and lost checked baggage to customers within 24 hours of 
        receipt of a customer's claim. The filing of a claim is when a 
        customer would reasonably expect the 24 hours to begin. Also, 
        those Airlines that have not already done so should consider 
        providing a toll-free telephone number for customers to call to 
        check on the status of their bags.

   Allow reservations to be held or canceled--This is a 
        completely new customer service commitment, which allows the 
        customer either to hold a telephone reservation without payment 
        for 24 hours or (at the Airline's option) cancel a paid 
        reservation without penalty for up to 24 hours. This provision 
        should be very popular with passengers who book nonrefundable 
        tickets, because it allows customers to check for lower fares 
        and time to coordinate their travel without losing a quoted 
        fare.

      Our preliminary testing shows that, with a few exceptions, the 
        Airlines were living up to this commitment in practice. 
        However, where a ticket purchase was required, the reservation 
        agents typically did not tell us that we could receive a full 
        refund if the reservation was canceled within 24 hours. 
        Therefore, we suggested that the Airlines requiring a ticket 
        purchase affirmatively notify passengers that if they cancel 
        the reservation within 24 hours they can receive a full refund 
        without a penalty, even on otherwise nonrefundable tickets.

   Provide prompt ticket refunds--By agreeing to this 
        provision, the Airlines have, in essence, agreed to comply with 
        existing Federal regulations and requirements. The 7-day refund 
        requirement for credit card purchases has been in effect for 
        nearly 20 years and is governed by Federal regulations. The 20-
        day refund requirement for cash purchases has been in effect 
        for over 16 years. Our preliminary testing did not show 
        compliance problems with this provision.

   Properly accommodate disabled and special needs passengers--
        This provision is all about disclosing policies and procedures 
        for handling special needs passengers and for accommodating 
        persons with disabilities. It does not require the Airlines to 
        go beyond what is in the regulations for accommodating persons 
        with disabilities or to improve the treatment of special needs 
        passengers. Of the 12 provisions addressed in their Plans, we 
        found the Airlines disclosed more detailed information to 
        passengers on this provision than on any other. Between now and 
        October 2000, we will assess how well the Airlines are 
        complying with regulations for accommodating persons with 
        disabilities. During this process, we will also collect views 
        from groups representing the disabled, which we will consider 
        in reaching a conclusion on whether this provision was 
        effective.

   Meet customers' essential needs during long on-aircraft 
        delays--During our initial visits to the Airlines, less than 
        half had comprehensive customer service contingency plans in 
        place for handling extended delays on-board aircraft at all the 
        airports they served. Subsequent to our initial visits, the 
        Airlines have all stated that comprehensive customer service 
        contingency plans are in place for addressing delays, 
        cancellations and diversions. Over the next several months, at 
        the airports we visit, we will determine whether the (1) 
        Airlines' customer service contingency plans are in place, (2) 
        Airlines' customer service personnel are knowledgeable of 
        contingency plan procedures, and (3) contingency plans have 
        been coordinated with the local airport authorities and FAA.
      This provision also does not specify in any detail the efforts 
        that will be made to get passengers off the aircraft when 
        delayed for extended periods, either before departure or after 
        arrival. The provision uses general terms such as ``food,'' 
        ``every reasonable effort,'' ``for an extended period of 
        time,'' or ``emergency.'' These terms should be clearly defined 
        to provide the passenger with a clear understanding of what to 
        expect.
      We have found examples where Airlines have invested in air stairs 
        for deplaning passengers when an aircraft is delayed on the 
        ground but does not have access to a terminal gate; secured 
        additional food and beverage supplies for service at the 
        departure gates or on-board flights experiencing extended 
        delays; or made arrangements with medical consulting services 
        to resolve medical emergencies that occur on-board an aircraft.

   Handle ``bumped'' passengers with fairness and consistency--
        The requirement that the Airlines establish and disclose to the 
        customer policies and procedures regarding denied boardings has 
        been in effect for over 17 years. One critical element of 
        disclosure is the Airlines' check-in time requirements that 
        passengers must meet in order to avoid being ``bumped.'' This 
        is important because the last passenger to check in is 
        generally the first to be denied a seat.
      We found several inconsistencies and ambiguities between the 
        check-in times identified in the Airlines' Plans, and those 
        identified on the Airlines' contracts of carriage, ticket 
        jackets, or other written instruments, such as the customer's 
        receipt and itinerary for electronic tickets. For example, in 
        its contract of carriage, one Airline requires passengers to 
        check in 10 minutes prior to the flight's scheduled departure, 
        but on the customer's receipt and itinerary for electronic 
        tickets, the check-in time states 20 minutes prior to the 
        flight's scheduled departure, making it unclear to passengers 
        which check-in time must be met in order to avoid losing their 
        seats and being ``bumped'' from the flight without 
        compensation.

   Be more responsive to customer complaints--The provision 
        requires the Airlines to respond to complaints within 60 days; 
        it does not require resolution of the complaint within the 60-
        day period, nor that when resolved, the disposition will be 
        satisfactory to the customer. Our testing of this provision 
        found the Airlines were responding to written complaints in 
        accordance with their internal policies, generally less than 60 
        days. In addition, the replies we reviewed were responsive to 
        the customer complaint and not merely an acknowledgement that 
        the complaint had been received.

Airline Performance Measurement Systems and Non-Airline-Employee 
        Training Are Needed
    A key to the success of the Plans is the need for each Airline to 
have a credible tracking system for compliance with its Plan, 
buttressed by performance goals and measures. The Airlines also need to 
train non-Airline employees on customer service issues contained in the 
Plans, since these individuals are often mistaken for Airline 
employees.
    The Airlines need to have performance measurement systems in place 
to ensure the success of the Commitment and Plans. Therefore, the 
success of the Customer Service Plans is dependent upon each Airline 
having a tracking system for compliance with each provision and the 
implementing Plan. We found that most of the Airlines originally did 
not have such a system in place, but we received assurances that the 
needed systems would be established. In our work between now and 
December, we intend to determine whether the Airlines have followed 
through on their assurances and these performance measurement systems 
are in place. The expectation, for example, is that each Airline will 
have in place a tracking system to ensure the lowest eligible fare is 
offered, that misrouted and delayed baggage is returned within 24 
hours, that refunds are paid within the requisite timeframe, and that 
communication systems for advising passengers of flight status are 
working properly, and generating reliable and timely information.
    Another area the Airlines need to address to improve customer 
service is the training of non-Airline employees who interact with 
customers at the airport such as skycaps, security screeners or 
wheelchair providers. The Airlines must ensure non-Airline employees 
who interact with their passengers are adequately trained on the 
Airlines' Plans, policies and procedures for customer service.
    When these personnel perform customer service functions covered 
directly by the Airlines' Commitment, the public cannot reasonably be 
expected to differentiate between those who work for the Airlines and 
those who do not. Therefore, it is critical to the success of the 
Commitment and Plans for these personnel to be properly trained. 
However, 5 of the 14 Airlines told us they did not intend to train non-
airline personnel on their Plans' procedures. This is unfortunate. For 
example, it is critical that the Airlines ensure that non-Airline 
personnel performing passenger security screening service on behalf of 
the Airlines understand the Airlines' policies and procedures in their 
Plans for accommodating persons with disabilities.

The Terms in the Airlines' Contracts of Carriage Can Be More 
        Restrictive Than the Terms in Their Plans
    The Commitment and the Airlines' Plans, while conveying promises of 
customer service standards, do not necessarily translate into legally 
enforceable passenger rights. Rather, each air carrier has an 
underlying contract of carriage which, under Federal regulations, 
provides the terms and conditions of passenger rights and air carrier 
liabilities. The contract of carriage is legally binding between the 
air carrier and the passenger.
    Because of their clear enforceability, the Airlines' contracts of 
carriage have become an important issue in the customer service debate. 
Our results indicate that, in general, the Airlines have not modified 
their contracts of carriage to reflect all items in their Plans. 
Although 1 Airline incorporated its Plan in its entirety into the 
contract of carriage, 3 Airlines (as of April 20, 2000) have not 
changed their contracts of carriage at all since they agreed to the 
Commitment, and the remaining 10 Airlines have changed their contracts 
of carriage to some extent. This means, for example, that the 
provisions for returning misrouted baggage within 24 hours and holding 
a reservation for 24 hours without payment are not in some contracts of 
carriage.
    At present, it remains uncertain whether an Airline's Plan is 
binding and enforceable on the Airline. In fact, one Airline, in its 
Plan, has stated that the Plan does not create contractual or legal 
rights. To resolve this question, the Airlines could incorporate their 
Plans in their contracts of carriage. However, based on our results 
thus far, we are concerned that, without direction to the contrary, 
this would leave open the possibility that the contracts of carriage 
may be more restrictive to the consumer than envisioned in the 
Commitment or the Plans.
    In some cases, we found the modifications made to the contracts of 
carriage included restrictions not found in the Commitment or the 
Plans. For example:

   One Airline, in its Plan, states that it would accommodate 
        passengers required to stay overnight for delays and 
        cancellations caused by the Airline's operations. However, in 
        its contract of carriage the terms are more limited--the 
        Airline provides accommodations if the passenger is diverted to 
        another airport and put in an overnight status at the other 
        airport.

   One Airline, in modifying its contract of carriage to 
        implement the provision to hold a reservation without payment 
        for 24 hours, limited the benefit to passengers calling from 
        the United States for travel within the United States. However, 
        the Commitment does not make this distinction.

    Customer service is likely to become more of a competitive market 
force as air carriers strengthen and implement plans to provide better 
service. Over time, where there is competition in the air markets 
served, measures to improve customer service should serve as a catalyst 
for other Airlines to introduce initiatives to improve their customer 
service in order to remain competitive. However, inclusion of the 
Plans' provisions in the Airlines' contracts of carriage will become 
more important if an environment develops where there is less 
competitive pressure to maintain or improve customer service.

Implications for DOT's Capacity to Oversee and Enforce Air Carrier 
        Customers' Rights
    DOT is congressionally mandated to oversee and enforce air travel 
consumer protection requirements, some of which are covered by the 
Commitments, and the Airlines' Plans and contracts of carriage. These 
include compensation rules for bumped passengers, rules governing the 
accommodation of disabled air travelers, ticket refund provisions, and 
baggage liability requirements. The Office of the Assistant General 
Counsel for Aviation Enforcement and Proceedings, including its 
Aviation Consumer Protection Division, carries out this mission. This 
office is also responsible for enforcing other aviation economic 
requirements, such as legal issues that arise regarding air carrier 
fitness determinations and competition.
    DOT, in preparing and justifying budget requests for this office, 
and Congress, in reviewing those requests, should look closely at this 
office's capacity to fulfill its mission and be responsive in a timely 
way to consumer complaints. In 1985, this office had a staff of 40; in 
1995, it was down to 20; and by 2000, it had a staff of 17 to oversee 
and enforce aviation consumer protection rules as well as carry out its 
other responsibilities.
    In fact, staffing has declined during a period of air traffic 
growth, complaints have increased from 7,665 in 1997 to 20,495 \2\ in 
1999, additional requirements have been established (such as the Air 
Carrier Access Act and the Aviation Disaster Family Assistance Act), 
and recently, the Commitment emerged as an important element in 
protecting passenger rights. An issue that office will face soon is 
whether policies contained in the Commitment and the Airlines' 
implementing plans are enforceable if they are not also contained in 
the Airlines' contracts of carriage.
---------------------------------------------------------------------------
    \2\ Total aviation consumer complaints filed with DOT for the 
entire industry (U.S. airlines, foreign airlines, tour operators, 
etc.).
---------------------------------------------------------------------------
    We believe there is cause for concern whether the oversight and 
enforcement expectations for the Office of Aviation Enforcement and 
Proceedings significantly exceed the office's capacity to handle the 
workload in a responsive manner.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you might have.

    The Chairman. Thank you, Mr. Mead.
    Mr. Carty, welcome.

 STATEMENT OF DONALD J. CARTY, CHAIRMAN, PRESIDENT, AND CHIEF 
 EXECUTIVE OFFICER, AMERICAN AIRLINES, AND CHAIRMAN, EXECUTIVE 
 COMMITTEE, AIR TRANSPORT ASSOCIATION OF AMERICA, ACCOMPANIED 
    BY: MARY JOPPLIN, SENIOR DIRECTOR FOR CUSTOMER SERVICE, 
 CONTINENTAL AIRLINES; VICKI ESCARRA, EXECUTIVE VICE PRESIDENT 
    FOR CUSTOMER SERVICE, DELTA AIR LINES; AND MARK DUPONT, 
   MANAGING DIRECTOR OF CUSTOMER SERVICES, AMERICAN AIRLINES

    Mr. Carty. Mr. Chairman and members of the Committee: My 
name is Don Carty. I am the CEO of American Airlines and I 
appear today not only in that capacity, but in my capacity as 
Chairman of the Executive Committee of the Air Transport 
Association.
    I am here today as much to listen as to speak. I have 
obviously not had a chance to review in detail the interim 
report of the Inspector General. Therefore I cannot comment on 
the specifics in it. But I consider it my responsibility to 
listen to your comments and concerns and certainly convey them 
promptly and accurately to my colleagues. While I intend to be 
a conduit for your comments and concerns to the industry as a 
whole, I would like to give you a sense of at least what we at 
American have done to respond to your call for more 
responsiveness to customer needs.
    It is no secret that virtually no one in the business 
community likes government telling them what to do. When 
Congress debated a passenger bill of rights last year, I think 
all of you know we resisted. That debate did, however, cause 
the ATA carriers to refocus sharply on and address customer 
satisfaction much more quickly than we might otherwise have 
done.
    While I still firmly believe that you made the right 
decision in not enacting rigid legislative standards, I have to 
say that the actions of this Committee and others were very 
beneficial in focusing the industry on customer issues. I think 
it is fair to say that you forced us, all of us, to recommit 
ourselves to improving customer service. In direct response to 
your initiative, we have and we still have people from 
different departments literally across our companies asking how 
we can treat our customers better.
    We have cut across functional lines and have taken a 
comprehensive look at the whole question of customer service. I 
think it is fair to say that when we did we found areas that 
needed improvement, such as communications and training. Most 
importantly, we started talking with each other about 
developing common objectives that were focused on the customer.
    Now, I realize that many of you are not satisfied with the 
results so far. You might be surprised to learn that neither am 
I. Despite an enormous effort, we are still not getting all the 
results that either you or we had hoped for. But I firmly 
believe that we have made very significant strides in the 
industry in the right direction and that, in fact, the pendulum 
on customer service is swinging back in the right direction and 
there is an intensification of competition around customer 
service.
    Some of the criticism directed toward the airline industry 
assumes that we are cavalier in our attitude toward our 
customers. I can assure you nothing could be further from the 
truth. We want nothing more than for every single customer to 
have a safe and comfortable experience on our airline.
    But in today's operating environment, as a number of you 
have mentioned, that is a monumental task. The airline industry 
today transports over two million passengers each and every 
day. The vast majority of these people do get where they want 
to go, when they want to go, and at a price that they are 
willing to pay. We transport all these people with a safety 
record that really is second to none in inter-city travel. This 
summer the industry's passenger loads are breaking all records. 
In fact, on Friday we will certainly have at American the 
busiest day in the history of our company.
    Now, as much as we try, we will never be able to satisfy 
all of these customers all of the time. But we can certainly do 
better than we have and we can certainly do better than we are 
doing today. Again, I genuinely believe, and I do believe this, 
that we are making progress, and we are making this progress in 
a very challenging and demanding environment.
    The record number of travelers this summer, while certainly 
good news, is making a task of providing better service for 
every passenger even harder. That is because when high load 
factors exist and when something goes wrong there are more 
people who miss connections, more bags to transfer, fewer seats 
on other flights to carry people who missed planes, and fewer 
facilities at airports to feed and house stranded passengers.
    Transporting this record number of people has been made 
even more challenging by early summer weather patterns that 
have caused very substantial delays throughout the system, 
delays which I am sure many of you have experienced.
    Indeed, as Ken commented, delays are the source of the vast 
majority of consumer complaints. And while some of the delays 
are certainly within our ability to manage and we should manage 
them better, such as maintenance, most really are, in fact by 
far the majority are, the result of weather or air traffic 
control problems.
    The Nation's air traffic control systems and practices have 
simply not kept pace for the growing demand for air travel, and 
there is no greater cause of delays. Now, I know this is not 
news to this Committee. No committee in Congress has been more 
involved for a longer period of time in looking at air traffic 
control problems than this one in particular. Mr. Chairman, 
your early commitment to ATC reform has moved the issue forward 
faster than anything anyone else has been able to do.
    But I think it is fair to say we are only beginning to 
identify the long-term fixes to the problem. We have a long, 
long way to go and until we get there, customer service is 
unfortunately going to suffer. I have to say to you personally, 
I am not terribly optimistic about dramatic improvement on that 
front in the next several years.
    Now, some argue that delays are the result of the airlines 
overscheduling. With load factors in the 80's and the 90's on a 
continual basis, I think it is fair to say we cannot be accused 
of flying empty planes through scarce air space. Rather, we are 
responding to a stronger demand for air service than we have 
ever seen before in the history of our country. And I am sure 
that passengers who cannot find seats to destinations they 
desire do not think that we have too many flights.
    So what have we at American done about all of this? Taking 
off my ATA hat for a minute and putting on my American hat, I 
am very proud of our response to your concerns, particularly in 
the areas that go above and beyond the voluntary plans. Let me 
share just a couple.
    There is no more customer-friendly act than to provide 
medical service that saves lives. We were the first carrier to 
place defibrillators on all our planes and as a result there 
are people literally alive today who were brought back to life 
on our airplanes. We have now supplemented this by adding 
state-of-the-art medical kits to all of our planes as well.
    As a response to our customer surveys and to your criticism 
of the flying experience, we identified the single greatest, 
one of the single greatest complaints, crowded flying 
conditions, and as a result, as all of you I think know, we 
decided to remove two rows of seats from the coach section of 
each of our planes, returning the coach seating to the way it 
was before deregulation.
    In fact, a number of you were there the day we launched 
this plan, and we have now reconfigured over 500 of our 
aircraft and will complete the conversion of the fleet by the 
end of the year. We certainly hope that passengers will choose 
American as a result of this vastly superior product.
    I am really very proud of the customer service improvement 
made by our people and I thank you for the opportunity to 
shamelessly promote it in front of you today.
    We have also added newly designed seats in most of our 
planes that are far more comfortable than the old ones and are 
the best in the industry. This program has cost us $400 
million.
    In an effort to reduce delays at O'Hare, American Eagle has 
voluntarily agreed to use lower flying altitudes for some of 
its O'Hare flights. That, quite simply, frees up air space at 
higher altitudes. Although this increases Eagle's costs because 
flying at lower altitudes uses more fuel. However, we made the 
decision in order to help all carriers at O'Hare to reduce 
delays and improve customer service.
    We have committed billions of dollars to refurbishing our 
terminals in numerous airports, including Miami, JFK, Los 
Angeles, and Boston, to make the traveling experience better 
for our passengers. We have made available additional food and 
water on all our flights for passengers to eat and drink during 
long delays. In fact, since the beginning of this program we 
have, unfortunately, distributed approximately 500,000 packages 
during extended delays.
    By July we will have deployed mobile check-in stations at 
more than 65 airports, which will allow passengers to check 
bags and get boarding passes without having to go to the ticket 
counter. We are using voice recognition technology to handle 
telephone inquiries regarding gate assignments and flight 
status, which gives passengers a new option for obtaining 
information and frees up our agents to handle calls needing 
special attention more quickly.
    But perhaps most importantly, we have spent countless hours 
talking to our employees about these issues and providing them 
with the training on how to deal with difficult situations. Our 
agents and our flight crews are literally on the front line 
each and every day and their jobs are incredibly stressful and 
incredibly challenging, and they get even more difficult when 
we see the delays that we have experienced.
    We really have made every effort we can to support them in 
their desire, and they really do want this, to provide our 
customers with the best possible information at all times. I 
think we are doing a much better job telling our customers 
about delays, schedule changes, and other problems when they 
occur. I know that we are far from perfect in that regard thus 
far. Yet I think we are working very hard to provide consistent 
and accurate flow of information.
    Part of what I have said in the last few minutes has been a 
bit of a plug for American Airlines, but I would be remiss if I 
did not say these kinds of efforts in one form or another are 
going on at virtually every airline in the industry. Because we 
engage with them competitively, when one of our competitors is 
offering something that we are not yet offering and we respond 
to that, just as many of our competitors are responding to us.
    I am going to suggest that Vicki Escarra of Delta spend 
just a couple of minutes talking about some of the technology 
Delta is using to help provide customers with better 
information. Again, Delta is not exclusive in this effort. A 
number of airlines in the industry are spending an enormous 
amount of money in identifying new technologies as a way to 
communicate better with our passengers.
    So let me say again, I am certainly here to answer 
questions and, most importantly, to listen very carefully, as I 
did in your opening comments to everything you have to say to 
us, and I certainly intend to convey your comments and your 
concerns to all my colleagues, not only at American but in the 
entire industry.
    Vicki.
    [The prepared statement of Mr. Carty follows:]

 Prepared Statement of Donald J. Carty, Chairman, President, and Chief 
     Executive Officer, American Airlines, and Chairman, Executive 
            Committee, Air Transport Association of America

    Mr. Chairman and Members of the Committee, my name is Don Carty. I 
am Chairman of the Board, President and Chief Executive Officer of 
American Airlines. I appear today in my capacity as Chairman of the 
Executive Committee of the Air Transport Association. ATA represents 
the major U.S. passenger and cargo air carriers. Our members transport 
approximately 95% of the passengers and goods transported by air on 
U.S. flag carriers.
    I am here today as much to listen as to speak. I have obviously not 
had a chance to see the interim report of the Inspector General. 
Therefore, I cannot comment on any specifics in it. But I consider it 
my responsibility to listen to your comments and concerns, and then 
convey them promptly and accurately to my colleagues. The Members of 
this Committee have strong views, but you have also been willing to 
work with us to develop our various plans. For that we are most 
appreciative.
    While I intend to be a conduit for your comments and concerns to 
the industry as a whole, I would like to give you a sense of how we at 
American have responded to your call for more responsiveness to 
customer needs.
    It is no secret that virtually no one in the business community 
likes government telling them what to do. When Congress debated a 
``passenger bill of rights'' last year, we resisted. That debate did, 
however, cause the ATA carriers to focus on and address customer 
satisfaction issues more quickly than we would have otherwise. While I 
still firmly believe that you made the right decision in not enacting 
rigid legislative standards, I have to say that the actions of this 
Committee and other were very beneficial in focusing the industry on 
customer issues.
    You forced us to recommit ourselves to improving customer service. 
In direct response to your initiative, we had, and still have, people 
from different departments across our companies asking how we can treat 
our customers better. We have cut across functional lines and have 
taken a comprehensive look at customer service.
    This was not a trivial task. Thousands of individuals put down 
pressing work to focus on the problem. We looked at other businesses to 
help us in developing better practices. And more and more we started 
looking at our business from the customer's point of view. When we did, 
we found areas that needed improvement, such as communications and 
training. Most important, we started talking to each other to develop 
common objectives that were focused on the customer.
    I realize that many of you are not satisfied with the results so 
far. You might be surprised to learn that neither am I. Despite an 
enormous effort, we are still not getting all the results that either 
you or we had hoped for. But I firmly believe that we have made very 
significant strides in the right direction and that, in fact, the 
pendulum in customer service is swinging back in the right direction.
    Some of the criticism directed towards the airline industry assumes 
that we are cavalier in our attitude toward customers. Trust me, we 
want nothing more than for every single customer to have a safe and 
comfortable experience on our airline. In today's operating 
environment, that is a monumental task.
    The airline industry transports over 2 million people each and 
every day. The vast majority of those people get to where they want to 
go, when they want to go, at a price they are willing to pay. We 
transport all these people with a safety record second to none in 
intercity travel. This summer the industry's passenger loads are 
breaking all records. On Friday, we expect to have the busiest day in 
our history.
    As much as we try, we will never be able to satisfy all of these 
customers all the time. But we can certainly do better than we are 
today and, again, I genuinely believe we are making great progress, and 
we are making this progress in a very challenging and demanding 
environment. The record number of travelers this summer, while 
certainly good news, is making the task of providing better service for 
every passenger even harder. This is because with high load factors, 
when something goes wrong, there are more people who miss connections, 
more bags to transfer, fewer seats on other flights to carry people who 
missed planes, and fewer facilities at airports to feed and house 
stranded passengers. Transporting this record number of people has been 
made even more challenging by early summer weather patterns that have 
often caused substantial delays throughout the system.
    Indeed, delays are the source of the vast majority of consumer 
complaints. While some of the delays are within our ability to manage, 
such as maintenance, most are a result of weather or air traffic 
control problems. The nation's air traffic control systems and 
practices have not kept pace with the growing demand for air travel, 
and there is no greater cause of delays. I know that this is not news 
to this Committee. No Committee in Congress has been more involved for 
a longer period of time in looking at air traffic control problems than 
this one. In particular, Mr. Chairman, your early commitment to ATC 
reform has moved the issue forward faster than any one else has been 
able to do. But we are only beginning to identify the long-term fixes 
to the problem. We have a long, long way to go, and until we get there, 
customer service will unfortunately suffer.
    Some argue that delays are a result of the airlines 
``overscheduling.'' With load factors in the 80's and 90's on a 
continual basis, we can hardly be accused of flying empty planes 
through scarce air space. Rather, we are responding to a stronger 
demand for air service than we have ever seen before. I am sure that 
passengers who cannot find seats to the destinations they desire don't 
think we have too many flights.
    So what have we at American done about all this? Taking off my ATA 
hat and putting on my American hat, I am very proud of our response to 
your concerns, particularly in areas that go above and beyond the 
voluntary plans. Let me share a few:

   There is no more customer friendly act than to provide 
        medical services that save lives. We were the first carrier to 
        place defibrillators on all of our planes. As a result, there 
        are people alive today who were brought back to life on our 
        planes. We supplemented this by adding state-of-the-art medical 
        kits to all of our planes as well.

   As a response to our customer surveys and to your criticisms 
        of the flying experience, we identified one of the single 
        greatest complaints--crowded flying conditions. As a result, we 
        decided to remove two rows of seats from the coach section of 
        each of our planes, returning the coach seating to the way it 
        was before deregulation. A number of you were there the day we 
        launched this plan. We have now reconfigured over 500 of our 
        aircraft and will complete conversion of the fleet by the end 
        of the year. We hope that passengers will choose American over 
        our competitors as a result of this vastly superior product. I 
        am immensely proud of this customer improvement and thank you 
        for the opportunity to shamelessly promote it today.

   We have added newly designed seats in most of our planes 
        that are far more comfortable than the old ones and are the 
        best in the industry. This program has cost us $400 million.

   We have committed billions of dollars to refurbishing our 
        terminals in numerous airports, including MIA, JFK, LAX and 
        BOS, to make the traveling experience better for our 
        passengers.

   We have made available additional food and water on all of 
        our flights for passengers to eat and drink during long delays. 
        Since the beginning of this program, we have distributed 
        approximately 500,000 packages during extended delays.

   By July, we will have deployed mobile check-in stations at 
        more than 65 airports which will allow passengers to check bags 
        and get boarding passes without having to go to the ticket 
        counter.

   We are using voice recognition technology to handle 
        telephone inquiries regarding gate assignments and flight 
        status, which gives passengers a new option for obtaining 
        information and frees up our agents to handle calls needing 
        special attention more quickly.

    Most important, we have spent countless hours talking to our 
employees about these issues and providing them with training on how to 
deal with difficult situations. Our agents and flight crews are on the 
front line each and every day. Their jobs are both stressful and 
challenging. We have made every effort we can to support them in their 
desire to provide our customers with the best possible information at 
all times. I believe that we are doing a much better job telling our 
customers about delays, schedule changes, and other problems when they 
occur. I know we are far from perfect, but we are working very hard to 
provide a consistent and accurate flow of information.
    So let me say again, I am here to answer any questions and, most 
importantly, to listen carefully to you and to convey your comments and 
concerns to my colleagues at American and the ATA.

    The Chairman. Thank you, Mr. Carty. Since you agreed to be 
the one to appear before the Committee, you certainly deserve 
the luxury of a couple of commercials for your airline.
    Mr. Carty. Thank you, Senator.
    The Chairman. Ms. Escarra.
    Ms. Escarra. Well, again good morning, Mr. Chairman, 
Senators, and thank you for an opportunity of being with you 
and to as well listen to your concerns, which are certainly our 
concerns.
    Just a brief mention, if I may, about the technology that 
is in the room. I am sure many of you are wondering what this 
is. For Delta, this is a significant way to address many issues 
around notifying customers of known delays, cancellations, and 
diversions. It as well will provide to our consumers and to our 
employees accurate and reliable information. It will address 
the issues that Ken talked about with regard to content, which 
are certainly concerning to us.
    If we know that there is a crew problem, a maintenance 
problem, a weather problem, this system will help us. Simply 
put, if you look at the back of the room, the first screen that 
you will see is called a Flight Status Monitor System. It is 
what our operations control center uses to actually enter 
information, retrieve information from our pilots or our system 
or the FAA about known delays and cancellations. It as well 
helps us monitor gate changes and so forth.
    Moving around the room, the second screen that you will see 
is technology at our gates which allow our gate agents to 
manage customers in a different and better way. The last two 
screens that you see are actually customer information display 
screens and they do a number of things for us. But the real 
power of this system is that at Delta over the last year and a 
half we have been merging our systems and our data bases 
together so that with a simple push of one keystroke in our 
operations control center around a cancellation or delay our 
consumers know about that within a matter of a few seconds.
    The Chairman. How many airports do you have this 
information right there, those displays?
    Ms. Escarra. The gate information currently is at 28 of our 
airports. We will be moving it into 56 additional airports by 
the end of this calendar year.
    Senator Kerry. Just in the airport?
    Ms. Escarra. Just in the airport. The customer information 
display screens are in the airports and we are launching them 
in the major cities that we serve today, as well as in our 
crown room clubs.
    Senator Kerry. Could they be accessed by Internet by 
somebody?
    Ms. Escarra. Yes, they can, and that as well, Senator 
Kerry, is really the power behind this system. As we move into 
the next decade, all of our technology will have Internet 
capability and access.
    Thank you.
    The Chairman. Thank you.
    Anyone else?
    [No response.]
    The Chairman. Then I want to thank all of you for coming.
    Mr. Mead, I thank you for a very important report. Give me 
a guess or an estimate, an estimate I would prefer. Clearly the 
delays are increasing. Clearly this system is becoming 
overtaxed. Clearly there are therefore additional 
inconveniences to the airline passenger.
    A couple years ago we had a report that was given to 
Congress and the American people by a very important blue 
ribbon committee. I think you remember that report. You know 
the one I am referring to. In that report what struck me is 
they had a line that said: Unless something drastic changes as 
far as the air traffic control system is concerned, every day 
in a major airport in America will be like the day before 
Thanksgiving. Do you remember that?
    So my question to you is how much responsibility can we 
place on the failure to modernize the air traffic control 
system versus poor performance on the part of the airlines 
themselves? And with an increase in flights--we see that all 
along--how significantly will this failure of the air traffic 
control system to absorb this dramatic increase in flights play 
in our attempts to give the American people what they deserve, 
which they are not getting today, in all due respect?
    Can you ruminate a bit? I am trying to--rather than focus 
on whether there is on-time baggage delivery and those kinds of 
things, I think first we need more of a big picture here, 
because I think that we need to look at the known factors--
increases in flights, increases in congestion of the system, 
the failure of construction of airports to keep up with the 
number of flights, failure of the air traffic control system to 
modernize--and we can debate as to whose fault that is at 
another time.
    But crank in all those factors. You have been involved in 
aviation issues now for many, many years. Please.
    Mr. Mead. You know, it is not a de novo question. When you 
are preparing for testimony like this, you think, well, what 
can you offer the Committee in the way of a solution? This is a 
tough cookie. I think the blaming of this substantially on air 
traffic control is misplaced. I think air traffic control and 
modernization do bear some of the responsibility. But if you 
reflect on the airports and more and more aluminum tubes on the 
airport, if a community is not prepared to significantly expand 
the airport, put in more runways, what can air traffic control 
reasonably be expected to do?
    Weather. There are some weather patterns in this country--
for example, just 2 weeks ago there were thunderheads that 
literally split the United States in half. It was like a wall. 
There was not a way, as it has been explained to me, that you 
could fly over it. A U-2 pilot perhaps could have, but not 
commercial airliners. Expecting air traffic control to deal 
with that type of situation I think is a bit unreasonable.
    I think the airlines in their scheduling do anticipate that 
they will have normal flying conditions. They do not anticipate 
that there is going to be a terrible storm on a particular day. 
You will have an aircraft that is flying to three or four 
different locations throughout the day and it never makes it to 
its second location. This has a domino effect throughout the 
airline system that they are unable to compensate for because 
in many cases they do not have a spare aircraft sitting around 
at the destination.
    That is why sometimes you will see a situation where the 
weather at the destination and point of origin is just fine, 
but the aircraft that is supposed to be used has been delayed 
someplace because of weather.
    I would not want to attach a percentage to it. I think 
there are multiple factors. But I do believe the airlines bear 
a good bit of responsibility. The FAA's initiatives, such as 
Free Flight, which I know you are familiar with, they could be 
expedited. They need to be expedited.
    We should not underestimate the importance of the 
availability of runways in this country. FAA cannot force a 
community to expand an airport, nor can the airlines. The 
statistic on that chart I put up that showed a 130 percent 
increase in delays of more than 1 hour, those were delays after 
the planes left the gate and before takeoff. That is not always 
because of weather.
    The Chairman. I do not like to ask questions related to 
personal experiences particularly, but I have been flying the 
shuttle to New York and-or Boston for many years now. Even on 
good weather days, there are delays because of congestion 
within the system, just that there is too many airplanes using 
the Northeast Corridor. So does that not--that is probably the 
most severe case of the overstress of the air traffic control 
system.
    Mr. Mead. When we went to deregulation, with the exception 
of four airports, there were no slot controls. There were no 
slot controls placed on them. Now we are lifting slot controls 
at Chicago. I do not know where this country is headed in 5 or 
10 years. If we continue to have the low fares and the demand, 
we are going to have more and more planes and we are going to 
have to face some means of allocating the space.
    Some economists would suggest that it be congestion, or 
peak-hour, pricing, but that would be translated to you, the 
passenger, on the ticket price. If you wanted to get a cheap 
fare, you would be unable to go from market A to market B at a 
peak hour at what you would consider to be a cheap fare.
    Mr. Carty. Senator, could I make a comment on that subject?
    The Chairman. Sure. Sure, Mr. Carty. Bring the microphone a 
little closer if you would.
    Mr. Carty. I do not disagree with much of what Ken has 
said. There are a number of infrastructure problems. But I 
think we would be naive if we assumed that we are simply taxing 
the air space dramatically. I think there are runways we are 
also taxing, airports that we are taxing. But the air space is 
being taxed.
    There is a tremendous increase in demand for that air 
space, not just by the gradual growth in our business, but by 
the changing nature of it. Regional jets do not occupy the same 
air space as turboprops do. They are up there with the big 
airplanes. You have seen just a huge increase in the number of 
regional jets flying in this country.
    The Northeast quadrant which you identified is clearly 
getting more and more clogged, and it backs up in the rest of 
the country because many of the flights coming out of the rest 
of the country are headed for the Northeast. So a Dallas to 
Boston flight is just as badly affected as a New York to Boston 
flight.
    So we are really beginning to clog this up. I would 
predict--and I am not a technical expert--that no matter what 
the airlines do in the next year, no matter how good a job they 
execute, the delay situation next summer will be as bad as it 
is this summer.
    We all try to avoid the anecdotes. Let me give you an 
anecdote that happened to me last night. I was on a flight 
coming out of Dallas leaving at 4 o'clock and I was sitting in 
a line at 5:15 waiting to take off an hour and a quarter later 
and the captain came on and said he expected, he was being 
informed he would be able to take off at 5:30. I looked out the 
window and it did not look like to me he was taking off at 
5:30. I must say in his defense, he said: But I am not sure 
about that. There were a lot of airplanes out there.
    So I called our systems operation control. They said they 
were being told 5:30 by the FAA, but they doubted it and they 
had no information.
    Now, there were a couple of comments made about the 
airlines providing better information and we certainly should 
when we have it. We have not done as good a job there as we 
need to do and we need to get more focused, more information to 
our people, more use of information systems, and more training. 
But I called at 6, I called at 6:30, I called at quarter to 7, 
and no one--I am the CEO of the company! If anybody at American 
Airlines had known when that plane was taking off, they would 
have told me, I can assure you, and by the fourth call they 
certainly would have!
    The plane took off at 7:20, 3 hours and 20 minutes late. 
And there was weather in the Dallas region, there was weather 
in the Washington region, but no one could understand how that 
weather, even in our systems operation control, had backed up 
the air traffic control system.
    One further comment on weather. Ken is quite right, you 
cannot fly through weather that cannot be flown through and 
none of us want to. But once weather clears, if the 
infrastructure has more capacity than it currently has you can 
clear up the delays. They do not have to last all day and into 
the next day to catch up. The problem is the system is at 
capacity and we are going to be in deep trouble in this country 
in terms of providing good service to our customers even if we 
do a better job, and I can assure you, at least at American, we 
will do a better job.
    Mr. Mead. I had one thing, a postscript to add, that I 
think is a very major improvement, or at least it has that 
potential. Last year, at this time, we were experiencing all 
these delays--you will probably recall the experiences of last 
summer. At that point in time, FAA and the operations centers 
of the airlines were not collaborating nearly as much as they 
are today.
    This last Friday, I was at Northwest Airline's operations 
center in Minneapolis. There was a storm, thunderheads going 
from the ground practically to 55,000 feet near Chicago. So 
there was no way planes were going to be getting into or out of 
Chicago once that storm hit. But I was seeing first-hand 
something that the Northwest people told me had not happened 7 
months before, and that was they were there discussing and 
collaborating with Herndon air traffic control on the 
scheduling and movement of their flights around the country.
    In the past, they said, they would just get orders. Air 
traffic control would say this is the way basically it is going 
to be, and the airline did not have as much input. So I think 
that is a non-technology-related initiative, but it is clearly 
an improvement. They were telling me at Northwest that they 
feel that they will be able to make better judgments on how 
well this will work 6 months from now, because they are still 
fairly new at it.
    The Chairman. Mr. Carty, when you had that experience how 
often did the pilot come up on the intercom and tell everybody 
what was going on?
    Mr. Carty. He did, he did a very good job. He was on every 
15 or 20 minutes, and our flight manual tells him to be on 
every 20 minutes.
    The Chairman. I want to tell you, that is very rare. I fly 
every weekend. That is rare. And I do not know whether it is 
their military background or what it is, but very rarely do you 
get the pilots coming up every 15 or 20 minutes to tell us what 
is going on. And that--I cannot write that rule, we cannot 
write that regulation. It would be foolish to do so. But pilots 
do not do that routinely.
    I have been in a plane as long as 2 hours without 
information. So everybody starts harassing the flight attendant 
for information. So again, we have a tendency to micromanage, 
but I have the experience all the time. I am glad you were 
given the ability to have that information shared with you. I 
have been as long as 2 hours.
    Mr. Carty. Senator, I agree with you we have not done as 
good a job as we should have there by any means. I think it is 
a mind set by the pilot, if he does not have anything to tell 
you he does not tell you anything. But I agree with you it is 
nice----
    The Chairman. I would rather have him come up and say.
    Mr. Carty.--to hear that he does not have anything to say.
    The Chairman. I would rather have him come up and say, I do 
not have anything to tell you.
    Mr. Carty. And I think we are making progress. We are doing 
some statistical measuring of that in delays and our pilots are 
doing a better job. They are far from where they need to be. We 
have now built it into our training and built it into our 
flight manuals.
    I notice there was an anecdote in USA Today or something 
that the pilot on a USAirways flight was applauded when he 
simply came on and said: We are going to be here for a while 
and I do not have an idea how long. I wish I could tell you, 
but I cannot. And he got applause just because somebody talked 
to them. I could not agree more with you.
    Ms. Escarra. Mr. Chairman, may I make a couple comments 
about your question? That is, when we look at what the growth 
is planned out to 2008, today we are carrying about between 635 
and 650 million customers. We are planning on carrying or the 
demand looks like it will be right at a billion customers at 
the year 2008. So the issue around how we manage service for 
airlines----
    Senator Kerry. How many are you carrying today?
    Ms. Escarra. The industry is carrying about 635 million 
customers.
    So when you look at--No. 1, I would say when you look at 
deregulation, one of the greatest benefits of deregulation is 
that more people are traveling today, certainly, than were 
traveling in 1978 at lower fares, and we could talk about that. 
But clearly, when we look at the demand based on what customers 
are telling us they want to do, and that is fly more 
frequently, it is not a one size fits all solution.
    Airlines have got to do everything that we can to provide 
good service in light of the fact that crows are inevitable. We 
have got to do a better job of working through local 
communities, State communities, on expanding runways. Atlanta 
is a good example. It has taken us years to get a fifth runway 
approved and now we are moving ahead.
    But finally, I would say when we look at air traffic 
control, and our team is involved twice a day in talking to the 
Herndon center as far as FAA is concerned to discuss how we lay 
out what we are planning on doing as far as weather and ATC 
delays are concerned throughout the day. We are doing a better 
job, I think, in teaming on communication. But we have got to 
find a way of holding the FAA accountable and the air traffic 
controllers accountable, as we should be held accountable, for 
the production line of how we are actually running our system.
    I know we are working on some ways of actually addressing 
those kinds of issues. But the public is demanding that we 
continue to fly greater schedules and that demand will only get 
greater in the next 6 years.
    The Chairman. Well, I will tell you one thing you can do 
and that is man your gates better and your ticket counters 
better. I have stood in lines of 100 people and not had the 
attendant show up, and then that same attendant is the one who 
has to open the gate for the pilot or do a lot of other 
administrative duties while we stand and wait. That is wrong, 
and clearly statistics indicate that staff employment has not 
increased along with the increase in passengers.
    Finally, Ken--and I apologize to my colleagues for taking 
so long--your report indicates that passengers get bumped 
according to the reverse order of check-in, or the last person 
to check in is the first to be denied boarding. Is that always 
the case?
    Mr. Mead. No. We are finding some indications, not enough 
for us to formally report on it yet, of people that are 
frequent flyers, that may not be treated in the same fashion.
    The Chairman. Mr. Carty.
    Mr. Carty. Senator, I am not aware of any such treatment at 
American. As I think you know, we always attempt to deal with 
overbooking situations with voluntary means and it is only rare 
occasions when we resort to involuntary. But involuntary 
generally is handled, as best I know across our airlines 
system, on the person that shows up late, last.
    The Chairman. Well, do you agree that that should be the 
rule?
    Mr. Carty. I think it has got to be the rule. I think 
airlines have to make an enormous effort to make this happen 
voluntarily.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. Mr. Chairman, I 
think you are right to look at this in the big picture. I want 
to look at another aspect of the big picture and that is 
information and, specifically, the public's right to know, 
because I think that is what this debate is really all about. I 
want to focus on this question of the inability of passengers 
to get good information about the lowest fare that is 
available.
    Now, as I was visiting with my friend from Montana, who 
made some comments earlier on this issue, this is something 
that is within the industry's control. This is not a matter of 
thunderstorms or things of this nature. This is within the 
industry's control.
    My reading of the report indicates that if you get on the 
telephone and you ask what is the lowest fare available, a 
majority of the country's airlines will not tell it to you, 
because very often that is available on the Internet or some 
other kind of way. So I would like to start out by having you, 
Mr. Mead, name the airlines by specific name that actually give 
out, if a passenger calls up on the telephone, the lowest fare 
that is out there.
    Mr. Mead. I do not know that any of them give the lowest 
fare that is out there over the phone. That is because there 
are fares available over the Internet that are not available 
over the phone. The point we are making in our report is that 
when you call up on the telephone that the airline should give 
you not only the lowest fare that is available over the phone, 
but should affirmatively tell you that there may be lower fares 
available through other distribution outlets.
    Senator Wyden. Which airlines tell you that and which do 
not?
    Mr. Macey. Yes, sir. Delta Air Lines has on their telephone 
reservation system, when you are put on hold, a recording that 
makes announcements that there are lower fares available on 
their Internet website. USAirways reservation agents also share 
that information with the consumer.
    Senator Wyden. So that is two. We have got 14 that signed 
the pledge. My understanding is 6 of the 14. Who are the other 
four, so we can know who the eight are that do not seem to tell 
you?
    Mr. Macey. Well, we know 6 of the 14 have modified their 
contracts of carriage to include the commitment to offer the 
lowest fare.
    Senator Wyden. Who are they?
    Mr. Macey. We have Delta, Hawaiian, Northwest, Southwest, 
United, and USAirways.
    Senator Wyden. So that leaves us with eight who either do 
not make it legally enforceable to tell you the lowest fare or 
you simply do not know what their practice is, is that not 
correct?
    Mr. Macey. Well, I also should point out, Senator, that in 
their plans several of the airlines disclose that there are 
other fares available through the Internet, through other 
distribution systems, not just on their own Internet sites, but 
other Internet sites. So the information is in a combination of 
places. They will tell you over the telephone. They have it in 
their plans.
    Mr. Mead. The commitment--it is important to realize that 
the commitment is that they will offer the lowest fare 
available over the telephone. It does not go on, nor do the 
airlines pledge to go on and say, gee, you might get a cheaper 
fare on the Internet. Also, they did not pledge that their city 
ticket offices would offer a lower fare, although six airlines 
have gone beyond what was just committed to.
    Senator Wyden. But the reason that this is so important is 
that this illustrates that the consumer is still part of a 
shell game, a kind of three-card monte with respect to fares. 
The airlines did not even promise what is really in the 
public's interest, which is to just get straight information on 
the lowest fare available. Now we are finding many of them are 
stonewalling even on what they said they would do, which was 
pretty limited in the first place.
    The reason I make this point is that this is not an air 
traffic control matter. I happen to think that Chairman McCain 
is right with respect to congestion and infrastructure and the 
like. But on this lowest fare issue, which is so important to 
consumers, they are not getting straight information. It is 
within the control of the industry and the industry will not 
give it to them.
    I think you performed a great service by laying out exactly 
what is going on with an issue that is within the industry's 
control.
    The second area I wanted to examine with you, Mr. Mead, is 
this issue of the contracts of carriage. As you know, I feel 
this is especially important. Mr. Carty, I think it is great 
that you are putting in the extra leg room, but, frankly, I 
would rather have seen you change this document that you all 
put out in 1999 that basically said the contracts of carriage 
are not going to be changed, because to me that is what really 
protects the consumer.
    What I would like to know, Mr. Mead, is of the 14 airlines 
which ones have changed their contracts of carriage to reflect 
that they would now put most of these voluntary commitments 
into writing?
    Mr. Mead. One airline, which I might as well say for the 
record was Southwest Airline, incorporated the commitments as 
well as the plans in the contract of carriage without 
limitation. None of the other airlines went that far. Three 
airlines did not change their contract of carriage at all in 
response to the commitments.
    That leaves ten who changed their contracts of carriage to 
some extent at least to reflect the commitment. Now, 
parenthetically I want to stress that the commitment itself is 
not the entire portfolio that we are all interested in here. 
Each airline has its plans. The plans get specific. For 
example, let me take the commitment on notifying people of 
delays and accommodating them when they are delayed or 
canceled.
    The commitment does not require an airline to accommodate 
anybody overnight. It says you will disclose what your policies 
are. It is the plan that says what specifically the airline 
will do. Now, so that is why it is very important when we are 
talking about these commitments and plans that we specify what 
exactly we are speaking of. The plans in many cases have a more 
liberal provision in them on, for example, accommodating people 
overnight than do the contracts of carriage. A very important 
distinction.
    Senator Wyden. And it is especially important because after 
December, when your work may be done, and if we do not have a 
chairman who is interested in these issues, the question is 
going to be what the consumer has in these contracts of 
carriage. Again, this is an issue, Mr. Carty, that is in the 
industry's control. This is not subject to thunderstorms and 
other problems. This is something that you all can change.
    I will tell you, until I see some changes in this area I 
will continue to believe that these consumer protections are 
really not substantive.
    A question for you, Mr. Carty, and that is on this on-time 
departure matter. I think you heard Mr. Mead describe you get 
out of the gate 14 and a half minutes, so you are within the 
15-minute rule, but you sit on the runway for 5 hours. Do you 
think the rule ought to be changed so that that is not 
considered an on-time departure?
    Mr. Carty. Senator, I think the focus on on-time 
dependability that you see in the DOT and certainly the public 
reporting airlines do, is not on on-time departures, but on on-
time arrivals. Obviously, if you sit on the runway for 2 and a 
half hours you are not going to have an on-time arrival. So I 
do not think there is any need to change that definition, 
because the focus is on promising the customer an arrival time 
and reporting against that, and that measure has become much 
more important to the DOT and consumers than the departure 
question.
    Airlines try to get off the gate quickly even in adverse 
conditions because they know the sooner they get off the gate 
the sooner they are going to be in that line and the sooner 
they are going to be able to be taking off. So I do not think 
that reporting issue is a big problem.
    Senator Wyden. One last question if I could on this round, 
Mr. Chairman. Mr. Mead, AIR 21, the legislation in this area, 
increased the penalties for violating airline passenger 
consumer protection rules. Can you report how often that 
increased penalty has been imposed?
    Mr. Mead. I do not know if it has been. The point I tried 
to make in the statement was that there is some concern, I 
know, about the adequacy of the penalty. The deeper concern we 
have is whether they are going to get enforcement at all 
because of the number of staff in that office and the load that 
they are facing.
    Senator Wyden. My time is up, Mr. Chairman, and I will just 
wrap up by saying I am very sympathetic to what you and Senator 
Rockefeller, Senator Gorton, Senator Burns and others are 
saying with respect to the complexity of the system and the 
congestion. But each one of these areas that I focused on this 
morning is solely within the industry's control. I think that 
is why we need passenger rights legislation and I continue to 
want to work with you and our colleagues on a bipartisan basis 
to get it done.
    Thank you.
    The Chairman. Thank you.
    Senator Burns.
    Senator Burns. Ms. Jopplin, you are a gate agent where?
    Ms. Jopplin. I have been in the industry 23 years. I used 
to be a gate agent about 8 years ago. Now I am Director of 
Customer Service. I was also a reservationist and I was also a 
ticket counter agent.
    Senator Burns. Whereabouts, though?
    Ms. Jopplin. In Houston, Texas, at Continental.
    Senator Burns. Houston. I remember Continental a long time 
ago, but anyway.
    Ms. Jopplin. I do too, Senator Burns.
    Senator Burns. We were still flying DC-3's, so that is how 
far I go back.
    [The prepared statement of Ms. Jopplin follows:]

   Prepared Statement of Mary Jopplin, Senior Director for Customer 
                     Service, Continental Airlines

    Good Morning, my name is Mary Jopplin and I am the Director of 
Customer Service at Continental Airlines. For the last year, I have 
been the lead coordinator for system-wide implementation of the 
voluntary customer service plan for Continental Airlines, the nation's 
fifth largest airline with hubs in Houston, Newark and Cleveland.
    Continental Airlines, more than most, understands that good 
customer service is key to long term success in the airline industry. 
Just seven years ago, we emerged from our second bankruptcy. We were 
last in DOT metrics on every level. We failed miserably at efforts to 
get passengers to their destination on time; our mishandled bag ratio 
was unacceptable and many of our customers were understandably 
motivated to write the Department of Transportation. We knew that in 
order to attract both business and leisure travelers back to our 
airplanes, we needed to distinguish ourselves.
    Frankly, what all of the airlines do day in and day out is 
basically the same task: we hand out boarding passes to passengers; we 
take a long metal tube with seats and load passengers into that tube; 
we load bags and cargo in the belly of that tube; we wait for the FAA 
to tell our pilot when to takeoff, where to fly while enroute to their 
destination and when/how to land. Since we are all supplying basically 
the same ``event", we have to distinguish ourselves in some way and 
frankly, while you can build a more beautiful airport or gate, the way 
we all try to distinguish ourselves is by providing better customer 
service.
    In the last seven years, Continental Airlines has reworked how we 
provide customer service. And we have been recognized for our efforts. 
Just within the last year we have won the J.D. Power award for 
providing the best long and short haul service; Best U.S. Airline for 
Business Travel from Smart Money Magazine in 2000; Best Airline in the 
U.S. from Fortune Magazine in 1999; Best Airline Website from Forrester 
PowerRankings in 1999; and Best Elite Program and Best Customer Service 
as part of the Freddie Awards from Inside Flyer in 1999.
    But with all that Continental had accomplished in the area of 
customer service prior to last June, we recognized that our passengers 
and the Congress were sending us a wake-up call with their debate about 
passengers' rights. The Congress motivated us to recommit ourselves to 
improving our levels of customer service by working with us to develop 
the voluntary Plans.
    At Continental, we have taken the implementation of our voluntary 
customer service plan (known as Customer First) very seriously. While 
we were already doing several of the ``initiatives'' prior to the 
publishing of the voluntary plans, there were a number of things we 
were not doing at all or we were not doing with consistency. Here are 
just a few examples of what has changed at Continental as a result of 
Customer First:

   While Continental had a policy of providing the lowest 
        available fare, as a result of our Customer First commitments, 
        we developed and installed new software that ensures that 
        reservations agents will always offer the lowest fare available 
        to our customers.

   And, while we would hold a reservation for 24 hours if 
        asked, our policy did not allow a passenger to hold a low fare 
        reservation past its applicable date (e.g. a 14 day fare would 
        not be held to the 13th day--even if you reserved at 11 p.m., 
        14 days before departure, you had just one hour to make up your 
        mind). Now we honor the low fare for 24 hours past the time of 
        reservation no matter when that reservation is made.

   Our baggage liability limit has been increased to $2500 from 
        $1250.

   We have implemented a system-wide policy that pilots and 
        gate agents should issue updates every 20 minutes to keep 
        passengers informed about delays or cancellations. Our previous 
        policy was to keep passengers at the airport or onboard 
        aircraft informed as to delays, etc., but, we didn't have a 
        good program to get the best information to the gate, we didn't 
        stress the importance of providing the information and we 
        didn't have a way to measure performance. Not surprisingly, we 
        didn't have good compliance.

   While we have received numerous awards for the quality of 
        our frequent flyer program, prior to the implementation of 
        Customer First, we did not post the number of frequent flyer 
        redemptions annually on our website and in our newsletters. Now 
        we publish our annual and monthly redemptions each month on our 
        website.

   We now have the capability to provide a customer who asks 
        with the width/pitch for each of our aircraft types seats. 
        Prior to implementation of Customer First, this information was 
        not readily accessible to customer service and reservations 
        agents.

   We now require that our domestic codeshare partners provide 
        comparable consumer plans and policies, a step we did not apply 
        with consistency prior to the implementation of Customer First.

   Because of Customer First we developed coordinated internal 
        policies and procedures to ensure that all appropriate actions 
        are taken to provide food, water, restroom facilities and 
        access to medical treatment for passengers onboard aircraft for 
        more than 2 hours. We negotiated with vendors and other 
        catering services that business hours be extended as well as 
        for the delivery of supplies--we even added diapers and baby 
        food to our on-hand supplies at airport locations.

   We developed a plan in coordination with airport operations 
        and FAA which provides for the safe movement of customers from 
        an airplane to the airport terminal including consideration of 
        aircraft parking locations, walkways and routes, ramp escorts 
        and secure entrances to the airport terminal in the event that 
        an airplane which needs to return to the terminal is unable to 
        pull up to a gate.

    Clearly, the Congressional debate about the quality of customer 
service delivered by the U.S. airlines in recent years has forced all 
of us to put the spotlight on this issue within our own companies. And 
as each of the airlines has intensified our internal review of customer 
service, this has had a positive effect on our passengers because the 
airlines have basically been trying to ``outdo'' each other on a 
multitude of customer service fronts. Consider what we have seen 
implemented by various airlines in just the last few months:

   Several airlines have put additional leg room into part of 
        their cabin.

   Several airlines have put bigger bins for carry-on baggage 
        on their aircraft.

   At least one airline is now providing compensation in the 
        event that a bag is mishandled.

   Airlines have set up new systems (like mobile lounges, hot 
        lines, or service recovery centers) to reaccommodate, 
        passengers in the event of a cancellation or bad weather, etc.

   At least one airline has developed and installed new screens 
        at the gates to provide up to date information for passengers 
        on delays.

    In short, competition to have the best customer service is intense 
and that is a real victory for the consumer!
    Over the last eighteen months, much public attention has been 
focussed on what goes wrong in the airline system but it is important 
to put the quality of airline service in perspective. Here are just a 
few statistics about customer service industry-wide since the voluntary 
programs were developed:

   From January through March of 2000, approximately 133 
        million passengers traveled in the United States on major 
        airlines.

   These 133 million passengers traveled on 1,380,000 flights, 
        the vast majority of which arrived within fifteen minutes of 
        the scheduled arrival times.

   Only one half of one percent of these passengers' bags was 
        mishandled.

   Less than three one thousands of one percent of the 
        passengers complained to the Department of Transportation 
        (4,011 people) in this time period.

   And, for the record, at Continental, where we have toll free 
        fax and phone lines for complaints, and postage-paid postcards 
        in our on-board magazines, complaints versus enplanement are 
        down over 10% for the first three months of this year compared 
        with the same period last year.

    In short, in so many ways air travel is actually working well. But 
is it working perfectly? No. When you think about the monumental task 
of transporting all those people and their bags on all those planes 
every day and then add in the impact of thunderstorms, rain, fog, snow, 
maintenance issues, and runway construction, the result is delays. Some 
would blame the FAA for most of the delays but the fact is that they 
are doing their very best to keep up by managing our aging and 
overburdened air traffic control system with inadequate resources and 
equipment. Truthfully, no matter what the cause of a delay is, it has a 
dramatic impact on our passengers, our employees, our crew time, our 
baggage delivery, our fuel supply, etc.
    The bottom line message for this Committee and for the traveling 
public is that we, the industry, are not done doing everything we want 
and should do for our customers. Good customer service is a day in and 
day out project. Every day we want to do it better than the last. Every 
day new technology comes along that enables us to improve the 
passengers' experience. Every day we have to train our people and yet, 
everyday we will make some mistakes--it's human nature. We know that 
some days we don't do as well as we should. But, we get up the next day 
and do it all over again and try to do it better.
    In short, Customer First is not ``done''--it is and always will be 
a work in progress. But I am here today to tell you that this industry 
and certainly this airline and its 50,000 employees, has been listening 
to you in Congress and to our customers. We are committed to doing the 
best we can today and we are committed to work harder to do it even 
better tomorrow and beyond.
    Thank you for the opportunity to appear before you today.

    Senator Burns. I want to--this on-time thing, you hit on 
it, Mr. Carty, when you responded to Mr. Wyden's question. I 
think on-time arrival is probably a more--gives us a better 
picture of what is going on out there than on-time departure. 
In other words, I can see a little better leeway there as far 
as on-time arrival is concerned, because with this situation 
here it does not paint a real accurate picture of what we can 
engage things in.
    Also, on bags, Mr. Mead, I was surprised you say now on 
lost bags 24 hours should start when it is reported. I come 
from a different view of that. I say you have got to find it 
first. You know, we do not know where it is. And then maybe the 
clock starts running to get it back to you and whatever. But it 
has got to be found first, and I would look at that.
    The lowest fare does concern me, what Mr. Wyden says. I 
think that can be taken up. If you worked in reservations, Ms. 
Jopplin, you are perfectly aware that before you went on a 
shift there was always a little meeting before you sat down at 
your telephones and started answering reservations, doing in-
line or on-line or inter-line. It did not make any difference. 
You had something to refer to.
    Today fares change hourly, it seems like, and that is 
pretty tough to keep up with. But nonetheless, I think that can 
be done at the head of the shift when they go on.
    Do you want to respond to that, or maybe Ms. Escarra could?
    Ms. Jopplin. Thank you, Senator Burns. I would like to 
respond to that. If you will recall, when customers call the 
reservation system many times they will ask, what is the lowest 
fare to a destination, and they will be quoted a range of 
fares. Then they will be asked when their travel date is or 
what date in the future they would be traveling. Then it gets 
more specific.
    The customer is quoted the lowest fare for the applicable 
travel. They have an opportunity to change their dates to 
modify their travel in order to obtain a lower fare.
    I think what is important to understand is that the 
airlines have done programming that automatically offers the 
lowest fare for the applicable travel dates. Second, the 
customer now has the ability to hold that fare for 24 hours 
without penalty. If we are holding a customer's fare for 24 
hours and that fare is a 14-day advanced purchase, for example, 
they have into the thirteenth day to purchase that ticket, and 
that is giving them just a little bit extra time to explore 
alternative distribution methods such as the internet and then 
make their decision.
    Senator Burns. Now, also--that is good to know. Also, give 
me your policy, either Ms. Escarra or you, give me your policy 
on when you learn of a major delay, say a flight is going to be 
an hour late out of Kansas City, OK, and what time before 
departure do you not call the passengers that you have 
telephone numbers on? In other words, is it 2 hours before 
flight time do you try to call your passengers on that flight 
to notify them of a major delay?
    Ms. Escarra. A very good question, Senator. At Delta we 
have a policy that says we will do everything we can if we know 
of a flight being canceled outside of 2 hours to notify 
customers. We have got good information around that that says 
we are doing well. Of the customers whose telephone numbers we 
have on record, we are contacting 80 percent of those customers 
to let them know about that.
    Obviously, within 2 hours, generally speaking people have 
already made attempts to go to the airport.
    Senator Burns. I will say something here. There was a term 
used a long time ago, and everybody travels, this is just 
``RCNNO,'' ``reconfirmation not necessary.'' Remember those 
days? Well, none of us reconfirm. We walk off an airplane and 
then we go do our business and we fly the next day, but very 
seldom do we ever reconfirm what hotel we are staying in while 
we are on the road.
    So I am just wondering. The contact of those people is 
pretty tough. But that was an old term that I threw out there 
that you probably would recognize as an old reservations 
person.
    I say I am going to probably stay on this thing. Like Mr. 
Wyden, I think the fare thing is probably the most important 
thing as far as the customer is concerned.
    Mr. Mead. Mr. Burns.
    The Chairman. Yes.
    Mr. Mead. A point on the lowest fare and your interest 
there. Some airlines' reservations agents, the ones you call up 
on the phone do not know what the lowest fare is that the 
airline has to offer, except for the lowest fare that is 
available via the telephone. They may not have access to the 
Internet fares. So the lowest available fare may not be 
available to the reservation agent.
    Senator Burns. I am going to tell you something. You have 
got a supervisor, a supervisor of that shift, that has ways of 
finding out, I think so that they could be brought up to date 
on that information. I just feel that--but then again, that 
takes extra people, it takes extra, and that is costly. But 
nonetheless, I think you have got shift supervisors that also 
have certain responsibilities, too.
    Mr. Carty. Senator Burns, if I could just make one comment 
on that. I just want to be sure the Committee understands that 
part of the airline commitment was not to make the lowest fares 
on the Internet available over the phone. We never intended 
that. I think the policy of a number of airlines to say on 
their recording, there may be a fare lower available on the 
Internet, is a good one.
    But remember, what we are trying to do by using this new 
Internet technology is to lower our cost of distribution so we 
can offer even cheaper fares. If we have to layer onto the 
selling of those fares reservations calls, we will drive up our 
costs and we will not be able to offer as cheap a fare. So part 
of the whole strategy here is to use today's new technology to 
offer lower fares than we otherwise would be able to if we 
built in the costs that you just referred to.
    So that is why we did not originally make the commitment. 
It is not part of the customer service plan. We do 
differentiate between Internet fares and res fares, and I just 
wanted to be sure that that was understood by the Committee.
    Senator Burns. Thank you, Mr. Chairman.
    The Chairman. Senator Cleland.
    Senator Cleland. Thank you very much.
    All of us, I think, have a vested interest in----
    The Chairman. I am sorry. I am sorry, Senator Cleland. 
Senator Kerry was--I apologize----
    Senator Kerry. No, no, no. You go.
    Senator Cleland. Yes, sir.
    The Chairman. My apologies to both of you. I am sorry.
    Senator Cleland. No, not at all.

                STATEMENT OF HON. MAX CLELAND, 
                   U.S. SENATOR FROM GEORGIA

    Senator Cleland. All of us have a vested interest in a safe 
and secure flight. So many of us in America fly now. So the 
questions of airline services, airline safety, passenger 
convenience, are now a very major public interest.
    Atlanta is the largest airport, the busiest airport, in the 
world. Ms. Escarra, it is also the great hub of Delta Air 
Lines. I would like to know from your point of view what the 
fifth runway, adding the fifth runway at Hartsville, will do in 
terms of its impact on Delta. Will it improve customer service 
by Delta out of that major hub that you have there?
    Ms. Escarra. Thank you for the question, Senator Cleland. 
Clearly it will improve. Around the information that we were 
shown today about delays, pushing back from the gate but not 
taking off, improving. A fifth runway will allow, if you will, 
the constraint to be moved to a further destination away from 
the gate.
    We still have concern, and I will reiterate this, that we 
find solutions on improving the capacity of air traffic 
control. So it will certainly help in the Atlanta hub with us 
having the ability to handle more capacity on the ground and 
generally speaking in the air. But as we get out--that fifth 
runway is actually 3 years away from being completed, as you 
well know. We have got to continue to work on ensuring that we 
do not move the constraint from being capacity on the ground to 
further constraints on capacity in the air.
    Senator Cleland. Capacity in the air, which means in your 
definition the ability of air traffic controllers to handle the 
traffic coming in and out of the busiest airport in the world. 
Is that your understanding?
    Ms. Escarra. That is my understanding.
    Senator Cleland. So with an expansion of a runway it solves 
one problem for you, but then it transfers the problem to 
another part of the system, is that correct? That is the 
crowded corridors the Chairman referred to and the ability of 
air traffic controllers and the FAA to handle that traffic, is 
that correct?
    Ms. Escarra. That is correct.
    Senator Cleland. Mr. Mead, it does seem to me that what we 
are talking about here and the impact on passengers is the 
result of a total system, that the airlines are part of it and 
there are certain things that only the airlines can control. 
But there are other aspects of the system that affect passenger 
service. Sometimes the airlines get blamed fairly, sometimes 
they get blamed unfairly.
    Weather is an uncontrollable factor for any of us. But it 
would be helpful to me, and I do not know whether it is part of 
your charge or not, over the next 6 months as you complete this 
report on passenger service, if you could maybe allude to the 
fact of what is responsible for what. In other words, what are 
the airlines basically guilty of, A, B, C, D, then what are the 
communities around America that are not expanding airports 
guilty of, then what is the FAA and, shall we say, a shortage 
of air traffic controllers guilty of?
    All of this adds up to a very, very serious situation, 
where those of us in the Senate and in the Congress hear 
increasing complaints from passengers, and I understand 
passenger complaints have increased in the airline industry 100 
percent just in 1 year. So, Houston, we have a problem.
    But how do we go about managing this problem? How do we 
deal with it? Is it just a passenger bill of rights here that 
we are talking about? That is like saying we want the cure for 
cancer and we want it now, but then how do we get there? Is 
your report going to help us get there?
    Mr. Mead. I hope to a degree. I think you are right that, 
first of all, passenger service is a tough thing to legislate 
and I do not think you want to have to try to legislate service 
if you can through other measures ensure that it happens.
    Senator Cleland. And I would like to talk about that point 
in just a minute, as you finish.
    Mr. Mead. But as we pointed out in our statement, the 
commitments do not directly address some of the underlying 
sources of dissatisfaction. Those are the delays, the 
cancellations, lengthy lines, lost baggage, and baggage not 
showing up when you arrive.
    Now, I think the airlines can do a lot better job on the 
lengthy lines. That is something that is certainly more within 
their control than delays, because there are all these 
different factors that come into a delay.
    On that point, I would like to say that a year ago we could 
not come up here and really tell you how much air traffic was 
being delayed. That is because everybody had their own system 
of counting delays. The FAA had one system, DOT's Bureau of 
Transportation Statistics had another one, the airlines each 
had their own, and people could argue about whether there even 
was a delay and how much it was.
    Over the past year, FAA and the airlines have gotten 
together and they now have a common base for calculating when a 
delay actually happens. At least that is in place for a number 
of very busy airports. Very key. But they have not pushed the 
envelope yet to where they have a common framework for keeping 
track of why a delay happens. That is why you see a lot of 
finger-pointing. People say, well, it is air traffic control; 
air traffic control says no, it is the airlines and their 
schedules.
    This is something that the airlines and FAA really could 
accelerate if they put their minds to it, so that we would 
start the next year with a framework that people agreed upon 
and we could move beyond the finger-pointing. Now, we will go 
into that in our report on delays and we will also go into in 
our report the different reasons people say that delays occur 
and cancellations occur. But it is very difficult on a system-
wide basis to do that without a system in place.
    Senator Cleland. Mr. Carty, are we gaming the system? I 
mean, I can understand if a plane leaves within 15 minutes of 
the scheduled departure time and you call it a departure on 
time and that is all right with me. But then to get out on the 
runway and sit there for an hour or 2, and to get to where you 
are going, as the distinguished Senator from Montana suggested, 
it is getting there on time. The passengers know whether they 
departed on time and they know when they arrived on time.
    Are we playing games here? And is it correct--and I am not 
trying to be personal here--that some compensation for airline 
executives are based on on-time departure and so therefore if 
you push back at the gate on time then your compensation is OK, 
but if you sit on the runway for 2 hours nobody is held 
accountable? Are we gaming the system here?
    Mr. Carty. I do not think so, Senator. As I said a few 
moments ago, the critical customer service measure in terms of 
dependability has clearly emerged as on-time arrival, not on-
time dependability. And to the extent we have any customer 
service measures in our management's incentive plan, they all 
relate to arrival dependability, not departure dependability. 
When we have extended delays on the runway, the airplane is not 
going to arrive on time, so those numbers will fail.
    So my own view is we are not gaming it, but the statistics 
that Ken shared with you and the deterioration in on-time 
dependability and the increase in cancellations we have seen in 
the country are really happening. As I said earlier in my 
testimony, I am quite pessimistic about our ability to keep up, 
the infrastructure's ability to keep up with the tremendous 
demand that has been stimulated by deregulating this business.
    Senator Cleland. And so much of that is out of your 
control. As an airline executive, you cannot go to a community 
and say, gee, this is a major hub of ours, we wish you would 
put another runway out here so we can do better; or go to a 
half a dozen cities and say, gee, we would like to improve our 
service to these cities because these are key markets of ours.
    Mr. Carty. We are actively engaged as individual airlines 
and as an industry to lobbying local airports on capacity. 
Certainly, as Ken suggested, we are now collaborating much 
better than we were with the FAA on the process of managing the 
air space.
    But I am concerned that the technology and the 
infrastructure, no matter how well we collaborate, simply is 
not going to keep up.
    Senator Cleland. And part of that infrastructure is the 
government, is the FAA, is the air traffic controllers. You are 
really a consumer, you are in effect a customer of that 
government service, is that not correct?
    Mr. Carty. That is absolutely correct.
    Mr. Mead. I think we are gaming the system. I would like to 
pursue that a bit. With all respect to my friend Mr. Carty 
here, I think we are gaming the system on departure delays and 
that we ought to face up to it. When the airline's schedule 
says that a plane is leaving at 10 a.m., for example, the 
airline wants that plane away from the gate within 15 minutes. 
I can tell you, I can see it all over the country, our folks 
see it all over the country.
    They do not tell you, however, if that plane is going to 
back away from the gate between 10 and 10:15 so that it is 
within that 15-minute window, but that it's not going to take 
off. It is not often that I hear the airlines say: And by the 
way, when you pull away from the gate at 10:14 there is another 
2 hours on the runway. I think the airlines can do a lot better 
job of telling people that before they get on that aircraft.
    Senator Cleland. May I just go back to the point where the 
pilot came on the air and said: We are in this situation; I do 
not have a clue what is going on here and I will let you know 
when I find out. He gets applause. I think the American people 
understand that traveling in the airlines is kind of a risky 
business and they do not expect perfection. But I think they do 
expect honesty. I do think they expect total access to 
information, whether it is air fares, the lowest fare 
available, or on-time departure or on-time arrival or whatever.
    I think, like so many aspects of communicating with people, 
if we just tell them the real story, I think we would all get 
along much better. In terms of telling them the real story, Ms. 
Escarra, tell us about Delta's effort here to get more 
information to the traveling public here.
    Ms. Escarra. We briefly mentioned this in the opening, but 
let me go back and just talk. Actually, it ties in with the 
comment that Ken just made, and that is we agree that when we 
know what the delays and-or cancellations are, the causes for 
those, and if we know the length of the delay, we absolutely 
should be communicating that to customers. It is clearly a big 
issue. When you talk to consumers, as we all do day in and out, 
they want to know. They want to manage their time.
    Our systems are tied together so that all of our operating 
systems communicate today--and this is just a month in the 
works--communicate today with what the customer sees on the 
front line and what our gate agents see. It includes a clear 
overview of the content. Now, we still have the issue when you 
push away from the gate, and I think our people are doing a 
much better job of communicating, maintenance, flight crew, 
weather, if we know how long it is going to be.
    But Senator, we still have a problem, as was experienced by 
Don last night, and I got 8 pages during the course of dinner 
about major ATC delay, shutdowns 4 and 5 hours up and down the 
East Coast and over Dallas-Fort Worth. When we are not getting 
any information from FAA, it is tough to tell customers how 
long it is going to be. You think it is tough for all of us. It 
is certainly tough on our staff out there to manage those kinds 
of situations.
    So that continues to be a big concern of ours.
    Mr. Carty. Senator, let me just reiterate. With all due 
respect to Ken, our agents are not aware of how long these 
delays are. Let me read you, if I could, from the FAA's June 
21st--this is on their public web site of what is going on, 
delays by destination: ``One, due to loss of land and hold 
short, departure traffic destined to Boston Logan International 
Airport is currently experiencing delays averaging 2 hours and 
53 minutes, some flights receiving as much as 8 hours and 10 
minutes delay.''
    ``Due to weather, departure traffic destined to New York 
John F. Kennedy International Airport is currently experiencing 
delays averaging 32 minutes, but some flights are receiving as 
much as 1 hour and 45 minute delays.''
    ``New York La Guardia, average 2 hours and 48 minutes, some 
flights 4 hours and 22 minutes.''
    This is last week and this is a typical day with the FAA. 
So for an agent to know which of these is going to happen when 
the airplane pulls back from the gate is an absolute 
impossibility.
    Senator Cleland. Thank you very much.
    Ms. Escarra. Let me add one more thing, Senator, and that 
is the customer information display screens that you are seeing 
here are live and there is a delay on a flight from Fort 
Lauderdale to Atlanta, which is delayed right now based on a 
maintenance problem. So we are telling the customers that it is 
a maintenance issue. We are giving them information about how 
long we expect that delay to be. So this is real-time 
information, again to address your concern.
    Senator Cleland [presiding]. Well, a great challenge to us 
all, Mr. Chairman, and I think we ought to vote on it.
    Thank you all very much for being here.
    Senator Kerry [presiding]. I would like to pick up there if 
I may. You know, I just do not accept that when you say it is 
impossible to know where the delay is going to be. The problem 
is we do not have a system. I mean, you are nodding here. We do 
not have a system. You are running a major airline and we do 
not have a system, in the sense that the FAA is not 
coordinating with you, you are not coordinating with each 
other. I mean, there are various reasons why that happens and 
maybe we have to deal with some of them.
    But I know when you get in that cockpit and you sit there 
and you call clearance control and clearance control comes on 
and they tell you what your clearance is going to be and they 
say, expect a delay of X amount of time usually. So you get it 
straight from clearance control before you push back.
    Now, there ought to be a way with clearance control coming 
in. I do not like the idea of Congress trying to legislate 
service. I agree with you, Mr. Mead. And I was one of those who 
resisted the original passenger bill of rights, based on the 
notion that we ought to give people in the private sector the 
opportunity to up their service.
    But I am beginning to wonder whether we have to create some 
standards that say that you are going to have certain 
expectations about getting off if there is a certain type or 
amount of delay, or there is going to be a right to be able to 
be reimbursed under certain circumstances or so forth.
    As to the gaming issue, I mean, come on, folks. The entire 
schedule is gamed. Delay is written in. An on-time flight to 
Boston is about a 2-and-a-half-hour time period, so you can 
spend an hour-and-a-half on the ground and you still get in and 
the pilot comes on and says: Hurray, we are on time. It is a 
50-minute flight and you are telling us that 2-and-a-half hours 
is ``on time''.
    You game it by building into your schedules the amount of 
time that you anticipate normal delay is now going to be. And 
you are forced to do that because we do not have adequate 
capacity between the FAA and otherwise.
    Why do you all leave at 8 o'clock? Why is every flight 
scheduled for 7, 8 in the morning? Because people want to fly 
then. But every airline says: We are leaving at 8 o'clock. It 
is physically impossible for every airline to leave on the 
schedule you tell people they are going to leave on, physically 
impossible. But you all persist in this myth where we have got 
8 o'clock departures. Not going to happen.
    You know, I learned something. I ran a small business for a 
very brief period of time and it would be laughable compared to 
what you all do. But I learned the fundamentals, because we 
were going to produce edible goods that were natural and so we 
used all natural goods. I knew I had to price these things 
accordingly, and so we had to price them a lot more than goods 
that were not similarly made. But people bought them, and 
within a year, because they were good, we became ``best of 
Boston.''
    You are trying to run a discount business in a mass way 
that pretends it can offer the service, but you cannot because 
you are not pricing them accordingly. I mean, why do we have 
lines? And I do not want to get into the business of picking 
and choosing winners and losers here.
    But why is it that we have to send a wakeup call for an 
entity that is in the business of providing a service to 
people? Why do any of us walk into the terminals anywhere in 
America and see these long lines of people? I am astounded at 
hundreds of people waiting for hours to get to a counter. Why 
is this happening?
    Because you are not putting enough people on, because you 
do not have enough counter space? That costs money? Well, maybe 
the tickets should cost more. Maybe you are not pricing your 
service at the rate that the service costs because you want 
more and more and more people, because you want more people to 
ride on a service that does not have the ability to provide 
people what you pretend you can provide them. That is what is 
happening here. It is exactly what is happening here.
    If you can tell me otherwise, tell me. You are all 
competing with each other to get that lower fare, to get more 
people into an airport that cannot hold more people, to fly 
into airports that cannot hold more airlines. This is the best 
advertisement for Amtrak I have ever heard of.
    Now, am I wrong at that? I mean, are we not gaming this 
thing?
    Mr. Carty. No, you are not wrong. You are talking about to 
some degree the inadequacies of the infrastructure. You walk 
into the Boston Airport at 8 o'clock in the morning, every 
ticket counter position we have is manned. The airport needs to 
be bigger because Boston traffic is growing. We all know that. 
But getting an expansion in Boston, as you know, Senator Kerry, 
is no trivial thing.
    Senator Kerry. And you are doing that and I love it and it 
is going to be a great thing, and I admire you for being able 
to try to pull it off in the midst of everything else that is 
going on up there.
    Mr. Carty. But moving that infrastructure, moving the air 
traffic control infrastructure--I mean, we could go at 9 
o'clock, let everybody else go at 8, and most of the passengers 
are going to go on the 8 o'clock flights.
    Senator Kerry. No, because there are not enough slots to 
take them at that hour and there are not enough aircraft.
    Mr. Carty. There are not slots now. Now, if you impose 
slots then we will put the airplanes where the slots are.
    Either we need to--Ken made this point earlier, I think. 
Either we need to increase the infrastructure or some 
government policymaking people have to define capacity for us 
and we will operate as competitively as we can under that 
environment.
    Actually, most recently Congress is headed in the opposite 
direction. Three of the four airports that have been slot-
constrained are going to become unslot-constrained.
    Senator Kerry. And there is going to be chaos.
    Mr. Carty. As a big operator in Chicago, we are going to 
have chaos in Chicago.
    Senator Kerry. That is right, it is an invitation to it.
    Mr. Carty. Because we have not added capacity. It is an 
invitation to it.
    Now, there are things that can be done to broaden the air 
traffic control infrastructure. As a pilot, I know you know 
this and so I will not go through it. But a lot of it is going 
to involve a lot of technology and a lot of investment, and it 
is not going to happen by next summer.
    Senator Kerry. Well, let me ask you this question. Is it 
true that the spacing is 65 miles on an awful lot of aircraft 
flying cross-country at this point? Do you know what the 
spacing is?
    Mr. Carty. The spacing will change. That is part of the way 
the air traffic control people manage it.
    Senator Kerry. But current spacing, current spacing I 
understand, according to a number of friends in the industry, 
is almost absurd.
    Mr. Carty. It is longer than we believe it needs to be.
    Senator Kerry. I see heads nodding. People are agreeing.
    Ms. Escarra. It is very conservative.
    Senator Kerry. But why? Why are we doing that?
    Mr. Carty. I would say we are managing the existing 
capacity more conservatively than we have ever managed it 
before.
    Senator Kerry. Is there not a greater capacity to 
restructure even some of the corridors, some of the airways, in 
ways that channel aircraft? I mean, it seems to me common sense 
would say we can get some cross-country aircraft coming in at X 
number of altitudes, bringing them down, out over the water, 
bring them back in, in a way that they stay out of the traffic 
on the other side.
    I mean, I see someone sort of saying, yeah, let us go do 
this. Why are we not doing this? I do not understand. It seems 
to me--let us get General Horner, who seems to have a pretty 
good sense of how to coordinate a lot of aircraft at the same 
time, to put a new system together. Would you like that?
    Mr. Carty. I think there is no question in the short to 
intermediate term we are going to have to agree to some rules 
of the road that are different than they are today. The FAA has 
got to coordinate it.
    Senator Kerry. Have you asked the FAA to do that?
    Mr. Carty. I have explicitly asked the FAA to do it.
    Senator Kerry. Have all of the airlines come to them and 
said, will you do this?
    Mr. Carty. I do not know that, Senator Kerry, but I do not 
believe they all have.
    Senator Kerry. Well, do you not represent them all as the 
Air Transport Association?
    Mr. Carty. Well, I certainly do not get to speak for all of 
them, although I would like to on most days. I do not mean to 
be facetious.
    Senator Kerry. But should not all of you be beating down 
the door of the FAA and saying: We can facilitate this; here is 
a plan; we can simplify the approaches and the use of these 
corridors much more efficiently?
    Mr. Carty. Yes, I think we should. In fact, it is a very 
good segue into a comment I was going to make, and that is the 
ATA is focusing right now on putting together a consensus among 
the members of what all the priorities that we think should be 
in place at FAA, both in terms of process and procedure and in 
terms of new technology, and we intend to deliver that to the 
FAA as fast as we can get it done.
    Mr. Mead. You have to look at modernizing the national 
airspace system in 5-year blocks of time, Senator. I see 
measures that need to be put in place over the next 5 years as 
being different than the measures that would be in place 5 
years from now.
    For example, Senator McCain earlier mentioned that later 
this session he is going to hold hearings on ATC modernization. 
One of the big projects that FAA has under way is the Wide Area 
Augmentation System, or WAAS, which is a satellite-based 
navigation system. WAAS will shift navigation from a ground-
based system to a satellite-based system that relies on the 
DOD's Global Positioning System. This is very integral to the 
Free Flight initiative that you have heard about.
    The WAAS program is having a fair number of problems, but 
the airlines, once they can transition to satellite navigation, 
will be able to fly more flexible routes. The airlines will be 
able to do a lot more in reference to those maps in the sky 
that you were suggesting be redrawn. But WAAS, unfortunately, 
is some years away.
    Senator Kerry. Some of the technology is years away. But a 
lot of this is not technology-dependent. A lot of this is just 
common sense, creativity, thoughtfulness, not being stuck in 
bureaucratic mud and being willing to try to coordinate with 
the airlines how we can do this better.
    We cannot tell the American people that we are going to 
keep inviting more and more people into airports that are more 
and more crowded and incapable of providing the service. We 
have got underutilized airports in certain places. I look at a 
place like Westover Air Force Base or other places in New 
England. But we do not have the connections. I mean, this is 
where we need a transportation policy where we have high-speed 
rail and high-speed connection capacity to alleviate it.
    Incidentally, the high-speed corridor in the Northeast 
could alleviate some of it. Now, you do not like to hear that 
because it may mean less people ``flying'', but you do not have 
the infrastructure to support what is flying today.
    So people have got to start making some smarter business 
choices here, I think, respectfully. And I do not understand 
how you board an aircraft where you know there is going to be 
as long a delay as there is. I know you need the gate, so maybe 
somebody has to back the aircraft off and take it out to the 
apron and sit there without the people in the plane. Let them 
have the conveniences of these wonderful airports that are 
being built with stores to buy things in, places to eat, then 
bring it back to the gate and give them 15 minutes to board and 
take them out.
    I mean, there have to be better ways to do this.
    Ms. Escarra. We agree with that. One thing that we are 
clearly doing today versus where we were a year ago is having 
our management team and front line people at the gate talk 
about information that they know, obviously in line with what 
we discussed today, and if it appears that there is going to be 
a 2-hour delay to talk to the customers about that but not 
board the airplane. That is a great point and we are doing 
that.
    Senator Kerry. Well, I need to go vote. There were other 
areas that I wanted to try to pursue with some of you. Maybe we 
can do that by written questions. But I know the FAA is 
planning some of this redesign and I know that we are behind in 
terms of some of the technological expenditure that should have 
been made. I have for a number of years now been ranting about 
Congress' own inadequacy in responding to this in terms of the 
capital costs of some of the technology that ought to be put 
out there.
    But I cannot, notwithstanding all of those difficulties, 
excuse easily the lack of coordinated effort that ought to be 
taking place to deliver a better service here. And I feel so 
badly for good people behind those counters who endure the 
wrath of so many people on a daily basis. They are good folks 
and they are the victims, too. They do not know what is going 
on. They cannot get the answers. It is very tough on them.
    So I think we have really got to see the leadership of the 
industry take initiative here and help to make it happen. And 
we will do everything we can to leverage the FAA, leverage the 
government response, and make certain that we are being 
creative and thoughtful here.
    But when I hear about some of these spacings and some of 
the reasons for delay and the excessive sort of bureaucracy 
that is restraining people from some creative and thoughtful 
kinds of responses here, particularly given some of the 
technology we have in the air today--I mean, the TCAS and other 
kinds of things that are improving safety--it seems to me we 
can do better, all of us, and I hope we are going to do it.
    I have got to go vote. I thank you for being here. Mr. 
Mead, we will look forward with great anticipation. You can get 
a sense from the Committee that you are on the right track, and 
we are going to watch with interest.
    I hope the airlines will come to us and ask us. Do not wait 
for us to come here to the next hearing and say, look, this is 
the problem. I will convene a meeting. I am sure the chairman 
will happily get the FAA and people at some meetings. Let us 
get people together and see if we can constructively get a 
response to this, because we are all going to suffer greatly if 
we are just promising Americans another summer like this one. 
That just is unacceptable.
    With that, we are adjourned. Thank you.
    [Whereupon, at 12:12 p.m., the Committee was adjourned.]


                            A P P E N D I X

     Response to Written Questions Submitted by Hon. Slade Gorton 
                        to Hon. Kenneth M. Mead

Question 1. You report that the Commitment does not directly address 
underlying reasons for customer dissatisfaction, such as extensive 
flight delays, baggage not showing up on arrival, long check-in lines, 
and high fares in certain markets. In your opinion, until the airlines, 
FAA, and others also effectively address these areas, there will 
continue to be discontent among air travelers. How did you come to that 
opinion? Who are the ``other'' that you refer to?
    Answer. The sources for identifying the underlying reasons for 
customer dissatisfaction are found in DOT'S Air Travel Consumer Report, 
independent surveys conducting by consulting firms such as JD Power, 
and academic studies by Universities. ``Others'' we refer to include 
airport operators and organizations representing airline employees such 
as flight attendants and pilots.

Question 2. It has been six months since the airlines have implemented 
their customer service plans. You are of the opinion that this is not 
enough time to evaluate the effectiveness of these plans, but that at 
the 12-month, it should be possible to judge the success of these 
plans.

If you ultimately conclude that the airlines' plans have been 
successful, or that a small portion of the airlines has not met the 
grade, would there be any need for OIG to continue monitoring the 
execution of the plans or let ATA and its member airlines do the 
monitoring?
    Answer. Periodic monitoring would have a healthy effect of keeping 
the airlines vigilant and focused on customer service. In fact, 
subsequent to our Interim Report, Chairman McCain and Senators 
Hollings, Rockefeller and Wyden have requested that we continue to 
monitor, review, and report, following the release of our final report 
in December, on the implementation of the customer service commitments 
and airlines plans. The results in our final report will determine the 
scope of follow-on reviews. We may find that there are only a few 
customer service areas that require continuous monitoring, especially 
those that are governed by DOT regulations such as involuntary denied 
boardings.

If you ultimately conclude that the airlines' plans were not 
successful, would you recommend that Congress legislate good customer 
service?
    Answer. Good customer service, like good management, is difficult 
to legislate. If we find areas that lend themselves to legislation, we 
would recommend that actions be taken. It is important to note that 7 
of the 12 commitments and corresponding provisions in the airlines' 
plans are already covered by existing legislation. For example, the 
requirement for accommodating persons with disabilities are found in 
the Air Carrier Access Act of 1986 and codified in title 14 Code of 
Federal Regulations Part 382.
    Other areas of the commitments and their implementing plans, such 
as the 24-hour hold or refund for reservations made over the telephone; 
offering the lowest fare available over an airline's telephone 
reservation system, returning delayed or mishandled baggage within 24 
hours; and accommodating passengers put into an oversight status due to 
Airline operations could be covered by legislation if circumstances 
warrant. While such legislation is possible, we would much prefer the 
airlines achieve good customer service through healthy competition.
    Another reason we hope the Airlines implement good customer service 
on their own is that some areas in need of attention are difficult to 
legislate. One such example is the commitment to meet customers' 
essential needs during long aircraft delays. As currently written, the 
provision uses general terms such as ``food,'' ``every reasonable 
effort,'' ``for an extended period of time,'' or ``emergency.'' These 
terms are not clearly defined and do not provide the passenger with a 
clear understanding of what to expect.

Question 3. You report that most of airlines did not have performance 
measurement systems in place to gauge where the airlines were with 
respect the success of their plans.

Were you surprised to find this to be the case?
    Answer. Yes. We would have expected to see established, credible, 
time-tested systems for monitoring customer service, including 
performance goals and measures.

What would you expect to see in respect to an airlines performance 
measurement system?
    Answer. At a minimum, a credible tracking system for compliance 
with its Plan, buttressed by performance goals and measures. The 
airlines argue that most of the commitment provisions can not be 
measured quantitatively. However, we disagree because we have designed 
tests for measuring each provision quantitatively, and have, so far, 
been successful in doing so.

What have the airlines done to assure you that performance measurement 
systems are in place and properly executed?
    Answer. We discussed our concerns about the lack of performance 
measurement systems with the airlines. Based on those discussions, the 
carriers have committed to take action by establishing performance 
measurement systems. We have had an opportunity to review several of 
the airlines' performance measurement systems and the systems, if 
properly executed by the airlines, should be an effective tool for 
measuring success of their customer service plans.

Question 4. You reported that the majority of Airlines did not have a 
system in place for tracking what they considered to be their 24-hour 
window. As a result, the Airlines could not ensure they were in 
compliance with the provision.

Do you have any assurances from the airlines that systems are in place 
to track compliance with this commitment?
    Answer. As part of their performance measurement systems, the 
Airlines assured us that systems to track and monitor compliance with 
the Commitment would be implemented. So far, however, our testing has 
shown that most the airlines have come up short in putting a tracking 
system in place to ensure that misrouted and delayed baggage is 
returned to the passenger within 24 hours.

Have your testers had a chance to see any of the systems in place and 
whether they are working?
    Answer. Our testing is ongoing and the results are mixed. We have 
seen at the different airports visited that there is really no uniform 
tracking system in place within an airline's operations or among the 
airlines. We have found tracking systems in place and being used; in 
place and not being used; and simply not in place. At those airports 
where the airlines had a tracking system in place and being used, our 
testing showed higher levels of compliance with this Commitment to 
return baggage with in 24 hours.

Question 5. The airlines have said they should not be judged on their 
customer service plans yet and everyone should withhold judgment until 
the end of the year, when they will have ample time to implement their 
plans. Would you expect the number of complaints will decrease by the 
end of the year as the airlines continue to implement their plans?
    Answer. We would hope to see complaints decrease as the airlines 
continue to implement and improve on their customer service plans. 
However, there are different dynamics that make it very difficult to 
predict if complaints will decrease or increase. The reality is that 
the Internet has undoubtedly made it easier to file a complaint to DOT. 
In addition, the increased visibility of airline customer service in 
Congress and the national media may have an influence on the number of 
complaints filed with DOT. It is clear that there has been an increase 
in complaints in 1999, continuing on into 2000. For example, complaints 
for the first 6 months of 2000 increased 60 percent (6,584 to 10,530) 
over complaints during the same period in 1999. As expected, flight 
problems (delays, cancellations, and missed connections) ranks as the 
number one complaint. Also, the trend for 2000 shows consumer 
complaints on the rise, month to month. For example, complaints for 
June 2000 increased 43 percent (1,495 to 2,141) over complaints in May 
2000. Because of the different factors involved, especially the new 
technology of the Internet, DOT may want 2000 as the new baseline year 
for measuring whether air travel consumer complaints have increased or 
decreased.
                                 ______
                                 
      Response to Written Questions Submitted by Hon. John McCain 
                        to Hon. Kenneth M. Mead
Question 1. With respect to the airline commitment to offer consumers 
the lowest fare, you report that there were sufficient number of cases 
in which the lowest fare was not offered to warrant that the airlines 
pay special attention to this area.

What do you mean by sufficient number?
    Answer. At the time of our report, we had tested three airlines 
making 272 telephone reservations based on statistical sample of 
flights, and found for 13 of the reservations made the lowest fare was 
not offered.

What was the error rate?
    Answer. This equates to a simple arithmetic error rate of 5 
percent. However, using statistical sampling we will be able to project 
a more precise error rate to the sampled population once we have 
completed all our testing and analysis.
    We recently completed testing at 8 other airlines and found that 
the lowest available fare was offer at least 99 percent of the time for 
7 of the 8 airlines. However, for the remaining one airline, we found 
an error rate of 15 percent. We expect by year end to make a qualified 
statement on the percentage of compliance, by airline, for offering the 
lowest fare available.

Question 2. You have reached out to industry groups representing the 
disabled to assist in testing the industry's compliance with the Air 
Carrier Access Act. Do you have any results to report on how well the 
survey is working and whether the airlines are complying?
    Answer. To date, we have not received enough information to arrive 
at a conclusion on whether the airlines are complying with the Act. We 
have recently posted on the DOT'S OIG web site a survey that will help 
us evaluate how well the US. airlines are accommodating the needs of 
air travelers with disabilities and special needs. We have reached out 
to 11 different organizations representing persons with disabilities 
and special needs to assist in the survey. Organizations such as the 
Paralyzed Veterans of America, National Association for the Deaf 
American Federation for the Blind, and the National Organization on 
Disability will have direct access to the survey through the Internet. 
We do expect by year end to make a qualified statement on the treatment 
of persons with disabilities and special needs during air travel.

Question 3. Are passengers who purchase electronic tickets at a 
disadvantage when it comes to the information they receive regarding an 
airline's customer service plan or contract of carriage? In other 
words, what do the airlines do to ensure that passengers who fly 
ticketless receive the same information ahead of time as those who 
purchase traditional tickets?
    Answer. Various DOT regulations require US. and foreign air 
carriers to provide consumer notices on or with passenger tickets. 
These notices provide information about protections afforded by federal 
regulations, limitations on air carrier liability, and contract terms 
that passengers may not otherwise be aware of such as ticket refund 
penalties or baggage liability limits. DOT'S Statement of Compliance 
Policy: Ticketless Travel: Passenger Notices filed under Docket No. 
OST-96-993 and published in the Federal Register Vol. 62, No. 77, dated 
April 22, 1997, states that the consumer notices required by Department 
regulations must be given or be made readily available to 
electronically ticketed passengers in writing no later than the time 
that the passengers check-in at the airport for the first flight of 
their itinerary. However, DOT also opined that airlines may find it 
advantageous to continue to provide DOT ticket notices to ticketless 
passengers in advance. In our review, we have found that most of the 
airlines provide its ticketless passengers, at the time of purchase or 
shortly thereafter, the consumer notices required by DOT. The consumer 
has a choice of having the notices mailed, e-mailed or faxed.

Question 4. Your report states that cancellations increased 68 percent 
between 1995 and 1999. While I understand you have a separate review on 
flight delays and cancellations, in general, what percent of 
cancellations are the results of airline operations versus other 
factors that are beyond the control of the airlines?
    Answer. Based on information we received from 8 of the 10 major air 
carriers during our audit of flight delays and cancellations, 
approximately 66 percent of cancellations between 1995 and 1999 were 
due to service irregularities within the carriers control such as (1) 
aircraft maintenance and equipment, (2) lack of aircraft/flight crew, 
or (3) lack of ground support services, such as fueling. There are also 
other miscellaneous factors attributable to cancellations reported by 
the carriers but not necessarily within their control, such as runway 
closures or FAA security checks. However, cancellations attributable to 
these factors represent a very small percentage. The air carriers also 
attributed 26 percent of cancellations over this period to poor weather 
and 8 percent to FAA's Air Traffic Control (ATC). In 1999, 
approximately 54 percent of cancellations were due to service 
irregularities within the carriers control, followed by weather (32 
percent) and ATC (14 percent).

Question 5. Your report states that for the most part, the airline's 
commitment for better customer service was essentially a recommitment 
to place a substantially greater emphasis on compliance with existing 
law and airline policies and procedures. Should government do a better 
job of enforcing the existing laws and regulations related to customer 
service?
    Answer. We agree that the DOT should do a better job of enforcing 
the existing laws and regulations related to customer service, 
especially regulations pertaining to accommodating the needs of air 
travelers with disabilities. A recent report submitted to the President 
from the National Council on Disability (NCD) discloses that although 
things have improved since the Air Carrier Access Act was passed in 
1986, people with disabilities continue to encounter frequent, 
significant violations of the statue and regulation. However, as 
pointed out in both the NCD's report and our Interim Report, we believe 
there is cause for concern whether the oversight and enforcement 
expectations for the DOT'S Office of Aviation Enforcement and 
Proceedings significantly exceed the office's capacity to handle the 
workload in a responsive manner.
    For example, resources dedicated to the Aviation Enforcement Office 
are inversely proportionate to its workload. Staffing has declined by 
more than half during a period when the office's workload has been 
expanding: air traffic more than doubled, complaints increased from 
7,665 in 1997 to 20,495 \1\ in 1999, additional requirements were 
established (such as the Air Carrier Access Act and the Aviation 
Disaster Family Assistance Act), and recently, the Commitment emerged 
as an important element in protecting passenger rights. An issue that 
office will face soon is whether policies contained in the Commitment 
and the Airlines' implementing plans are enforceable of they are not 
also contained in the Airlines' contracts of carriage.
---------------------------------------------------------------------------
    \1\ Total number of aviation consumer complaints filed with DOT for 
the entire industry (U.S. air carriers, foreign air carriers, tour 
operators, etc.).

Question 6. Do you think telephone reservation agents should be 
required to tell passengers that they could find lower fares on the 
Internet? Do you think that these reservation agents would feel that 
they are putting themselves out of a job by telling people to use the 
Internet?
    Answer. In our discussions with the airlines' telephone reservation 
agents about the Commitment provision to offer the lowest fare 
available, we found no evidence that the agents would feel their jobs 
were in jeopardy if they disclosed to the customer that lower fares may 
be available on the Airlines Internet web sites. Also, as part of their 
customer service plans, 8 of the 14 airlines disclose to the consumer 
that lower fares may be available on their Internet web sites or other 
distribution systems. Additionally, four airlines already notify the 
customer through an on-hold message in their telephone reservation 
systems that lower fares may be available through other distribution 
sources and during different travel times. In our Interim Report, we 
suggested that the airlines (10 of 14) that have not already done so 
should consider affirmatively informing the customer that lower fares 
may be available if the customer has a flexible schedule, or through 
other airline distribution systems including their Internet web sites.
    Also, in our review of this Commitment provision, we found that 
airline Internet fares are not part of the airlines computer 
reservation systems and telephone reservation agents do not have access 
to the airlines Internet fares and fare rules. Therefore, we believe 
that airline telephone reservation agents should only be required to 
notify consumers that lower fares may be available on the airline's 
Internet web site and should not be required to quote Internet fares.

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