[Senate Hearing 107-1082]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107-1082

    DOT INSPECTOR GENERAL'S FINAL REPORT ON AIRLINE CUSTOMER SERVICE

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2001

                               __________

    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 SEVENTH CONGRESS

                             FIRST SESSION

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois        RON WYDEN, Oregon
JOHN ENSIGN, Nevada                  MAX CLELAND, Georgia
GEORGE ALLEN, Virginia               BARBARA BOXER, California
                                     JOHN EDWARDS, North Carolina
                                     JEAN CARNAHAN, Missouri
                  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 February 13, 2001................................     1
Statement of Senator Burns.......................................    37
Statement of Senator Carnahan....................................    29
    Prepared statement...........................................    40
Statement of Senator Edwards.....................................    40
    Prepared statement...........................................    40
Statement of Senator Fitzgerald..................................    43
Statement of Senator Hutchison...................................     4
Statement of Senator Kerry.......................................     3
Statement of Senator Lott........................................    46
Statement of Senator McCain......................................     1
    Prepared statement...........................................     2
Statement of Senator Rockefeller, IV.............................    33
    Prepared statement...........................................    33
Statement of Senator Smith.......................................    50
Statement of Senator Snowe.......................................    30
Statement of Senator Wyden.......................................     5

                               Witnesses

Hallett, Carol B., President and CEO, Air Transport Association 
  of America.....................................................    18
    Prepared statement...........................................    20
Mead, Hon. Kenneth M., Inspector General, Department of 
  Transportation.................................................     6
    Prepared statement...........................................    10

 
    DOT INSPECTOR GENERAL'S FINAL REPORT ON AIRLINE CUSTOMER SERVICE

                              ----------                              


                       TUESDAY, FEBRUARY 13, 2001

                               U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9 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. In January 1999, tremendous 
attention was focused on airline passenger rights when hundreds 
of passengers were stuck in planes on runways in Detroit for up 
to eight and one-half hours. As a result of this episode, and 
other horror stories, Senator Wyden and I introduced S. 383, 
the Airline Passenger Fairness Act, a bill cosponsored by 
Senators Hollings and Rockefeller.
    After a series of hearings, this committee passed S. 383, 
which had evolved to provide the oversight mechanism for the 
voluntary Airline Customer Service Commitment agreed to by the 
Air Transport Association airlines. The bill, which was enacted 
into law as part of AIR-21, required Department of 
Transportation Inspector General Ken Mead to audit the 
airlines' performance of their commitments. As part of their 
voluntary commitment, the airlines began to implement their 
individual plans in December 1999.
    In June of last year, the Department of Transportation 
Inspector General issued his interim report on how well the 
airlines were living up to their voluntary customer 
commitments. At that time, the IG reported mixed results. The 
airlines were still struggling with aspects of their plans. 
Some success had been obtained, but the IG's interim report 
raised serious questions about the adequacy of the airlines' 
actions to meet the basic standards of customer service. At 
that time, I committed to wait for the release of the IG's 
final report before deciding on a further course of action.
    Yesterday, the IG released the final report on the 
voluntary Airline Customer Service Commitment. In the report, 
the IG found that the airlines have made significant inroads on 
the basic customer service issues to which they committed. I 
commend the airlines on their efforts. It is clear that they 
have invested significant amounts of time and money into 
attaining these goals.
    However, many argue, and I agree, that what the airlines 
agreed to in their commitments were merely minimum basic 
passenger needs. The Inspector General's final report finds 
that the airlines are still deficient in many of these areas of 
basic customer service. This causes me great concern. After a 
year, we are still not in a position where basic customer 
service needs are being met.
    There are clearly other strains on the aviation system that 
impair the airlines' ability to provide flights that are not 
delayed or canceled. Weather, congestion and antiquated air 
traffic systems cause tremendous system-wide problems. However, 
bad weather does not cause mishandled baggage and congestion 
does not prohibit giving timely information on delays. For the 
record, I find it difficult to believe that the ``seamless 
travel'' and ``network benefits'' touted by airline merger 
proponents will improve this situation by any degree.
    The broad-ranging, systemic problems facing the industry 
will be studied by this committee when we look further at the 
air traffic control system and ways to increase system capacity 
and inject competition into the market. Today, we are focused 
on basic passenger needs that should be met in any situation.
    Mr. Mead has released a concise, thoughtful report with a 
series of recommendations to further the goals set forth by the 
voluntary Airline Customer Service Commitment. I, along with 
Senators Hollings and Hutchison, am prepared to introduce 
legislation this afternoon to fully implement these 
recommendations.
    Mr. Mead is with us today to discuss his findings and 
recommendations. Ms. Hallett is here to discuss the industry 
response to this report. Thank you both for coming.
    [The prepared statement of Senator McCain follows:]

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

    In January of 1999, tremendous attention was focused on airline 
passenger rights when hundreds of passengers were stuck in planes on 
runways in Detroit for up to 8\1/2\ hours. As a result of this episode, 
and other horror stories, Senator Wyden and I introduced S. 383, the 
Airline Passenger Fairness Act, a bill cosponsored by Senators Hollings 
and Rockefeller.
    After a series of hearings, this committee passed S. 383, which had 
evolved to provide the oversight mechanism for the voluntary Airline 
Customer Service Commitment agreed to by the Air Transport Association 
airlines. The bill, which was enacted into law as part of AIR-21, 
required Department of Transportation Inspector General Ken Mead to 
audit the airlines' performance of their commitments. As part of their 
voluntary commitment, the airlines began to implement their individual 
plans in December 1999.
    In June of last year, the Department of Transportation IG issued 
his interim report on how well the airlines were living up to their 
voluntary customer commitments At that time, the IG reported mixed 
results. The airlines were still struggling with aspects of their 
plans. Some success had been obtained, but the IG's interim report 
raised serious questions about the adequacy of the airlines' actions to 
meet the basic standards of customer service. At that time, I committed 
to wait for the release of the IG's final report before deciding on a 
further course of action.
    Yesterday, the IG released the final report on the voluntary 
Airline Customer Service Commitment. In the report, the IG found that 
the airlines have made significant inroads on the basic customer 
service issues to which they committed. I commend the airlines on their 
efforts. It is clear that they have invested significant amounts of 
time and money into attaining these goals.
    However, many argue, and I agree, that what the airlines agreed to 
in their commitments were merely minimum basic passenger needs. The 
IG's final report finds that the airlines are still deficient in many 
of these areas of basic customer service. This causes me great concern. 
After a year, we are still not in a position where basic customer 
service needs are being met.
    There are clearly other strains on the aviation system that impair 
the airlines' ability to provide flights that are not delayed or 
canceled. Weather, congestion and antiquated air traffic systems cause 
tremendous system-wide problems. However, bad weather does not cause 
mishandled baggage and congestion does not prohibit giving timely 
information on delays. For the record, I find it difficult to believe 
that the ``seamless travel'' and ``network benefits'' touted by airline 
merger proponents will improve this situation by any degree.
    The broad-ranging, systemic problems facing the industry will be 
studied by this committee when we look further at the air traffic 
control system and ways to increase system capacity and inject 
competition into the market. Today, we are focused on basic passenger 
needs that should be met in any situation.
    Mr. Mead has released a concise, thoughtful report with a series of 
recommendations to further the goals set forth by the voluntary Airline 
Customer Service Commitment. I, along with Senators Hollings and 
Hutchison, am prepared to introduce legislation this afternoon to fully 
implement these recommendations.
    Mr. Mead is with us today to discuss his findings and 
recommendations. Ms. Hallett is here to discuss the industry response 
to this report. Thank you both for coming.

    The Chairman. Senator Kerry.

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

    Senator Kerry. Mr. Chairman, I'll be very brief as you 
requested. I apologize. I do have to go to another meeting and 
then come back.
    Let me just say quickly that this committee, and the entire 
review process of the Congress have produced some positive 
results. We need to acknowledge that. Some good things have 
happened and the airlines have made a bonafide effort to help 
make some of those good things happen. On the other hand, there 
are still some very obvious problems.
    On the good side, I think people realize that they can make 
a 24-hour hold on a reservation without purchasing. There is 
better information given about lowest available fare. There are 
a number of very positive steps.
    But it seems as if there is a sort of consensus that with 
respect to delays, particularly delays that for whatever 
reasons the airlines don't feel they have a responsibility, 
there seems to be a lack of capacity to still inform 
passengers, and provide them with information. I know the 
Department of Transportation consumer report shows that on a 
hundred different regularly scheduled flights, they are late I 
think it is 79 percent, almost 80 percent of the time.
    People should be informed of those kinds of problems ahead 
of time as they book. I think that would significantly reduce 
the anxiety and anger that is created as a result of this.
    In addition to that, it seems to me that we have to 
recognize one thing, Mr. Chairman, very importantly. The three 
most significant reasons for delays are not within the capacity 
of the airlines to completely control.
    No. 1 is weather. No. 2 is the air traffic control system 
of the country and No. 3 are the sometimes disagreements that 
arise between management and labor that manifest themselves in 
certain ways. Obviously, that has a profound impact on those 
airlines.
    But not withstanding those three which this committee needs 
to be thoughtful about, the fact remains that information can 
flow better about delays, people can be told ahead of time 
before they go to the airport for a flight that they learn was 
canceled when they get to the airport, but which was in fact 
canceled sometime prior to departure for the airport, but 
they're not told that even though they telephone. I mean, there 
are ways to do this in this virtual real-time world that we 
live in.
    So, Mr. Chairman, thank you for having this oversight 
hearing. I think this is an ongoing process of this committee's 
ability to make the transportation system, particularly the 
airlines, more amenable to change. I think that's happening and 
hopefully we can take the next steps now. Thank you.
    The Chairman. Thank you.
    Senator Hutchison.

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

    Senator Hutchison. Thank you, Mr. Chairman. I want to thank 
you for asking for this study. I certainly think it was the 
right approach to set some standards that we would ask the 
airlines to meet and then monitor how they have done.
    I am pleased that in some areas there has been progress. I 
would just like to say as Chairman of the Aviation Subcommittee 
that I think we are working on dual tracks here. I think the 
Chairman of the Committee, Senator McCain, you've taken the 
lead on the passenger bill of rights and the right to know and 
having the most up-to-date information available which I think 
is a very important part of this process.
    I plan to also take the lead on addressing the cause of 
these delays. I want to have the information available. I want 
passengers to have more options. But I am also working on the 
second track which is to direct the FAA to develop 
recommendations to deal with over scheduling at peak hours. It 
is clear if you have got 20 airlines that are saying they are 
going to take off at 8:45 that that cannot happen.
    So let us look at the over-scheduling at peak hours. In 
consultation with the new Secretary of Transportation, we have 
discussed streamlining and shortening the environmental reviews 
so that we can get the new runways built and alleviate the 
congestion that we find on the ground at the airports.
    The same goes for building terminals and gate facilities. I 
think we need a uniform definition of delay that includes a 
situation where a flight is pushed away from the gate but sits 
on the tarmac. That should be included in the definition of 
delay.
    All of us have sat on the ground for hours and not been 
able to take off. Recently, a flight I was on sat on the ground 
for 4 hours and then the plane ran out of gas on the way to the 
destination. We had to stop and refuel before we got to the 
destination of the non-stop flight.
    Every passenger has a story like this. I understand the 
Chairman even had one from yesterday. So we are going to try to 
address some of the real causes of these delays and 
cancellations as well as the information that we would expect 
airlines to give passengers.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Wyden.

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

    Senator Wyden. Thank you, Mr. Chairman. I very much 
appreciate your scheduling this hearing. Mr. Chairman, 
yesterday afternoon, my staff sent your staff a detailed set of 
specs for a new passenger bill of rights. I want to make it 
clear I am very anxious to work with you and Senator Hutchison 
in terms of trying to get that legislation moving.
    Mr. Chairman and colleagues, this is a superb report, 
meticulously researched. I want to make only a couple of 
comments. Because we want to hear from Mr. Mead and Ms. 
Hallett.
    First is the airline industry has been a bottomless pit of 
excuses with respect to putting in place a strong set of 
protections for America's airline passengers. I am very hopeful 
that this time the U.S. Congress will not back off. We are 
going to be subject again to an extraordinary charm offensive 
by America's airlines which will have as part of it every 
possible rationale for holding off strong action.
    After 18 months, what Ken Mead has shown in this report is 
that voluntary measures alone are not going to produce 
significant relief for America's passengers.
    I want to make it clear that I am very supportive of the 
points that Senator Hutchison has made with respect to 
infrastructure. There is no question, none whatever, that 
demand exceeds capacity right now in America's airline sector 
and that we have to make sure that they have adequate numbers 
of computers and runways and essential infrastructure. So I'm 
going to be there every step of the way for that agenda.
    But you don't need to pour more concrete to start requiring 
that these airlines share with the passengers information that 
is in their possession. That's essentially what we ought to be 
doing with respect to a passenger bill of rights.
    For the life of me, I cannot figure out why we can't have a 
truth in scheduling requirement that says for these flights 
that are persistently delayed that that kind of information 
should be made available to the public. The automobile industry 
has lemon laws. You can't cancel a performance at the local 
movie house because enough people don't show up. Now I think we 
ought to stop giving the airline industry a political free 
ride.
    So I'm anxious to work with my colleagues. This issue has 
been a bipartisan one from the very beginning. I hope that 
ultimately this time the U.S. Senate will not back off. I think 
it was a mistake to do that 18 months ago and I hope things 
will be different this time.
    Mr. Chairman, I look forward particularly to working with 
you and Senator Hutchison to ensure that this bill is 
bipartisan and gets on the President's desk. I thank you.
    The Chairman. Thank you, Senator Wyden. As the chief 
backer-offeror, I appreciate your kind remarks. Mr. Mead and 
Ms. Hallett, welcome. Mr. Mead, welcome back before the 
Committee. We would like to hear your comments and followed by 
Ms. Hallett.

         STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR 
             GENERAL, DEPARTMENT OF TRANSPORTATION

    Mr. Mead. Thank you, Mr. Chairman. I will discuss the 
results of our work and as directed by law make a set of 
recommendations for improving consumer protections afforded air 
travelers.
    We are making about 25 recommendations. They are before 
you, in our final report and in our prepared statement. I will 
just touch on the highlights.
    Before I begin, I want to emphasize that the Air Transport 
Association (ATA) and the airlines cooperated fully with us. I 
should say before we get into our findings something about the 
magnitude of this effort. It was substantial, probably the 
largest external audit our office has ever performed. With your 
permission, I would like to submit the names of the staff that 
worked on it for the formal record.

             Exhibit C.--Major Contributors to This Report

    The following staff members contributed to this report:
    Audit Team: Alexis M. Stefani, David A. Dobbs, Robin K. Hunt, Scott 
Macey, Lester Girdlestone, Anne Longtin, Petra Rose, Shirley Murphy, 
David Brown, Gloria Echols, Donald Emery, Carlton Hamilton, Todd Kath, 
Deborah Kloppenburg, Jeffrey Mortensen, Darren Murphy, Paul Nagulko, 
James Nelson, Patrick Nemons, Adrienne Simms, Nelda Smith, Lisa Stone, 
Paul Streit, Sharon Trodden, James Wahleithner, Susan Zimmerman.
    Legal Counsel: Brian Dettelbach, Tom Lehrich, David Koch.

    The Chairman. For the record, and we thank them for their 
hard work.
    Mr. Mead. Now, we tested implementation of the airlines' 12 
point commitment at their corporate offices, reservation 
centers and airport facilities of the 14 ATA airlines and three 
non-ATA airlines; observed airline operations at 39 airports, 
including observing and experiencing first-hand approximately 
550 delayed flights and 160 canceled flights; reviewed 4,100 
mishandled bag claims; placed nearly 2,000 phone calls to 
reservation centers; and reviewed the compensation provided 
over 800 passengers who were either voluntarily or 
involuntarily bumped and the treatment of about 380 disabled 
and special needs passengers.
    Overall, we found that the airlines were making progress 
toward meeting their customer service commitment. It has been a 
plus for air travelers on a number of important fronts.
    The commitment, I think, is also noteworthy, because it 
prompted the airlines to take the matter of improving customer 
service much more seriously than previously had been the case.
    Also, the airlines were generally responsive to the 
recommendations we made in our interim report. But the 
airlines, the airports, FAA and most important the traveling 
public, all know the aviation system is not working well. The 
road ahead is long. Aggressive progress is going to be required 
by the airlines, the airports and FAA if consumer confidence is 
going to be restored.
    Now, notwithstanding the progress I mentioned, we continue 
to find very significant shortfalls in communication with 
passengers by the airlines about flight delays and 
cancellations. We also found that the airlines' commitment does 
not directly address the most deep-seated, underlying cause of 
the dissatisfaction, which is the delays and cancellations. Nor 
does it say what the airlines plan to do about delays and 
cancellations in the areas under their control in the immediate 
term.
    Action here is critical because major improvements in 
providing capacity to meet demand, like new runways and, new 
technology, are not going to be in place for at least the next 
several years.
    Meanwhile, the year 2000 was a record one and not in a good 
way. One in every four flights was affected by delay or 
cancellation. The average delay was over 50 minutes. Consumer 
complaints were at record levels.
    The next major crunch in air travel is likely just around 
the corner, in the Spring/Summer of 2001. I will move to the 
specifics of what we found. I would like to get to the 
positives of our findings first.
    In general, we found the areas where the commitment was 
working well and the greatest progress being made were for 4 of 
the 12 commitments, all in areas not directly associated with 
whether a flight is delayed or canceled:
    Specifically, for the airlines' commitment for quoting the 
lowest fare available over the phone, we found compliance 
between 88 and 100 percent of the time for a fixed itinerary.
    For the commitment for holding non-refundable reservations 
at the fare quoted for 24 hours or canceling a reservation 
within 24 hours without penalty, we found compliance between 88 
and 100 percent of the time.
    For the commitment to make timely responses to complaints, 
we found compliance between 61 and 100 percent of the time, 
with 13 Airlines compliant between 93 and 100 percent of the 
time.
    I should say these complaint responses were not just 
acknowledgments. They were fairly substantive, although the 
passenger may not always agree with the disposition of that 
particular complaint.
    The airlines are now making larger pay outs for lost 
luggage too--the liability limit was raised from $1,250 to 
$2,500 and we have seen good results.
    Now, the airlines also committed to fairness and 
consistency in ``bumping'' practices and to make prompt ticket 
refunds. First, regarding ``bumping'' passengers on flights 
that are oversold. We found a need for improvement, especially 
since the number of people being bumped is increasing. About 15 
percent more people were bumped in 2000 than in 1999.
    Among other things, the policies about who gets bumped 
first varied among the airlines, and the compensation limit for 
those who are involuntarily bumped is seriously inadequate. It 
has not been changed in over 20 years. We found that passengers 
who volunteer to be bumped in fact stand a very good chance of 
receiving greater compensation than passengers who are 
involuntarily bumped.
    Second, the commitment to provide prompt ticket refunds 
refers to Federal regulations that have been in place for over 
17 years. So, we thought we would find high levels of 
compliance there. For five airlines, our tests showed excellent 
performance. However, four airlines and two non- ATA airlines 
were clearly deficient in this area. Enforcement action will be 
needed if this does not change and change quickly.
    We found the customer service areas most in need of 
improvement are for the three commitment provisions that 
trigger when there are flight delays or cancellations. One such 
commitment concerns keeping passengers informed about delays. 
Another promises to meet ``essential'' needs during ``long 
onboard aircraft delays.'' Another commits to return mishandled 
or delayed luggage within 24 hours.
    The evidence does show significant investment and progress 
by the airlines in these areas, and improvement is evident, 
even since our interim report.
    But, Mr. Chairman, there are persistent problems here. This 
is what we found.
    Flight displays at airports accurately showed a flight 
delay or cancellation about 80 percent of the time. In other 
words, about 20 percent of the time the flight display showed 
the flight as on time when in fact that flight had been delayed 
or even canceled. Timely announcements about the status of the 
delay were made in the gate area 66 percent of the time. When 
announcements were made, the information provided was adequate 
about 60 percent of the time. Performance varied by airline, 
with hubs clearly performing better than non-hubs.
    Baggage that did not show up with the passenger was 
delivered within 24 hours between 58 and 91 percent of the 
time. Again, performance among the airlines varied.
    All airlines have taken steps to accommodate passengers' 
``essential'' needs during long, on-aircraft delays, which have 
increased by over 150 percent in the last 5 years. Forty-six 
thousand flights spent more than 1 hour on the runway last year 
just waiting to take off.
    The trigger threshold for what qualifies as a long on-
aircraft delay differs from airline to airline, ranging from 45 
minutes on one airline to 3 hours on another. We think it's 
unlikely that a passenger's definition of a long, on-aircraft 
delay is going to differ materially depending on what airline 
they are flying.
    Now, I would like to say a word about chronically delayed 
or canceled flights. I think this addresses a comment that all 
of you made in your opening remarks.
    Chronically delayed or canceled flights are those regularly 
scheduled flights that arrive late or are canceled routinely. 
The Bureau of Transportation Statistics collects this data. Our 
analysis of this data showed that regularly scheduled flights 
that were at least 15 minutes late and/or canceled 80 percent 
of the time for at least a single calendar month increased from 
over 8,000 in 1999 to nearly 41,000 in 2000. That is a very 
substantial increase.
    When we identified scheduled flights that were delayed 30 
minutes or more and/or canceled at least 40 percent of the time 
in a single month last year, we found over 240,000 of them 
representing over 10,300 individual flight numbers affecting 
nearly 25 million passengers. That represents about one- fifth 
of all scheduled flights. I think there are some things the 
airlines can do that are within their control about these 
flights. For instance, if a particular flight is chronically 
delayed or canceled, 40 percent or more of the time, it seems 
to me that the airlines should notify the passenger of this 
information without being asked and before the passenger books 
the flight.
    The airline's contract of carriage is an important area 
because the airline's commitment, while conveying promises of 
customer service, is not necessarily enforceable by consumers 
or binding unless it is also incorporated into the contract of 
carriage. In fact, one airline in its Customer Service Plan 
stated that the plan did not create any contractual or legal 
rights.
    To protect air travelers, our Interim Report suggested the 
airlines incorporate the commitments in their contracts of 
carriage. All of the airlines responded to that suggestion to 
some degree, and some still are responding, even since the 
close of our audit work in mid-January.
    Today, six airlines have included all of their customer 
service promises into the contracts of carriage. They are: 
American, United Airlines, Southwest, Alaska, Delta and 
Northwest. Three of those incorporated these provisions in just 
the last several weeks.
    But please be aware, Mr. Chairman, that there are 
differences among the airlines in exactly what they 
incorporated. There are a number of instances where the 
contract of carriage appears to be more restrictive than the 
customer service plan posted on airline web sites.
    An area of particular concern to us is when an airline 
would provide overnight accommodations that are occasioned by a 
delay or cancellation. Most of the airlines' plans generally 
State that overnight accommodations will be provided if the 
passenger is required to stay overnight due to a delay or 
cancellation caused by the airline as defined by the airline. 
That is what is in the customer service plan.
    However, the contract of carriage for a number of the 
airlines appeared to limit this to situations such as when a 
flight was diverted to some unscheduled place and it was the 
airline's fault that it was diverted, or when a flight delay 
exceeded 4 hours between the hours of 10 p.m. and 6 a.m. and it 
was the airline's fault.
    We believe the circumstances in which overnight 
accommodations will be provided need to be tightened up and 
clarified. It seems only reasonable that the passengers know 
what to expect when they get caught in one of these big delays.
    Finally, Mr. Chairman, a comment about the Department of 
Transportation's capacity to oversee and enforce consumer 
rights. The resources that are available to the DOT office 
responsible for enforcement of consumer protection and unfair 
competition--that is the General Counsel's Office--are woefully 
inadequate. So much so that the resources have declined sharply 
as consumer complaints have quadrupled and flight delays and 
cancellations, which are their No. 1 consumer complaint, are at 
record highs. That staff, which numbered 40 in 1985, is down to 
17 now. Congress just authorized five more, but they have not 
been brought onboard yet. Until that situation is changed, Mr. 
Chairman, the responsible DOT office will not be able to 
satisfactorily discharge its responsibilities to the traveling 
public, including its responsibilities for handling complaints 
by persons with disabilities. Thank you. That concludes my 
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 are pleased to be to here today to discuss airline customer 
service, which is of enormous importance to the Congress, the 
Department of Transportation (DOT), Federal Aviation Administration 
(FAA), and, most importantly the traveling public. Today, I will 
discuss the results of our work and recommendations for improvement.
    As this Committee is well aware, Airline customer service took 
center stage in January 1999, when hundreds of passengers were stuck in 
planes on snowbound Detroit runways for up to 8\1/2\ hours. Following 
that incident, both the House and Senate conducted hearings and 
considered whether to enact a ``passenger bill of rights.'' Since the 
January 1999 incident, the state of aviation as measured by delays and 
cancellations has worsened. For example, the 10 major air carriers 
reported an increase of nearly 19 percent in departure and arrival 
delays and over 21 percent in cancellations between 1999 and 2000. A 
portion of this increase can be attributed to labor problems 
experienced by at least two air carriers, which disrupted flight 
schedules.
    Following hearings after the January 1999 incident, Congress, DOT, 
and the Air Transport Association (ATA)\1\ agreed that the air carriers 
should have an opportunity to improve their customer service without 
legislation. To demonstrate the Airlines' ongoing dedication to 
improving air travel, ATA and its member Airlines\2\ executed the 
Airline Customer Service Commitment (the Commitment),\3\ on June 17, 
1999. Each Airline agreed to prepare a Customer Service Plan (Plan) 
implementing the 12 provisions of the Commitment.
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    \1\ The Air Transport Association is the trade association for 
America's leading air carriers. Its members transport over 95 percent 
of all the passenger and cargo traffic in the United States.
    \2\ For the purposes of this statement, Airline or Airlines refers 
to the ATA member Airlines; air carrier refers to airlines in general.
    \3\ ATA signed the Commitment on behalf of 14 ATA member Airlines 
(Alaska Airlines, Aloha Airlines, American Airlines, American Trans 
Air, America West Airlines, Continental Airlines, Delta Air Lines, 
Hawaiian Airlines, Midwest Express Airlines, Northwest Airlines, 
Southwest Airlines, Trans World Airlines, United Airlines, and US 
Airways).
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    The Airlines Commit to: Offer the lowest fare available, Notify 
customers of known delays, cancellations, and diversions, On-time 
baggage delivery, Support an increase in the baggage liability limit, 
Allow reservations to be held or canceled, Provide prompt ticket 
refunds, Properly accommodate disabled and special needs passengers, 
Meet customers' essential needs during long on-aircraft delays, Handle 
``bumped'' passengers with fairness and consistency, Disclose travel 
itinerary, cancellation policies, frequent flyer rules, and aircraft 
configuration, Ensure good customer service from code-share partners, 
Be more responsive to customer complaints.
    A review of vital statistics places the environment in which we 
performed our review in context and shows how serious delays and 
cancellations have become.
     In 2000, over 1 in 4 flights (27.5 percent) were delayed, 
canceled or diverted, affecting approximately 163 million passengers.
     Not only are there more delays, but those occurring are 
longer. Of those flights arriving late, the average delay exceeded 52 
minutes in 2000.
     Flights experiencing taxi-out times of 1 hour or more 
increased nearly 13 percent (from 40,789 to 45,993) between 1999 and 
2000. Of those flights with taxi-out times of 2, 3, 4, and 5 hours or 
greater, the largest percentage increase occurred in the 5+ hour 
category, which more than doubled (from 30 to 79).
    Against this backdrop of increasing delays and cancellations, 
consumer complaints are also rising. The 2000 DOT Air Travel Consumer 
Report disclosed that complaints for 2000 increased 14 percent (20,438 
to 23,381) over complaints in 1999.
    DOT ranks flight problems (i.e., delays, cancellations and missed 
connections) as the number 1 air traveler complaint, with customer care 
\4\ and baggage complaints ranked as either number 2 or number 3. As 
depicted by the chart, 2000 data show that these three types of 
complaints account for 74 percent of all complaints.
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    \4\ Complaints such as poor employee attitude, refusal to provide 
assistance, unsatisfactory seating, and unsatisfactory food service are 
categorized as customer care complaints.

[GRAPHIC] [TIFF OMITTED] T7257.001

    Last June, we issued an Interim Report\5\ on the 6-month progress 
of the Airlines in implementing their Plans. The Airlines are just now 
past the 1-year point in implementing their Plans. We reported our 
final results in our Final Report on Airline Customer Service 
Commitment,\6\ on the effectiveness of the Commitment and the 
individual Airline Plans to carry it out. As directed by the  Wendell 
H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-
21), our final report includes results for each Airline and 
recommendations for improving accountability, enforcement, and consumer 
protections afforded to commercial air passengers.
---------------------------------------------------------------------------
    \5\ Report Number AV-2000-102.
    \6\ Report Number AV-2001-020
---------------------------------------------------------------------------
    Our review was conducted between November 1, 1999 and January 17, 
2001. During that time we visited and tested implementation of the 
Commitment provisions at the corporate offices, reservations centers, 
and the various airport facilities of all 14 ATA Airlines and 3 non-ATA 
airlines.\7\ We developed protocols for testing each of the 12 
Commitment provisions. We observed air carrier operations and tested 
Commitment provisions at 39 airports. This included observing 
approximately 550 delayed and 160 canceled flights, reviewing 4,100 
claims for mishandled baggage, placing nearly 2,000 telephone calls to 
reservations centers, reviewing the compensation provided to about 820 
passengers who were either voluntarily or involuntarily denied 
boarding, and observing the treatment of about 380 disabled or special 
needs passengers.
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    \7\ AIR-21 requested that our review include non-ATA member 
airlines. AirTran Airways, Frontier Airlines and National Airlines were 
selected as the three non-ATA airlines for our review.
---------------------------------------------------------------------------
    A number of Airline consolidations are in process. United Airlines 
has proposed the purchase of U.S. Airways, and American Airlines has 
proposed the purchase of Trans World Airlines and a portion of U.S. 
Airways. As a separate review, at the request of the Senate Committee 
on Commerce, Science and Transportation, we will be looking at the air 
carrier merger review process with particular focus on how transitional 
service disruptions and competitive aspects of customer service are 
considered. Transitional service disruptions, such as computer system 
integration, crew scheduling, and information flows within companies 
and with their customers, can have a great impact on customer service.
    We are pleased to report that ATA, the Airlines and non-ATA 
airlines cooperated fully with us during this review. Also, ATA has 
indicated that the Airlines are open to continued outside assessments 
about how they are progressing in their implementation of the 
Commitment, and that the Airlines will support any such effort through 
the establishment of the necessary internal Airline quality assurance 
programs.

                                RESULTS

    Overall, we found the Airlines were making progress toward meeting 
their Customer Service Commitment and that the Commitment has been a 
plus for air travelers on a number of important fronts. The voluntary 
Commitment to customer service and the circumstances under which it was 
entered into are noteworthy because, based on our observations, it 
prompted the Airlines to take the matter of improving customer service 
more seriously.
    Also, the Airlines generally were responsive to suggestions made in 
our Interim Report. But, the Airlines, airports, the FAA and, most 
important, the traveling public know the aviation system is not working 
well--the road ahead is long, and aggressive progress will be required 
by the Airlines, airports, and FAA if consumer confidence is to be 
restored.
    Notwithstanding Airline progress Airlines toward meeting their 
Customer Service Commitment, we continue to find significant shortfalls 
in reliable and timely communication with passengers by the Airlines 
about flight delays and cancellations. Further we find the Airlines' 
Commitment does not directly address the most deep-seated, underlying 
cause of customer dissatisfaction--flight delays and cancellations, and 
what the Airlines plan to do about them in the areas under their 
control in the immediate term.
    Action by the Airlines to reduce flight delays and cancellations in 
the immediate term is critical because major improvements in providing 
capacity to meet demand, such as new runways and the fielding of new 
air traffic control capacity enhancing technology, are not going to be 
in place for at least the next several years. Spring/summer 2001, when 
the next major crunch in air travel is likely to occur, is just around 
the corner.
    I would like to provide a more detailed summary of our work with 
respect to the various Commitment provisions, the Airlines' contracts 
of carriage, and DOT's ability to oversee and enforce consumer rights.
    Provisions for quoting lowest fare, holding nonrefundable 
reservations, timely responses to complaints, and higher pay-outs for 
lost baggage. In general, we found the areas where the provisions of 
the Commitment were working well and where the greatest progress was 
being made were not directly or necessarily associated with whether a 
flight is delayed or canceled:
     Quoting the lowest fare, compliance was between 88 and 100 
percent of the time for a fixed itinerary.
     Holding nonrefundable reservations without penalty, 
compliance was between 88 and 100 percent.
     Timely responses to complaints, compliance was between 61 
to 100 percent with 13 Airlines between 93 and 100 percent compliant.
     The Airlines supported an increase in the baggage 
liability limit from $1,250 to $2,500 resulting in larger pay-outs for 
lost luggage.
    Over the past year, we also have seen air carriers competing on the 
basis of customer service through such steps as more legroom between 
seats, size of overhead baggage compartments, and deployment of 
portable passenger check-in stations to reduce long lines--measures 
that go beyond actions required by the Commitment.
    Provision regarding properly accommodate disabled and special needs 
passengers. The Airlines committed to disclose their policies and 
procedures for assisting special needs passengers and for accommodating 
the disabled in an appropriate manner. Of the 12 Commitment provisions, 
we found the Airlines disclosed more detailed information to passengers 
on this provision than on any other.
    Although the Commitment provision addressed disclosing an Airline's 
policies and procedures, we took steps to also determine if the 
Airlines and non-ATA airlines were properly assisting disabled and 
special needs passengers. In over 380 observations, we found that the 
Airlines and non-ATA airlines were properly assisting disabled and 
special needs passengers during their time spent at the airport from 
checking in to boarding the plane. However, it is apparent from the 
comments we received from an on-line survey as well as the complaints 
received by DOT, that the Airlines cannot apply enough emphasis to this 
area, especially by ensuring that employees that assist disabled and 
special needs passengers are properly trained.
    One Airline has attempted to better address the needs of disabled 
and special needs passengers by establishing an advisory council, which 
includes disabled individuals. One of our recommendations is that other 
air carriers consider similar programs.
    Provisions regarding fairness and consistency in ``bumping'' 
practices and prompt refunds for tickets. Regarding the provision for 
fairness and consistency in bumping practices on flights that are 
oversold, we found a need for improvement. Among other things, the 
rules about who gets bumped first varied among the Airlines, and the 
compensation limit for those who are involuntarily bumped is inadequate 
and has not been changed since 1978. In fact, we found that passengers 
who volunteer to be bumped stand a good chance of receiving greater 
compensation than passengers who are involuntarily bumped.
    As for the provision in the Commitment to provide prompt ticket 
refunds, which refers to Federal regulations in place for over 17 
years, our tests at five Airlines showed excellent performance. 
However, four Airlines and two non-ATA airlines were clearly deficient 
in this area and need to improve their processing of ticket refunds.
    Provisions that trigger when there is a flight delay or 
cancellation. We found the customer service areas most in need of 
improvement are for those provisions that trigger when there are delays 
and cancellations. One such provision is to keep customers informed of 
delays and cancellations, another promises to meet customers' 
``essential'' needs during ``extended'' on-aircraft delays, and another 
commits to making reasonable efforts to return delayed or mishandled 
checked baggage within 24 hours.
    The evidence shows significant investment and progress by the 
Airlines toward meeting these Commitment provisions, and improvement is 
evident since our Interim Report. Still, there are persistent problems. 
We frequently found, among other matters, untimely, incomplete, or 
unreliable reports to passengers about flight status, delays and 
cancellations as follows:
     Notify Customers of Known Delays, Cancellations, and 
Diversions. In 21 percent of our observations of nearly 550 flight 
delays nationwide, the flight information display system showed the 
flight as on time when, in fact, the flight had been delayed for more 
than 20 minutes; timely announcements about the status of the delay 
were made in the gate areas 66 percent of the time; and when status 
announcements were made, the information provided about the delay or 
cancellation was adequate about 57 percent of the time. Performance 
varied by Airline and non-ATA airline, with Hubs generally performing 
better than non-Hub airports.
     Meet Customers' Essential Needs During Long On-Aircraft 
Delays. All Airlines have taken steps to accommodate passengers' 
``essential'' needs during ``extended'' on-aircraft delays. While there 
are instances of long on-aircraft delays, we have not seen instances 
quite as severe as the 1999 Detroit incident. However, we found that 
the Airlines differ in what qualifies as an ``extended'' delay. The 
trigger thresholds for this provision vary from 45 minutes to 3 hours. 
We think it is unlikely that a passenger's definition of an 
``extended'' on-aircraft delay will vary depending upon which air 
carrier they are flying. Therefore, Airlines should clarify what 
passengers can expect during an extended on-aircraft delay.
     On-Time Baggage Delivery. Although the majority of bags do 
show up with the passenger, it is the bags that do not arrive that 
customers are most concerned about. The Airlines did not commit to a 
reduction in the number of checked bags not arriving with the 
passenger. Instead the Airlines committed to make every reasonable 
effort to return mishandled checked bags within 24 hours. During our 
testing, baggage that did not show up with the passenger was delivered 
within 24 hours 58 to 91 percent of the time. Again, performance among 
the Airlines and non-ATA airlines varied.
    In addition, DOT's method for reporting mishandled bags in the Air 
Travel Consumer Report should be revised to more accurately reflect the 
number of bags that do not arrive with passengers. Currently DOT 
reports the number of baggage claim reports per 1,000 passengers on 
domestic flights. This includes passengers who did not check bags, 
which on some flights may be more than half the passengers. Also, a 
baggage claim report can cover more than one mishandled bag. A more 
accurate method for calculating mishandled baggage would be the number 
of mishandled bags per 1,000 bags checked by passengers.
    Since air travelers in 2000 stood a greater than 1 in 4 chance of 
their flight being delayed, canceled, or diverted, we believe the 
Airlines should go further and address steps they are taking on matters 
within their control to reduce over-scheduling, the number of 
chronically delayed and/or canceled flights, and the amount of checked 
baggage that does not show up with the passenger upon arrival.
    According to Bureau of Transportation Statistics (BTS), chronically 
delayed and/or canceled flights are those regularly scheduled 
flights\8\ that arrived at least 15 minutes later than scheduled and/or 
were canceled at least 80 percent of the time during a single calendar 
month. For example, according to BTS data, in December 2000, one flight 
was either delayed or canceled 27 of the 31 days it was scheduled to 
operate. In this case, the flight was delayed or canceled 87 percent of 
the time.
---------------------------------------------------------------------------
    \8\ A regularly scheduled flight is a flight segment representing a 
city-pair (e.g., Chicago to Miami).
---------------------------------------------------------------------------
    Our analysis of BTS data found regularly scheduled flights that 
were at least 15 minutes late and/or canceled 80 percent of the time 
increased from 8,348 to 40,868 (390 percent) between 1999 and 2000.\9\
---------------------------------------------------------------------------
    \9\ Our intent is not to attribute the cause of the delays or 
cancellations associated with these flights to the Airlines, but to 
highlight the extent to which such flights are occurring.
---------------------------------------------------------------------------
    Using BTS data, we increased the amount of arrival delay to 30 
minutes or more and identified all scheduled flights that, when grouped 
by individual flight number, were delayed and/or canceled at least 40 
percent of the time during a single calendar month. Overall, for 
calendar year 2000, we identified over 240,000 regularly scheduled 
flights that met our criteria (representing over 10,300 individual 
flight numbers affecting approximately 25 million passengers).
    Currently, the Airlines are required to disclose on-time 
performance only upon request from the customer. Passengers should not 
have to ask when making a reservation if the flight is chronically 
delayed or canceled 40 percent of the time or more; the Airlines should 
notify the passenger of this information without being asked.
    Airline mitigation measures in the above areas will not solve the 
delay and cancellation problem since it is caused by multiple factors, 
some outside the Airlines' control. Nevertheless, the Airlines should 
be doing their part.
    For both the short and long term, the Airlines' Commitment to 
customer service must be combined with comprehensive action to increase 
system capacity to meet demand. FAA's efforts to modernize air traffic 
control through new technology, satellite navigation at airports, 
airspace redesign and, importantly, new runways will be central 
elements in any successful effort to add capacity and avoid gridlock.
    Contract of Carriage. In our Interim Report, we noted that the 
Airlines' Commitment, while conveying promises of customer service, was 
not necessarily legally enforceable by consumers unless these 
protections were also incorporated into an Airline's contract of 
carriage, which is a binding and legally enforceable contract. In fact, 
one Airline explicitly said as much in its Customer Service Plan.
    In our Interim Report, we recommended that the Airlines ensure that 
their contracts of carriage are changed to fully reflect the benefits 
afforded by their Plans and the Airlines' Commitment to customer 
service. Our review of the 14 Airlines' contracts of carriage showed 
that as of January 17, 2001, all of the Airlines responded to this 
recommendation to some degree. For example:
     Three of the 14 Airlines incorporated the entire text of 
their Plans into their contracts of carriage.
     Eleven of the 14 Airlines incorporated the Commitment 
provision to inform the customer of delays, cancellations, and 
diversions into their contracts of carriage; 8 of the 14 Airlines 
incorporated the Commitment provision to meet customers' essential 
needs during extended on-aircraft delays.
     Eleven of the 14 Airlines incorporated the Commitment 
provision for quoting the lowest fare; 12 Airlines incorporated the 
provisions for holding a nonrefundable reservation for 24 hours and for 
returning misrouted or delayed baggage within 24 hours; and all 
Airlines incorporated the baggage liability limit increase, which is 
required by Federal regulation.
    Some Airlines have included additional Commitment provisions in 
their contract of carriage, since our audit was completed.
    There were differences among the Airlines in exactly what they 
decided to incorporate, and we found instances where the contract of 
carriage placed limits on what appeared to be a more expansive 
provision in the Plan. An area of particular concern is when an Airline 
will provide overnight accommodations occasioned by a delay or 
cancellation. Most of the Plans said generally that overnight 
accommodations would be provided if the passenger was required to stay 
overnight due to a delay or cancellation caused by the Airline's 
operations (as defined by the Airline). However, the contract of 
carriage for seven Airlines appeared to limit this to situations such 
as when a flight was diverted to an unscheduled destination or a flight 
delay exceeded 4 hours between the hours of 10:00 p.m.and 6:00 a.m. The 
circumstances in which overnight accommodations will be provided needs 
clarity so that passengers will know what to expect.
    Consumer Protection by the Department of Transportation. Oversight 
and enforcement of consumer protection and unfair competition laws and 
regulations are the responsibility of the DOT.
    We found the resources available to the Department to carry out 
these responsibilities to the traveling public are seriously 
inadequate--so much so that they had declined at the very time consumer 
complaints quadrupled and increased to record levels--from roughly 
6,000 in 1995 to over 23,000 in 2000. Nearly 20 staff are assigned 
these functions today, down from 40 in 1985. Until this situation is 
changed, the responsible DOT office will not be able to satisfactorily 
discharge its consumer protection responsibilities, including the 
duties assigned to it for investigating complaints involving disabled 
airline passengers.

  RECOMMMENDATIONS FOR IMPROVING ACCOUNTABILITY, ENFORCEMENT AND THE 
             PROTECTIONS AFFORDED COMMERCIAL AIR TRAVELERS

    Over the past year, the Office of Inspector General made three 
recommendations to the Secretary of Transportation and the Federal 
Aviation Administration that were directed at the capacity, delay, and 
cancellation problems, which are key drivers of customer 
dissatisfaction with Airlines. These recommendations are repeated 
below.
     Establish and implement a uniform system for tracking 
delays, cancellations, and their causes. In the final months of the 
prior Administration, a Task Force appointed by the former Secretary 
made recommendations to accomplish this. These recommendations still 
need to be implemented.
     Develop capacity benchmarks for the Nation's top 30 
airports. This will provide a common framework for understanding what 
maximum arrival and departure rate can physically be accommodated by 
airport, by time of day under optimum conditions. A set of capacity 
benchmarks is essential in understanding the impact of air carrier 
scheduling practices and what relief can realistically be provided by 
new technology, revised air traffic control procedures, new runways, 
and related airport infrastructure. FAA has committed to implementing 
this recommendation.
     Develop a strategic plan for addressing capacity 
shortfalls in the immediate, intermediate, and long term. These three 
points in time are important because the new runways or airports or air 
traffic control technology that may be in place 2, 5, or 10 years from 
now hold promise for the future, but offer limited or no bottom-line 
relief in the immediate term. Actions that are necessary in the short 
term may become unnecessary in the longer term with the addition of, 
for example, new runways. An immediate issue is scheduling, at peak 
travel times, flights beyond the established physical capacity of the 
airport and air traffic control system under optimum conditions. The 
dilemma an individual Airline faces is if it takes action and reduces 
flights, would competitors fill those slots, resulting in no change in 
the overall flight scheduling at the airport.

New Recommendations
    Our report includes recommendations where we found room for 
improvement or the need for corrective action, as follows.
    Department of Transportation Aviation Consumer Protection. We 
recommend a significant increase in the resources allocated to the 
Department of Transportation division responsible for consumer 
protection and a corresponding increase in the oversight and 
enforcement of laws and regulations that protect air travelers. 
Resources allocated for consumer protection have declined 
significantly--all at a time when consumer complaints and flight 
problems have reached record highs.
    Airline Customer Service Commitment. For the recommendations that 
follow, Congress in its consideration of Passenger Bill of Rights 
issues and how to effectuate change has the option of first giving the 
Airlines the opportunity to take action within a fixed time period to 
revise, modify, or add to the Customer Service Commitment voluntarily. 
We note that for significant regulatory proceedings in 1999, DOT took 
an average of 3.8 years to issue the final rule.\10\ The Department 
concurred that corrective action was needed to expedite the pace of its 
rulemaking and announced an action plan to do so. This action plan must 
still be implemented.
---------------------------------------------------------------------------
    \10\ Department of Transportation's Rulemaking Process, Report No. 
MH-2000-109, issued July 20, 2000
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    1. Adoption of Airline Customer Service Commitment by all U.S. air 
carriers.
    2. Make Airline Customer Service Commitment provisions enforceable 
under the contract of carriage or by regulation, including the 
provisions to offer the lowest fare for which the passenger is 
eligible; hold or cancel a reservation; accommodate passengers delayed 
overnight; and meet customers' essential needs during long on-aircraft 
delays.
    3. Add a commitment under which the Airlines must (A) establish a 
quality assurance and performance measurement system; and (B) conduct 
an internal audit to measure compliance with the Commitment and 
Customer Service Plan provisions. The quality assurance system as well 
as the results of the internal audit will itself be subject to audit by 
the Federal Government. Twelve Airlines have already established such a 
system that covers the Commitment in whole or in part.
    4. Commitment Provision--Offer the lowest available fare.
     Airlines that have not already done so, offer the lowest 
fare available for reservations made, not just through Airline 
telephone reservations systems, but for reservations made at the 
Airlines' city ticket offices and airport customer service counters.
     Our Interim Report suggested that Airlines notify 
customers that lower fares may be available through other distribution 
systems, such as the Airlines' Internet sites. On October 20, 2000, DOT 
issued an order requiring this to be done, and in general the Airlines 
are complying. Further recommendations on this point are not necessary.
    5. Commitment Provision--Notify customers of known delays, 
cancellations, and diversions.
     Airlines establish in the Commitment and their Customer 
Service Plans targets for reducing the number of chronically delayed 
(i.e., 30 minutes or greater) and/or canceled flights. This should be a 
short-term measure only to avoid a repeat of spring/summer 2000 and not 
a way of avoiding the larger issue of expanding capacity to meet demand 
such as through new runways and technology.
     Airlines should also provide, through existing Internet 
sites, the prior month's on-time performance rate for each scheduled 
flight.
     Disclose to customers, at the time of booking and without 
being asked, the prior month's on-time performance rate for those 
flights that have been consistently delayed (i.e., 30 minutes or 
greater) and/or canceled 40 percent or more of the time.
     The Office of Aviation Enforcement and Proceedings, in 
coordination with BTS, include a table in the Air Travel Consumer 
Report of those flights consistently delayed (i.e., 30 minutes or 
greater) and/or canceled 40 percent or more of the time for 3 
consecutive months.
     The Airlines that have not already done so should 
implement a system that contacts passengers prior to arriving at the 
airport when a known, lengthy flight delay exists or a flight has been 
canceled.
     Ensure delay information is updated in real-time on 
Airlines' monitors and on the airport master flight information display 
monitors; ensure that gate agents make timely announcements regarding 
the status of the delay; and ensure that the best known information 
about the delay, including the cause and estimated time of departure, 
is provided to the passengers being affected.
     Clarify the customers' rights when put in an overnight 
situation due to delays, cancellations, or diversions by making the 
contracts of carriage consistent with their Plans. In doing so, we urge 
the Airlines not to back off accommodations they made in their Plans. 
The reason we surfaced this issue was that at least one Airline, in its 
Plan, has stated that the Plan does not create contractual or legal 
rights.
    6. Commitment Provision--On-time baggage delivery (this provision 
actually commits the Airlines to make every reasonable effort to 
deliver checked baggage within 24 hours if it does not show up when the 
passenger arrives).
     Our Interim Report suggested that the Airlines clarify 
that the 24-hour clock begins upon receipt of the customer's claim, and 
all the Airlines have done so. Further recommendations on this point 
are not necessary.
     Strengthen the Commitment to require the Airlines to set 
performance goals for reducing the number of mishandled bags.
     Develop and implement systems to track the amount of time 
elapsed from the receipt of the customer's baggage claim to time of 
delivery of delayed or misrouted baggage to the passenger, including 
the time from courier to final delivery to the passenger.
     For the Airlines that have not already done so, provide a 
toll-free telephone number so passengers can check on the status of 
checked baggage that did not show up on the passenger's arrival.
     Petition the DOT to calculate the rate of mishandled 
baggage on the basis of actual checked baggage (not on the total number 
of passengers), and the actual number of mishandled bags (not the 
number of claim reports).
    7. Commitment Provision--Support an increase in the baggage 
liability limit.
     The Airlines agreed to increase the baggage liability 
limit (from $1,250 to $2,500 per passenger) and DOT made the increase a 
requirement of law. We are making no recommendations regarding this 
commitment.
    8. Commitment Provision--Allow reservations to be held or canceled.
     Our Interim Report suggested the Airlines disclose to the 
consumer that they have the option of canceling a nonrefundable 
reservation within the 24-hour window following booking. All Airlines 
revised their policies to require such disclosure. We are making no 
further recommendations regarding this commitment.
    9. Commitment Provision--Provide prompt ticket refunds.
     The rules governing prompt refunds have been in effect for 
over 17 years. We found no need to change the rules, but based on the 
levels of compliance identified in our review for some Airlines, we 
recommend that the Secretary of Transportation direct the Office of 
Aviation Enforcement and Proceedings to strengthen its oversight and 
take appropriate enforcement action in cases of noncompliance.
    10. Commitment Provision--Properly accommodate disabled and special 
needs passengers.
     We would encourage the Airlines to continuously improve 
the services provided air travelers with disabilities and special 
needs, especially for those services provided at the airport beginning 
with the check-in process, on to the passenger security screening 
process (especially for those air travelers in wheelchairs), and during 
the boarding process.
     Airlines should also consider establishing advisory 
councils, which include disabled individuals, to help better address 
the needs of disabled and special needs passengers.
    11. Commitment Provision--Meet customers' ``essential needs'' 
during ``long'' on-aircraft delays.
     The Airlines should clarify in their Plans what is meant 
by an extended period of time and emergency, so passengers will know 
what they can expect during extended on-board delays, and ensure that 
comprehensive customer service contingency plans specify the efforts 
that will be made to get passengers off the aircraft when delayed for 
extended periods, either before departure or after arrival.
    12. Commitment Provision--Handle ``bumped'' passengers with 
fairness and consistency.
     Petition DOT to amend its regulation to establish a 
uniform check-in deadline as to time and place, and require all air 
carriers to disclose in their contracts of carriage and ticket jackets 
their policies on how check-in deadlines apply to passengers making 
connections.
     Airlines who hold out that ``volunteers who give up their 
seats to other customers will be compensated equally on the same 
flight'' should ensure that all volunteers on the same flight are 
compensated equally.
     Petition DOT to increase the monetary compensation payable 
to involuntarily bumped passengers. The limit has not changed since 
1978.
     Disclose orally to passengers what the Airline is 
obligated to pay involuntarily bumped passengers in advance of making 
offers to passengers to voluntarily relinquish their seats.
     DOT clarify ``fairness and consistency'' by defining and 
providing examples of what it considers to be ``any undue or 
unreasonable preference or advantage'' and ``unjust or unreasonable 
prejudice or disadvantage'' in air carrier priority rules or criteria 
for involuntarily ``bumping'' passengers.
    13. Commitment Provision--Disclose travel itinerary, cancellation 
policies, frequent flyer rules, and aircraft configuration.
     Petition DOT to require that each Airline with a frequent 
flyer program make available to the public a more comprehensive 
reporting of frequent flyer redemption information in its frequent 
flyer literature and annual reports, such as the percentage of 
successful redemptions and frequent flyer seats made available in the 
Airline's top origin and destination markets. Current Airline 
information on frequent flyer mileage redemptions is not readily 
available and is very limited in the type and amount of information 
provided. It has limited value to the consumer for purposes of 
determining which frequent flyer mileage program to enroll in based on 
the percentage of successful redemptions and frequent flyer seats made 
available in the Airlines' top origin and destination markets.
    14. Commitment Provision--Ensure good customer service from code-
share partners.
     The Airlines that have not already done so should conduct 
annual internal audits of their code-share partners' compliance with 
the Commitment.
    15. Commitment Provision--Be more responsive to customer 
complaints.
     Overall, the Airlines are taking this commitment seriously 
and generally were responding substantively to complaints well within 
the required 60-day timeframe. We are making no recommendations 
regarding this commitment.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you or other members of the Committee might have.

                                 ______
                                 
           Airline Customer Service Commitment, June 17, 1999

    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 accomodate disabled and 
special needs passengers; (8) Meet customers' essentia; 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.

    The Chairman. Thank you very much, Mr. Mead.
    Ms. Hallett.

       STATEMENT OF CAROL B. HALLETT, PRESIDENT AND CEO, 
              AIR TRANSPORT ASSOCIATION OF AMERICA

    Ms. Hallett. Thank you, Mr. Chairman and Members. We 
particularly appreciate the opportunity to discuss the 
Inspector General's report on the airline voluntary customer 
service commitment this morning. I do request that my written 
statement be placed in the record, Mr. Chairman.
    The Chairman. Without objection.
    Ms. Hallett. First, I would like to acknowledge not only 
the fairness, but the objectivity that was presented in Mr. 
Mead's report and to recognize the enormous efforts of his 
office in preparing this document.
    It would, at the same time, be an oversight if I did not 
also recognize the tremendous efforts by each of our carriers 
and their employees.
    As Mr. Mead outlined, solid progress has been made since 
the interim report was released last June, but work remains to 
be done. We agree and we remain committed to improving upon our 
performance.
    Mr. Chairman, prior to your focus on today's subject, the 
airline industry was just not paying enough attention to 
customer service. We clearly were not focused on what the 
passenger wanted or deserved.
    In 1999, we heard your concerns and those of your 
colleagues and our customers. We are working very hard to meet 
customer demands. It is not easy pleasing over 665 million 
passengers each year, but we are trying.
    As I recall, Mr. Chairman, you have said in the past that 
it does not cost anything to tell the truth. We agree. Telling 
the truth will not increase the cost to our airlines. It is not 
that we have not been telling the truth. We just need to keep 
our customers better informed and we remain committed to this.
    I do not believe the answer is a one-size-fits-all 
approach. That is just bad for both customers and airlines. 
This is obviously a very complicated industry. It is important 
that we fix the issues that we can fix such as better 
communications about flight delays and other matters.
    Even with delay problems facing the industry, the 
constantly increasing number of passengers continues. It is 
becoming even more important for all of us in the industry to 
put in place the welcoming mechanisms for these people so that 
we can give them the service they want and deserve. It is the 
right thing to do.
    To improve customer service and restore customer 
confidence, carriers are more focused now than ever before. We 
must continue to assure our customers that we will do 
everything in our power to keep their interests as our No. 1 
priority along, of course, with safety.
    Since the inception of the program, our carriers have 
already spent over $3 billion to improve customer service, with 
several carriers already going above and beyond the 12 point 
commitment.
    Let me also echo again Mr. Mead's concerns regarding the 
root cause of customer frustration--flight delays and 
cancellations. As the report states, and I quote, ``The 
progress made this past year is often obscured when the 
traveling public experiences widespread delays and 
cancellations.''
    The voluntary commitment was intended to deal with how we 
as an industry react to this growing problem. However, when the 
25,000 daily departures are coupled with an increasing number 
of delays and cancellations, providing updated information to 
both customers and employees is extremely complex by any 
definition.
    A number of carriers are upgrading their communications 
systems. Others are making efforts to contact passengers of 
known delays and cancellations before they arrive at the 
airport. Several carriers have found ways or are testing 
systems to integrate their operations and reservation systems 
to provide more rapid, accurate and reliable information to 
passengers.
    Bottom line, we believe a dual approach is warranted to 
deal with passenger frustration associated with delays and 
cancellations. Our voluntary commitment to make every effort to 
address the resultant effects caused by delays and 
cancellations.
    At the same time, we stand ready to work with this 
Committee to deal with the root causes of these frustrations by 
expediting the modernization of our air traffic control system 
and to streamline the process for constructing new runways.
    I'm encouraged, Mr. Chairman, that you, Senator Stevens, 
Senator Brownback and others are looking into this particular 
issue.
    According to the FAA, the number of passengers traveling by 
airplane will increase by 42 percent in the next 7 years. We 
will need an additional 2,500 aircraft to transport these 
people. If we fail to accelerate the ATC modernization program 
or fail to build new runways, the increased traffic will result 
in a 250 percent increase in delays and obviously an increase 
in passenger frustrations as well.
    We fully recognize our responsibility to restore consumer 
confidence in our customer service. We believe that by working 
together, airlines, airports, the FAA, and Congress, we can 
modernize our air traffic control system and streamline the 
runway construction process to increase capacity.
    Mr. Chairman, the flexibility provided in a voluntary 
approach to improving customer service continues to be a 
catalyst that is encouraging the innovation and creativity 
among airlines. As each carrier monitors its own internal 
measurements for corrective action or recurrent training of 
employees, we will continue to see improvements in customer 
service and passenger satisfaction.
    In closing, let me make one final point. In the 1950's as 
cars replaced railroads as the mass transportation mode, we 
recognized that building an interstate highway system would 
require significant sacrifice and disruption to many. But we 
did it and the public has realized enormous benefits.
    Now, in the year 2001, the same commitment is required to 
create the infrastructure for the aviation system we need. If 
we are to keep the people and goods flowing across America and 
around the world.
    Thank you, Mr. Chairman, and I look forward to responding 
to your questions.
    [The prepared statement of Ms. Hallett follows:]

      Prepared Statement of Carol B. Hallett, President and CEO, 
                  Air Transport Association of America

    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to address the recently released Department of 
Transportation Inspector General's final report concerning the Air 
Transport Association's (ATA) member airlines ``Customers First'' 
program.
    The airline voluntary commitment was a direct result of this 
Committee's concerns about the level of customer service in the airline 
industry. We appreciate the fact that the Committee has given us an 
opportunity to address this issue without the intervention of federal 
rules and inflexible regulations. We also acknowledge the fairness and 
objectivity represented in Mr. Mead's report and we recognize the 
enormous efforts of his office in preparing this document.
    As announced in our voluntary agreement on June 17, 1999 and later 
included in P.L. 106-81, carriers were required to submit and implement 
their individual plans to the Committee and the Department of 
Transportation Inspector General by September 15, 1999 and December 15, 
1999 respectively. As you know, the fourteen signatories all provided 
and implemented their own plans in the required time frames.
    Carriers have their individual plans on each of their Internet web 
sites, at their ticket offices, and at airports, so that passengers can 
familiarize themselves with each carrier's customer service policies 
and procedures.
    In addition, earlier this year, the Air Transport Association 
launched a new Web site which also supplies downloadable files of each 
carrier's voluntary service plan, and gives examples of specific 
improvements since the programs were announced in 1999.
    As the Inspector General's final report points out, our carriers 
have made solid progress in several areas since the interim report was 
released in June of 2000. Our carriers have incorporated the 
recommendations included in the interim report and continue to adjust, 
develop, and make improvements to their plans.
    The fourteen ATA member carriers have made a recommitment to 
customer service and have employed these plans as a competitive tool, 
which is a positive development for the passenger. Carriers have gone 
above and beyond the commitment in several areas. For example, some 
carriers have removed seats from their planes to enhance legroom, 
enlarged overhead bins onboard aircraft, developed technological 
equipment to expedite the check-in process, employed equipment and 
personnel to reduce long lines at airport ticket counters during peak 
hours, and other significant positive steps.
    The Inspector General's final report suggests that progress has 
been made in the area of customer service and that more work needs to 
be done. We share this view and remain committed to improving upon our 
performance.
    In fact, since the inception of the voluntary program our carriers 
have spent over $3 billion to improve customer service.
    Moreover, the IG's report properly focuses attention on the root 
cause of customer frustration--flight delays and cancellations. As the 
report states, ``The progress made this past year is often obscured 
when the traveling public experiences widespread delays and 
cancellations.'' Although the airline voluntary commitment does not 
directly address these concerns, it does address how we react to this 
growing problem.
    With the enormous amount of daily operations coupled with an 
increasing number of delays and cancellations, providing updated 
information to both customers and employees is extremely complex by any 
definition. In order to help provide our customers with timely and 
accurate information of known delays and cancellations, a number of our 
carriers have begun to upgrade their communications systems. Others are 
making efforts to contact passengers of known delays and cancellations 
before they arrive at the airport. Several carriers have found ways or 
are currently testing systems that will integrate their operations and 
reservation systems in order to provide more rapid, accurate and 
reliable information to passengers.
    We believe a dual approach is warranted to address passenger 
frustrations associated with delays and cancellations. Our voluntary 
commitment makes every effort to address the resultant effects caused 
by delays and cancellations.
    The Air Transport Association and its member carriers stand ready 
to work with this Committee in order to address the root causes of 
these frustrations by expediting the modernization of our federal 
government's air traffic control system and to streamline the process 
for constructing new runways.
    Mr. Chairman, 665 million people took to the skies on U.S. airlines 
in 2000. We have twenty-five thousand flights depart every day in this 
Country. As you well know, the complexities involved in transporting 
millions of people in a safe and convenient way is an enormous 
challenge.
    According to the Federal Aviation Administration, the number of 
passengers traveling by airplane will rise by 42 percent in the next 
seven years. We will need an additional 2,500 aircraft to transport 
these people. If we do nothing, this increased traffic will result in a 
250 percent rise in delays and an increase in passenger frustrations as 
well.
    ATA's member carriers will continue to work to restore consumer 
confidence in the area of customer service. Together, airlines, 
airports, the Federal Aviation Administration, and Congress must 
continue to address the inadequacies associated with our air traffic 
control system and airport infrastructure.
    Mr. Chairman, the flexibility provided in a voluntary approach to 
improving customer service continues to be a catalyst that is 
encouraging innovation and creativity among the airlines. As each 
carrier monitors its own internal measurements over time, which will 
allow for corrective action or recurrent training of employees, we will 
continue to see improvements in customer service and passenger 
satisfaction.
    We appreciate the opportunity this Committee has provided the 
airline industry to refocus its efforts on providing quality customer 
service to all of our passengers. We certainly agree with the Committee 
that the free market system is the proper place to sufficiently address 
such issues.

    The Chairman. Thank you very much, Ms. Hallett. Mr. Mead, 
we have a big sign there that even I can read in front of the 
desk. So let us start out by giving them a grade. I believe 
this was generated by Ms. Hallett, was it not? Ms. Hallett, 
this board in front of the desk?
    Ms. Hallett. I am not familiar with it.
    The Chairman. OK. Let us start out by giving some grades, 
OK? No. 1, offer the lowest fair available. A, B, C, D, F.
    Mr. Mead. A on fixed itinerary. B on flexible itinerary.
    The Chairman. Notify customers of known delay, 
cancellations and diversions.
    Mr. Mead. I would have to say they get a C+, B for effort, 
D overall for performance. Not too many get above 60 or 70 
percent compliance.
    The Chairman. On time baggage delivery.
    Mr. Mead. B. Well, let me clarify there, sir. This 
commitment is probably misnamed. They should change that. It 
says on time baggage delivery. But the commitment really is for 
delivery of bags that did not show up with the passenger. On 
that, I would give them a B.
    The Chairman. Support an increase in the baggage liability 
limit.
    Mr. Mead. They get an A on that because that is now law, 
sir.
    The Chairman. Allow reservations to be held or canceled.
    Mr. Mead. A.
    The Chairman. Provide prompt ticket refunds.
    Mr. Mead. Half the airlines an A, two or three a B, a 
number of others I would say D or F.
    The Chairman. That reminds me of a point I think we may 
have to start identifying these airlines since we do identify 
airlines by other criteria and we may on these since clearly 
some of these results are somewhat mixed.
    Mr. Mead. Sir, may I say why I gave that low grade? Because 
when you look at the statistics, some airlines provided prompt 
refunds 60 or 70 percent of the time. But I think we need to 
keep in mind that $100 or $150 to a lot of people is a fair 
amount of money. When you do not take a flight, and it is a 
refundable fare, you want your money back. If the law says you 
should have a refund in 20 days and you do not get it for 30 or 
40 days, that can be a lot of money to some people. That's why 
we think since this law has been in effect for 17 years that we 
should expect a higher level of compliance.
    The Chairman. Properly accommodate disabled and special 
needs passengers.
    Mr. Mead. From what we saw, sir, I would say a B.
    The Chairman. Meet customers' essential needs during long, 
on-flight delays.
    Mr. Mead. C.
    The Chairman. Handle bumped passengers with fairness and 
consistency.
    Mr. Mead. Well, the airlines are all doing what the rules 
allow, but I think there is a problem with the rules here. 
There seems to me to be something wrong when the people that 
voluntarily get off the plane are consistently getting more 
money or compensation, which is allowed under the present law.
    Also, I think some clarity needs to be brought to the fact 
that some airlines say that the way you get bumped is whoever 
shows up last gets bumped involuntarily. Three airlines, say 
that, but if you are a first class passenger or a member of 
their frequent flyer program, you are going to get preferential 
treatment when it comes to who gets bumped first. I think it is 
a matter of judgment whether that is a reasonable distinction 
to make or not, sir.
    The Chairman. Disclose travel itinerary, cancellation 
policies, frequent flyer rules and aircraft configuration.
    Mr. Mead. I give them an A or a B on disclosing aircraft 
configuration, cancellation policies, and change of gauge 
flights, which occur when you travel under one flight number 
but you have to change planes. When it comes to frequent flyer 
reports, the rules are clear enough. They are all disclosed. 
But I think what that commitment had at its core was a desire 
to get information to consumers about which frequent flyer 
programs were better than others. I do not believe it has met 
that at all. It is very difficult to tell.
    For example, you cannot tell from looking at these reports 
how many frequent flyer miles are redeemed in the airline's own 
top origin or destination markets. If you do not have that 
information, it is very hard to do comparison shopping.
    The Chairman. Ensure good customer service from code-share 
partners.
    Mr. Mead. B or A.
    The Chairman. Be more responsive to customer complaints.
    Mr. Mead. A.
    The Chairman. Ms. Hallett, according to a new air hassle 
index by the AAA, despite a commitment by the airlines to 
improve customer service, most AAA air travelers say they have 
fallen short. In AAA's first air hassle index survey, 84 
percent of AAA members who travel by air in the last 6 months 
felt that customer service was worse or had not improved during 
that period. Does that not present you with a problem?
    Ms. Hallett. It does present me with a problem, Mr. 
Chairman. It is particularly disappointing in view of the 
comments made by the Inspector General that there has been--and 
I think I would say that this was an accurate assessment that 
we had improved. I look at this as a blueprint for our 
continued action. I believe that in any particular poll that 
comes out from any group, you obviously have to look at it and 
ask the questions as to how did they arrive at such a high 
rate? It concerns me. It is something that I do believe we have 
done a better job than we are given credit for in that 
particular poll. Do we have a way to go? Absolutely. But we are 
working very hard at it.
    The Chairman. Mr. Mead, Senator Wyden in his opening 
comments made reference to the fact that, as you well know, 
last year I and others had introduced legislation for an 
airlines passengers bill of rights. After a couple of false 
starts, the airlines made certain commitments. Most of them we 
just reviewed there.
    In return for those commitments, I--speaking only for 
myself--did not pursue legislation at that time because I 
thought it was fair to give the airlines an opportunity to 
voluntarily comply with what were basic fundamental passenger 
rights.
    Do you believe that after this review of yours and well 
over a year has passed, do you think that we need legislation? 
Or do you think that we ought to hold off for a period of time? 
Or do you think that they are making progress in the right 
direction at least as far as their area of responsibility is 
concerned?
    We repeat over and over again that lack of concrete, 
modernization of the air traffic control system, et cetera, are 
still major areas that we have to address that contribute 
substantially, enormously to the airline passenger complaints.
    Mr. Mead. I guess, sir, it is not responsive to your 
question to say that is a Congressional judgment. First, I 
think it is unfair to characterize what the airlines have done 
as no progress. That is clearly not what we found. There has 
been progress. The commitment got their attention. The 
circumstances under which it was entered into got their 
attention.
    I do think that it is important that the airlines be sent a 
message that this is an area of enormous importance to the 
Congress and there are some ground floor expectations that need 
to be met.
    I would counsel the Congress to avoid getting down in the 
weeds and trying to legislate good service. I think good 
service is a tough thing to legislate.
    At the same time, in our report we have a lot of 
recommendations. A number of those recommendations cannot be 
implemented except eventually through either law or regulation. 
For example, increasing compensation for bumped passengers, and 
disclosing to people at the time of booking and without being 
asked that flights are chronically delayed 40 percent of the 
time or more. These and a number of others will eventually have 
to be in regulations.
    I think the disclosure requirements are things that should 
be uniform. We should be consistent in what we are expecting of 
the airlines. That area probably does lend itself to 
legislation.
    Another area that you would want to leave to the airlines 
is, for example, if a flight is delayed on a runway at what 
point exactly should that flight be expected to return to the 
gate.
    In addition, we are recommending that all airlines 
establish quality assurance systems to monitor and audit their 
own compliance with their pledges. I think it is good for the 
airlines to know that Congress expects that to be done. But I 
would counsel the Congress to stay away from specifying the 
exact details of that. Is that helpful?
    The Chairman. It is very helpful. I also feel that it is 
important that if we move forward with legislation that we 
ought to be very careful how much authority we give to the 
Department of Transportation. Their record has not been 
exemplary, at least in my mind.
    Mr. Mead. No. In fact, we point out in our report that if 
you go the regulation route, the Department's track record is 
3.8 years to get a regulation through. I spoke to Secretary 
Mineta on this issue yesterday. Actually, he raised it at the 
senior staff meeting and said he wants that changed and changed 
quickly.
    At the same time, an issue that I have difficulty coming to 
grips with is in the commitments, the airlines have moved a lot 
of their customer service provisions into the contract of 
carriage. But when it comes, for example, to meeting essential 
needs during long delays, the airlines have incorporated 
provisions that say a long delay is 45 minutes in one airline, 
while another airline says, it is 3 hours. It seems that we 
have to have some minimum level of consistency and beyond that 
let the airlines compete.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I just want to 
follow up on your very good questions. On this point of sending 
a message, Mr. Mead, I think it is clear that the only way you 
are going to send a message now is through Congressional 
action. Because in effect you are off the beat. You do not have 
the resources in order to be able to do these reports every 
year or every 18 months. I think it is clear now if we are 
going to send a message, it has got to be through Congressional 
action.
    On this question of actually enforcing the rights of 
passengers, I would like your thoughts on whether it is better 
to go the Federal route or to go the State route. My colleagues 
have differences of opinion on it.
    In my legislation, I am inclined to make these violations, 
violations that we are going to spell out in the bill, an 
unfair, deceptive consumer practice. So that they could be 
enforced at the Federal level. You just told Chairman McCain 
that the Federal Government has not done a particularly good 
job at it. Which means--and some of my colleagues have 
suggested this--that these rights ought to be enforced at the 
State level. That we ought to create an opportunity for the 
consumers to be protected at the State level. How do you 
compare this question of enforcement, Federal versus state?
    Mr. Mead. First, I believe some of these issues are 
intensely Federal issues and it is a default of the Federal 
Government's responsibility not to have a reasonably robust 
staff that is going to enforce the laws. As our report points 
out, they do not have the adequate resources to meet that 
expectation by a long shot at the present time. I do not think 
the answer to that situation is to say, let the states handle 
this.
    At the same time, the contract of carriage is a contract 
between the airline and the passenger and is enforceable by the 
passenger, in State courts I believe, if they choose to go that 
route.
    Conversely, if an airline takes 30 extra days, in other 
words, you wait 50 days to get your refund and should have 
gotten it in 20, it is extremely unlikely that the passenger is 
going to file a lawsuit to get the refund. I mean, what are the 
damages? The damages are essentially an interest issue.
    In that case, I think you need a Federal agency that is 
going to examine the situation to see if the refund problem is 
systemic with that airline and to take a broad based 
enforcement action, which the consumer cannot do.
    Senator Wyden. Ms. Hallett, will you oppose what Mr. Mead 
said was required? He said that there will be instances where 
you need a Federal enforcement action. Will you oppose him on 
that if we put that in our bill?
    Ms. Hallett. Well, Senator, in actuality, in many of these 
cases, there already is a Federal law. A good example is in the 
scheduling and chronically delayed flights. We know that many 
thought that the DOT's on time reporting requirements that were 
implemented over a decade ago would actually resolve this 
problem. Obviously, that is not the case. I think it is fair to 
say that with the tough years that we have experienced over the 
past couple, 3 years, with labor problems, with severe weather, 
the IG's report clearly points out that these are areas that we 
need to do a better job in. We will explore them. I would not 
want to speak on behalf of all of the airlines until we 
actually discuss this with them. I would like to make a 
comment, however, as it relates to State legislation.
    If you were to take all 50 states and each State wrote laws 
differently, the impact on the airlines would be enormous. It 
would most certainly result in an increase in the cost of fares 
to the passengers because of the cost of dealing with so many 
different laws in each state. If there are going to be laws, it 
is far preferable that they be at the Federal level. While we 
do not believe that legislating is really going to bring about 
as much good change as a voluntary approach will provide. I 
believe this first year of a voluntary program has really 
demonstrated that.
    Again, I mentioned in my original comments, one size does 
not fit all. The creativity as well as the enormous amount of 
competitive effort that has gone into this program I believe is 
another reason why legislation is not desirable.
    Senator Wyden. Well, just pardon me if I am skeptical. We 
have gone for 18 months now. When we started this, you denied 
there was a problem. You said it was anecdotal. We showed that 
there was a problem. You said no legislation. Make it 
voluntary.
    When Mr. Mead came out with his first report, you said it 
was the FAA's fault. I guess I have heard this bottomless pit 
of excuses now for 18 months. It seems to me you said do not go 
the State route. Frankly, I am sympathetic to that argument as 
long as we have enforceable protections at the Federal level so 
that the Department of Transportation with an adequately 
staffed agency can bring enforcement actions. I heard you 
saying that you did not really want to give consumers those 
rights either.
    So we are going to continue, I gather, to have differences 
of opinion on it. But as Mr. Mead says at page five of his 
report, your voluntary program does not directly address the 
most deep seated causes of consumer frustration. I hope that at 
this time, despite the efforts that I know will be forthcoming 
from the industry, that we can give passengers a fair shake. 
Because the voluntary program is not going to make it.
    Mr. Chairman, I thought your questions were very 
constructive. I hope that we can get enforceable rights for 
passengers in the legislation this time. The key is going to be 
having enforceable protection so that at the end of the day 
consumers have meaningful redress rather than making them chase 
all over the countryside in small claims courts and legal 
mulberry bush. I look forward to working with you.
    The Chairman. Thank you very much, Senator Wyden.
    Senator Hutchison. I did the same thing that the Chairman 
did with regard to supporting the voluntary commitment before 
there would be legislation. I am going to work with the 
Chairman on the bill to determine what should be codified in 
the area of customer service. I certainly want to hear from 
everyone if the bill that we produce is onerous and more costly 
than the benefit that it would give.
    But I do think that there is a good news/bad news situation 
here. Obviously, the airlines that made commitments by and 
large have kept the commitments and there is better customer 
service. I do want to ask you a couple of things about your 
report.
    You said in your testimony, Mr. Mead, that you did not 
think that the definitions of when an airline should offer 
overnight accommodations were very clear. I wanted to ask you 
if you have a suggestion on criteria for when an airline owes a 
passenger an overnight accommodation when it is the airline's 
fault or when it should be done whether or not it is the 
airline's fault.
    Mr. Mead. Let me address the last part of your question 
first. You asked whether or not it is the airline's fault. I 
think the airlines have a point when they say, well, you know, 
if it is bad weather or the ATC system basically shuts down in 
the whole region of the United States, why should we be held 
accountable for that? Why should we have to pay?
    You said in your opening remarks you thought there was an 
issue of tracking these delays and what causes them. You are 
110 percent correct on that. We do not have an adequate system 
now. We made that recommendation last summer. In the closing 
months of the administration, they had a task force that made 
some recommendations. Now those recommendations need to be 
implemented.
    So I conceded to the airlines that I do not think they 
should have to pick up the tab for overnight accommodations for 
exigencies that are not their responsibility.
    On the other hand, when it is a mixed responsibility, I 
think the situation changes somewhat. Particularly at 
connecting points, it seems to me that if you are on a flight 
that is scheduled to leave at 4 p.m. or 6 p.m. and the airline 
says the flight is canceled or it is delayed for 5 or 6 hours, 
that it is unreasonable to make people wait that long.
    Senator Hutchison. You think a connecting flight is 
different though from a destination flight.
    Mr. Mead. Absolutely.
    Senator Hutchison. Do you think the airports should step up 
to the plate as part of an overall service for connecting 
passengers who are stranded?
    Mr. Mead. Well, many of them have in the context of 
providing cots and things like that. I do not know if 
passengers consider that as overnight accommodations. But I 
guess in some definitions it is an overnight accommodation. I 
think it is important for an airport to provide services like 
that in cooperation with the airlines.
    It just seems to me it is a strange definition to say, 
well, the only time we will pay for overnight accommodations is 
if your flight is diverted to some unscheduled place. I do not 
know how often that happens. Or if it is delayed more than 4 
hours between 10 p.m. and 6 a.m. That is going to keep you up 
pretty late at night. Especially if you have your family.
    Senator Hutchison. It is a tough one. I just wanted to see 
what your observations might be. Second question, Mr. Meed. One 
of the concerns that you hear from traveling passengers is that 
there are flights that appear to be canceled for no reason 
other than the flight was not full and that there is a later 
flight within an hour and a half. Many times customers feel the 
sparsely populated flight gets canceled and they are put on a 
flight an hour and a half later. That is illegal, but 
nevertheless there is the perception that it still occurs. Did 
you encounter any incidents such as this in your research?
    Mr. Mead. Not that we can quantify in any meaningful way. 
That also goes back to your point about tracking the cause of 
cancellations and delays. We just do not have that information. 
We have seen instances where, for example, there is one plane 
available, but there are two flights scheduled. One flight has 
more passengers booked on it than the other one. So the airline 
will cancel the flight with fewer booked passengers and use the 
one available aircraft to take care of the other flight. I am 
not sure that is illegal.
    Senator Hutchison. No. Well, if it is at the same time, it 
is not. But it is against the law to cancel a flight that is 
not at the same time and make passengers wait to put them all 
on one flight 2 hours later.
    Third question. You said it would be hard to determine when 
a flight that is sitting on the runway should have to go back 
to the gate and let people off. That does not seem that hard to 
me. There is a point at which people know they are not going to 
make a meeting. They would prefer just to get off and not take 
a flight than to be stranded on the runway. I do not understand 
exactly why you think it would be too hard to make a cutoff 
point. Could you expand on that?
    Mr. Mead. The comment was directed to time on the runway, 
not at the gate. I would agree at the gate you could let 
passengers off at a cutoff point. It is different when you get 
out on the runway and you have been sitting there for 2 hours 
and it looks like another half hour. The flight crew is pretty 
sure they are going to take off in a half hour. In the 
meantime, there are two or three passengers that say they want 
off, while the rest of them say, ``Gee, I have waited this 
long. I just want to get underway. I am willing to wait a half 
hour.''
    How would you decide the relative rights of those 
passengers? Would you take a vote? I understand there is one 
incident where that was actually done, they voted to stay.
    Senator Hutchison. Let me ask Ms. Hallett. Would it be an 
unreasonable requirement to have a vehicle go out to the place 
that the airplane is in line and allow passengers who would 
like to leave, get off and leave the rest of the people on the 
plane in line and not lose their ability to stay on and take 
off?
    Ms. Hallett. Senator, that is certainly something that 
could be looked at. But there are safety problems that I 
believe would be paramount in doing something like this. We 
always have safety over anything else.
    I might just add to follow up on the Inspector General's 
comments, when planes are in a line up, it is (a) difficult to 
come out of that line up, and (b) if you go back to the gate, 
then you may be adding another hour or two to the ultimate time 
at which you will be able to depart.
    It is having been on a flight myself when I missed a 
meeting, but went to the destination anyway, as I understand 
it, there were probably only one or two other people who had 
missed their meetings. Yet, there were 100 plus who still were 
going to be able to make their meetings. I felt that----
    Senator Hutchison. That is why I asked would it be out of 
line to take a vehicle out there rather than lose your place in 
the line up.
    Ms. Hallett. I think that we have to look at the safety 
factor first. You have a variety of problems to deal with just 
from a safety standpoint before you even get to the next part 
and that is the convenience of the passengers. But it is 
something we will look at.
    Senator Hutchison. That is the point. My time is up. But I 
do think we should determine if it would be a safety factor, or 
if it would be something relatively easy that would help the 
passengers in both categories. Thank you, Mr. Chairman.
    Mr. Mead. Mr. Chairman, just to follow up on that point, I 
have often wondered why it is that if a plane does sit out 
there for 4 hours and a judgment is made to return because a 
substantial number of people want off, why that plane would 
necessarily have to start all over again, why we could not do 
something with the air traffic control procedure to say all 
right, you have already done 4 hours of time out here on the 
runway. For whatever reason, you had to go back to unload some 
passengers for good reason and now you are ready to go again. 
Why should you have to go through it all another 4 hours? It 
just does not seem right.
    The Chairman. When you have got planes lined up on the 
taxiway at Reagan, it is very hard to get planes around them. 
Although, perhaps you could do that. We are getting pretty down 
in the weeds here for a bunch of aviation experts.
    Senator Carnahan.

               STATEMENT OF HON. JEAN CARNAHAN, 
                   U.S. SENATOR FROM MISSOURI

    Senator Carnahan. Yes, I have a question I would like to 
ask of Ms. Hallett. One of the recommendations of the DOT 
report for airlines is for them to post on the web site the 
prior months on time performance rate for each scheduled 
flight. Though I have noticed that very few of them do. Would 
your representative airlines be willing to provide such 
information on their web sites?
    Ms. Hallett. More and more carriers are doing this, Senator 
and it is something that obviously our web sites are designed 
to provide information for the passengers. We will certainly 
look at that as well. I might point out that in addition to 
each carrier having a web site that lists their commitments and 
what they have done, the Air Transport Association has also 
opened a web site which is customers-first.org. On that web 
site, we provide access to each member's web site. So that the 
passenger can get as much information as possible. We will work 
with the airlines to see if that is not going to be more 
helpful. But many of them are already doing it.
    Senator Carnahan. The airline notifications of passengers 
before they arrive at the airport of known delays is a very 
useful service as well, especially for business travelers. 
According to this report, nine airlines currently offer 
wireless notification of flight delays. Do you know whether 
other airlines are moving to provide such services as well?
    Ms. Hallett. Well, they are all working on different 
techniques. Some of them provide a scripted message on your 
answering machine or on other devices. Others are actually now 
at the point where they are able to provide a voice message. 
But you must, in advance of course, give the location of where 
that message will be give. But this is very important to our 
members that we get this under control so that we will when we 
know in advance that a flight is going to be delayed or 
canceled that we will be able to notify the passengers. So, we 
are making progress. We have more room to be perfect in this 
area.
    Senator Carnahan. One other question. In your prepared 
testimony, you stated that the carriers that you represent 
spent over $3 billion to improve customer service. How much of 
that $3 billion can be directly attributed to voluntary rules 
adopted by the industry? Could you estimate the additional cost 
to the industry if the recommendations contained in the final 
report are carried out?
    Ms. Hallett. Well, a good example would be some of the 
carriers have removed seats to provide for more leg room. 
Others have started putting in larger overhead bins for 
luggage. Those are a couple of examples that had nothing to do 
with any regulation, that were costly. They are just a couple 
of the many that are actually under way.
    To give you an estimate as to what the cost would be from 
mandatory requirements, I cannot give you that. We will try to 
assess that and give that to you in writing.
    The Chairman. Senator Snowe.

              STATEMENT OF HON. OLYMPIA J. SNOWE, 
                    U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you, Mr. Chairman. I want to welcome 
our panel here today. In some ways, I am encouraged. In other 
ways, I am discouraged. Because I think it is still very 
apparent that the situation is only going to get worse. In 
fact, the Secretary of Transportation during his confirmation 
hearings indicated that we could expect it to get much worse.
    Ms. Hallett, you mentioned in your statement that the 
number of passengers traveling by airplane will rise 42 percent 
in the next 7 years. We will need an additional 2,500 aircraft 
to transport these people. If we do nothing, this increased 
traffic will result in a 250 percent rise in delays and an 
increase in passage of frustrations as well.
    We are at a point where we have an epidemic of consumer 
complaints. I mean, it is apparent all of us travel. We are in 
airports. We hear from our constituents. It is a question of 
responsibility and obligation. I know the airlines are trying 
in many respects.
    But we really do have a fundamental problem. The question 
is how best to address it. I do not think anybody wants to 
engage in a regulatory approach.
    But also, I think the reason for legislated activity in 
this area is because of the enormous frustration that has 
manifested itself as a result of the rise in consumer 
complaints which is certainly indicated by Mr. Mead's report 
and other reports that have been done.
    So we only see the situation getting worse. It is no longer 
just anecdotal. It is based on empirical data. It is also 
pervasive within the industry.
    So, we keep hearing that it is because we need more 
infrastructure. You were mentioning aircraft. We hear the fact 
that we do not have enough runways. The weather. We realize the 
airlines cannot control the weather. But it is beyond weather 
related problems in many instances.
    I noticed in the airline's commitment to do certain things, 
the worst grade is on the most significant and fundamental 
issue which is to notify customers of known delay, 
cancellations and diversions. I mean, that is a fundamental 
issue. It is whether or not you are going to get there. That is 
a real problem.
    I guess what I would like to hear today, Ms. Hallett, is if 
you can tell us what you think the airline industry can do 
within this next year to improve the performance that shows a 
direct improvement. I mean, just not minimal. I am not 
encouraged by the fact that only three of the 14 airlines have 
signed the contract of carriage commitments in--signed the 
plan, three out of the 14 airlines have included the plan for 
their commitments into their contracts for passengers. So that 
tells me that there is not an overwhelming commitment on the 
part of the airlines to include all of those issues concerning 
improving customer service in their own contract so that they 
guarantee and provide the assurance you're going to take care 
of the passengers once they make that commitment.
    Because it is not a cheap issue. You mentioned $150 
tickets. There are not many that I know of where I come from. 
In fact, somebody yesterday wanted to go from Washington to 
Portland, Maine, to New York, back to Washington. That would 
have been over $1,000.
    We do not have competition. I know a spokesman for the ATA 
said in January, well, we know that customers can go to other 
airlines. That is not true in Maine. We are very limited. So I 
think that is the reason why there is so much frustration in 
looking at legislative initiatives as a way to alleviating this 
problem.
    So can you tell us what will the airline industry be doing 
to turn this around? It is not enough to say we are going to 
have more people traveling than ever before. What it tells me 
is that we are going to have more problems.
    So this takes a major initiative. It should be no different 
from any consumer going to an appliance store and buying a 
refrigerator in hopes that it is going to work. I mean, they 
can return that product. We are in a situation where people are 
depending on the airlines to get them from here to there. It is 
looking like we cannot get there from here.
    So I would like to hear from you what you think the airline 
industry is going to do to change this around in a significant 
way.
    Ms. Hallett. Senator Snowe, I appreciate your comments. I 
would like to start out by just referencing a comment made by 
the Inspector General this morning. We now have six carriers 
that have their full plan in the contract of carriage. I know 
the others are looking at this. Believe me, we are dealing with 
a number of very vexing issues, and this is one of them.
    Let me start by pointing out that, as I said in my 
comments, we have 25,000 takeoffs a day. We are carrying 665 
million passengers this past year and more in this year, 2001.
    It is very difficult to have safety as our No. 1 
requirement, which it always will be, and to provide the very 
best possible passenger service when we have a number of 
problems that are out of our control and others that are under 
our control.
    Senator Snowe. Well, if you have figured out how many are 
within your control and how many are not? I mean, I think that 
would be important information for this Committee.
    Ms. Hallett. Yes, I think that is important.
    Senator Snowe. I would like to identify what is out of the 
control beyond weather or safety, mechanical problems.
    Ms. Hallett. Well, let me use FAA's figures. Because I 
think it helps to put it in perspective. The FAA tells us that 
70 percent of all of the delays and cancellations are 
attributable to weather. Eleven percent are attributable to 
volume. Now, we put over-scheduling into the volume area. So it 
could be as much as 11 percent could be over-scheduling.
    However, we believe because of the peaks and valleys that 
over-scheduling is not the problem that many believe it to be.
    Senator Snowe. But if you are in the valley, it is a 
problem. I mean, what I am saying is when you say it is 11 
percent over-scheduling, that can become a significant problem 
as I have seen first hand at the airports.
    Ms. Hallett. Yes.
    Senator Snowe. So that does create a lot of problems.
    Ms. Hallett. That is something that the airlines are 
looking at. Some of them are changing some of their schedules. 
This is an issue that we are very seriously reviewing, each one 
of our carriers. There has been a suggestion that particularly 
during bad weather, because that is when you have the greatest 
difficulty in dealing with those planes that are all scheduled 
for departures at the same time.
    There has been a suggestion that the issue of having either 
the Department of Justice or the Department of Transportation 
be able to take a look with the carriers at those particular 
schedules when you have a severe storm. So that the antitrust 
issue will not impact that particular decision.
    That is something that is in the discussion stage. I do not 
believe that has gone beyond that. But that will take obviously 
the government's commitment as well.
    Senator Snowe. When did over-scheduling start within the 
industry? I mean, when did that become a common practice?
    Ms. Hallett. Well, I do not believe that the airlines look 
at it as being a common practice of over-scheduling, but rather 
that the population has increased in terms of the number of 
passengers. There is demand to fly at particular times.
    If we tell a passenger on Airline A that they are going to 
have to take off at 9 o'clock rather than 8 o'clock, then if 
they want to fly at 8 o'clock, they are going to go to another 
airline. That is not something that we can discuss between 
airlines, but rather it is an issue of competition.
    So we do not schedule based on what we think people want. 
We schedule on what their demand is.
    Senator Snowe. Just--can you tell me how are we going to 
improve customer service with less competition, especially in 
light of these mergers? We certainly do not have much 
competition in Maine, in small rural states. So how are we 
going to improve that customer service? How can we expect it 
from the airline industry?
    Ms. Hallett. I believe that this morning is an example with 
what the Inspector General has shown us with a high number of 
As and Bs, a scattering of Cs and a very small number of Ds and 
an F that we have made enormous progress in 1 year. Do we need 
to do more? Absolutely. We are working very hard to do that and 
will continue to.
    Our association does not get into the merger issues. I 
cannot respond to that. But I can only make the commitment that 
we have shown clear evidence of working very hard and spending 
a significant amount of money that will not stop being spent, 
whether there is legislation or not. That is the commitment 
that we have not only to you, but to our customers. This has to 
get better. If it does not get better, then certainly we will 
have passengers who will stop flying.
    Senator Snowe. Thank you. Thank you, Mr. Chairman.
    The Chairman. Mr. Mead, you wanted to comment?
    Mr. Mead. Yes, just a quick comment. FAA owes the Congress 
and the aviation community their capacity benchmarks that were 
discussed in a September hearing before this committee. Second, 
one step the airlines could take that would help somewhat, 
especially with this coming summer, is when passengers call up 
to book a reservation, it seems not unreasonable to me for the 
airline reservation agent to say, ``Sir, the flight you are 
about to book is late over 50 percent of the time or canceled 
20 percent of the time.'' That passenger, if he has a time-
sensitive engagement, may think twice about booking on that 
flight. That seems like something very simple that could be 
implemented within the next couple of weeks.
    The Chairman. Senator Rockefeller.

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

    Senator Rockefeller. Can I enter my statement in the 
record?
    The Chairman. Without objection.
    [The prepared statement of Senator Rockefeller follows:]

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

    Mr. Chairman:
     We sat down and worked with the air carriers to come up 
with these Voluntary Service Commitments in the Spring of 1999. It took 
a lot of hard negotiating. It also took a commitment from the Committee 
to hold off on specific legislation. There were real benefits to this 
approach, as Mr. Mead highlights in his report.
     We got results more quickly than if we had pursued 
regulations.
    In many respects, as Mr. Mead will tell us, holding off on 
specific, prescriptive legislation, forced the carriers to focus more 
quickly on addressing consumer problems. If we had gone first to a 
legislative and regulatory solution, it might have taken up to 4 years 
for the Department of Transportation to complete a rulemaking.
     We were able to agree quickly on increases in fines on air 
carriers for consumer violations ($1100 to $2500), and increases in 
liability for lost bags ($1250 to $2500) that were included in AIR-21.
    In holding off specific legislation, we instead increased fines on 
the industry for consumer violations from $1100 to $2500 per violation. 
These fines can add up very quickly. One of the things Mr. Mead will 
recommend is that DOT take enforcement action against 6 carriers for 
failing to provide prompt refunds. There is no excuse for that. There 
may be other areas, like deceptive scheduling practices where 
enforcement action might be needed.
     The DOT IG investigation supported the need for DOT to 
have the resources to enforce the law, something this Committee 
recognized in AIR-21.
    Gutting the staff from 40 in 1985 to around 20 people today, makes 
no sense when we keep asking them to do more. We authorized more staff 
and more money in AIR-21, but it was never appropriated, despite a 
letter to the Senate Conferees last fall. Mr. Mead's finding will give 
us new ammunition to seek the money.
     DOT should establish an Aviation Enforcement Task Force, 
detailing staff and resources from throughout the Department to enforce 
its consumer regulations.
    I recognize that it will be difficult to fund the enforcement 
office, but more importantly, so do the carriers. We can not establish 
new rules and guidelines for carriers to follow, if there is no threat 
of enforcement. Oversight is critical to keeping the pressure on the 
carriers to continue to make improvements.
     There is more that must be done. Expanding capacity, 
overscheduling and seeking ways for carriers to reduce flights, when 
necessary, must be legislative priorities.
    We all know that we must expand the capacity of our aviation 
system, adding new runways where possible, and providing new tools to 
move aircraft more efficiently. This will take time and money. Carrier 
scheduling, something that Senator Hutchison has mentioned a number of 
times, is also an area that we must focus on. Over the next several 
months, we will be developing legislation to streamline the process to 
expand capacity, and take a hard look at antitrust immunity for the air 
carriers to cut flights, particularly during bad weather, to ease 
delays.
     With respect to the IG recommendations, I agree that 
people should know if their flights are chronically late or frequently 
canceled.
    DOT's consumer data lists chronically late and delayed flights. The 
air carrier's computer reservation systems require that the on-time 
performance of each flight be listed. Mr. Mead points out that there 
are many flights that are always late or canceled. People should be 
told this information at the time they book a reservation. In addition, 
the carriers should figure out a better way to handle scheduling. If 
enforcement action is needed, DOT should file a case immediately.
     Finally, I am not ready to cosponsor consumer legislation 
yet.
    I will carefully consider cosponsoring legislation being introduced 
today by Senators McCain and Hollings, and where appropriate work with 
them and Senator Hutchison on any changes.

    Senator Rockefeller. Thank you. That is an interesting 
idea, Mr. Mead. In other words, it is the concept of past 
performance without the direct and probably impossible or 
potentially impossible of being able to say this is the 
situation today, right? I mean, that is your thing. This has 
been the track record. Therefore, be aware of the track record 
although it might not apply to today. How would you react to 
that, Ms. Hallett?
    Ms. Hallett. Senator Rockefeller, I believe this is--as are 
all of these suggestions--issues that we must look at. We must 
try to figure out how we can best be able to inform our 
customers.
    As I mentioned to Senator Carnahan, more and more of our 
members are putting this information on their web page. I would 
like to commit that we will discuss it. It is something that is 
of concern to everyone.
    It is also an issue of what does this do in terms of the 
overall process and training and getting information out to the 
employees. We will just have to figure it out. But I make the 
commitment we will discuss it and see what we can do to meet 
the needs of not only the passengers, but your requests as 
well.
    Senator Rockefeller. The reason that it interests me is 
that because of this whole discussion which I have been 
involved in for some time, you would like to sort of get a 
control group that you can use as kind of a polling group. 
There are six of us in our family. So I use our family. They do 
not charge me anything.
    In fact, on longer flights in this country, eight out of my 
last nine experiences involved going past the Mississippi. 
These flights past the Mississippi, have involved delays and 
cancellations on two airlines.
    As you know, I'm somebody who does not--for ideological 
reasons, but for the purpose of efficacy and making it work, 
who want to see legislation that mandates, as we said in the 
last series of hearings, that Congress says how wide a seat 
should be. Or Congress says whatever. Because I do not think we 
are good at that. I think our job is to make sure that you are 
good at it. Always the bottom statement is that if you do not 
become good at it, then we have to do it. Probably badly, but 
do it nonetheless. Because the consumers are getting of that 
mind.
    There is another side to this and it may have been 
discussed before, and if so, please tell me. That is the whole 
discussion of controllers of the other aspects--not including 
weather which is obviously a factor--the other aspects of this 
which make planes late, the lack of runways, all of that.
    In AIR-21, we authorized about $2.5 million for DOT's 
enforcement office. There were a group of us that took that--
and Senator McCain was one of them, Senator Gorton and myself, 
Senator Hollings, Senator Shelby and Senator Lautenberg--for 
funding. We were turned down.
    Now, I can make a Federal case of that, Mr. Mead. Or I can 
just say, oh, well. That does not really make that much 
difference. It should be done anyway. How should I view that? 
In other words, the importance of that enforcement money which 
was not made available, is that--does that let the airlines off 
the hook so to speak? Does that mean that we have committed an 
error which makes it harder for them to comply? Or how do I 
approach that deficiency on our part.
    Mr. Mead. Congress in fact authorized--I think appropriated 
funds for----
    Senator Rockefeller. No, it didn't appropriate it.
    Mr. Mead. It did not?
    Senator Rockefeller. No.
    Mr. Mead. It did not go through. I think hearings like this 
draw attention to it. The sad fact is the Department of 
Transportation unit that is charged by law with the 
responsibility for consumer protection here does not have 
enough resources to adequately discharge its job. We pointed 
that out in our interim report. We are pointing it out again 
today. I personally will say the same thing tomorrow at the 
Senate Appropriations Committee hearing on it at the beginning 
of the appropriations cycle. Beyond that, sir, I am not sure I 
have the answer.
    Ms. Hallett. Senator, not only did we support that 
provision, but we even brought it up early on in the 
discussions. Because we felt that this was something that was 
desperately needed. We have had discussions with Mr. Mead over 
the last couple of months about the IG being in a position to 
do a review of our continuing progress. He pointed out that we 
simply have insufficient people to do that job.
    Senator Rockefeller. Ms. Hallett, let me just ask you again 
a philosophical question. Again, using my family as my unpaid 
control group. When any of us now go to either New York or 
Boston--or rather I should say when any of them go to New York 
or Boston--we routinely take the train. It has become the 
travel method of choice in my family. Because there are no 
inconsistencies that will meet us, provided we get our ticket 
and get to the station on time.
    You can look upon that two ways. You can look upon that as 
a negative comment on airlines. Or you can say there are too 
many people wanting to travel to too many places without enough 
runways, too many flights over-booking into crowded New York 
airports, et cetera.
    Therefore, my little control group decision is not really 
that statistically or substantively important. Or you could 
say, you know, that is not a very good sign for airlines. How 
do you interpret that?
    Ms. Hallett. Well, I can relate to what you are saying.
    I would point out that using Boston Logan as an example, it 
is estimated that if the new runway that actually has gone 
through all of the environmental ropes, it has had all of the 
necessary approvals from that standpoint. If that runway could 
be built, it would add 40 percent in capacity at Logan which 
would mean an enormous improvement in keeping flights on time.
    At LaGuardia, it is problematic. It is very difficult to 
find land, other than in the river, to build another runway. As 
you know, AIR-21, of course, added additional capability of 
carriers having more flights in there. That has now been 
changed.
    But I have to point out that in so many instances in 
addition to building more runways, a good example would be 
Chicago O'Hare. That is estimated to give a 40-50 percent 
increase in capacity. Then when you add to that, both in the 
Northeast as well as across the country, if we have satellite 
based navigation, GPS, some of the other tools also online, not 
all, but the vast majority of these problems are going to be 
eased dramatically. That is what we want.
    Senator Rockefeller. Mr. Chairman, can I just take a quick 
little shot at New York?
    The Chairman. Sure.
    Ms. Hallett. Not me, but New York, right?
    Senator Rockefeller. In talking with some of their folks, 
they say that is an outrageous thought. To which I respond, 
wait a second. Already one of your runways is already built on 
stilts out in the water. Your environmentalists are comparable 
to Arlington, Virginia's. I'm sorry, they are just going to 
have to give way to something called the public interest. 
Whereupon, the people of New York that I talk to get very, 
very, very mad and say that will never happen in New York.
    Essentially, what we are talking about here is that that 
kind of attitude, if we are going to do from a variety of ways 
to solve the problems on the chart in front of you is going to 
have to back off, is it not, just a bit? That kind of attitude. 
Not here. Not in my property. Not in my area.
    Ms. Hallett. It is a term that we hear often. It is called 
NIMBY, Not in My Back Yard. It is a very serious problem. It is 
one in which that particular obstacle will continue to create 
our biggest headaches as far as delays and cancellations are 
concerned.
    Senator Rockefeller. Not solving all the problems. Some 
will still remain with you, but it will solve some of them. Mr. 
Chairman, thank you for your indulgence.
    The Chairman. Thank you, Senator Rockefeller. I do not 
think we should ever forget as we discuss this issue that there 
has been very little concrete poured in the last 10, 15 years. 
It is not just New York. San Francisco very badly needs a new 
runway. Senator Fitzgerald and I have an ongoing dialog about 
the problems in Illinois, either Chicago, O'Hare or a new 
airport or some combination of both.
    So that is a very serious aspect of this problem. Even if 
we modernize the air traffic control system, even if we had the 
best passenger bill of rights, we have still got to have some 
place for them to land.
    So I think your point is well made and I do not mean to 
interrupt.
    Senator Burns.

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

    Senator Burns. Thank you, Mr. Chairman. Good morning. Let 
us see a show of hands. How many people in this room have 
worked the ticket counter?
    Mr. Mead. Worked on a ticket counter?
    Senator Burns. Yes.
    Mr. Mead. Worked them over?
    Senator Burns. Worked the ticket counter. Ever wrote a 
ticket. Ever write a ticket?
    Mr. Mead. No.
    Senator Burns. Well, you ought to go out there and work one 
one of these days and you will find out that some of the things 
that we are harping about here are not so bad. But, you know, 
there has to be some responsibility from the passenger. They 
have a little responsibility. But nonetheless, I started out 
working one. So I think I have got some suggestions on maybe 
this passenger service. That is what we are looking at. We are 
trying to deal with complaints from passengers.
    Now, I think most of it boils down to fares. We do not 
know. You can get on the airplane and there will be 67 
different fares. They might only have 50 seats. Nobody 
understands them. Why when they cancel they cannot get all 
their money back. What I think mostly is that we have very 
little offline traffic now. Most of it is interline traffic. 
Passengers think once they make a reservation, that fulfills 
their responsibility, or they cancel one.
    No matter what we do as law around here, if the guy that is 
handling the baggage on the tarmac does not want to do it, it 
is not going to happen. He don't care about your law, Mr. Wyden 
or Mr. Burns or Mr. Lott or Mr. McCain. They don't give a damn 
about that law. Because you cannot fire them.
    If a ticket agent--I suggested to a CEO of an airline, I 
said, why don't you take some of this money and put some of 
your people through charm school? It wouldn't hurt.
    But if they do not want to accommodate us at a ticket 
counter, they are not going to. That is where our problem is in 
some of this.
    We have got some pilot who says, well, I am not going to 
fly today. I am going to slow it up a little bit. I am just 
going to pull out here. I will just get ahold of the FAA and 
the controllers and I just want to sit here for 50 minutes. If 
they would report on time performance on arrival times rather 
than departure times, that would change an attitude.
    But I have just got to believe right now that frequent 
flyers, who pays for it? Somebody has got to pay for it. I 
think we all do.
    But I think whenever you take a look as far as reservations 
are concerned, we used to all make our own reservations. Then 
if you booked offline, then you went on and made the 
reservations. As soon as the flight canceled or was late, it 
was the responsibility of reservations to notify the passenger. 
They got all the information. You have got the information 
where the hotel they were in. We used to have to reconfirm. 
Remember that? When the reservation came down, it would say 
RECNO on it. Reconfirmation not necessary. All those things 
meant that the passenger had some responsibility in making this 
service better. I have just got to believe if reservations 
don't want to accommodate, they are not going to.
    As I was talking to the leader here, sometimes it has to 
start with the top and the kind of leadership they get from the 
executive branch on their attitude toward passengers and their 
attitude toward service.
    It would not hurt for the president of the company to go 
down on the ramp and work a couple of flights. They could put 
on some of them knee pads and crawl around in them airplanes 
and try to stow that luggage and try to get it to the bag claim 
without tearing it up.
    Because now there are some of those folks out there that 
can tear up shotputs. I realize that. They are just that kind 
of folks. But nonetheless, if we got it instilled somewhere in 
this airline industry a willingness to serve. How do you 
accommodate a passenger?
    I think in our case if I wanted--with the fares the way 
they are structured now between here and Chicago, I would be 
better off if I booked through Amsterdam. I can fly to 
Amsterdam to Chicago cheaper than I can fly Washington to 
Chicago. We do not understand that. The flying public does not 
understand that. Why can you fly from Dulles to LAX for $312 
round trip and it costs me $518 to get to Billings, Montana. I 
do not understand that. If I want to fly from Billings to 
Denver on a walk up, it costs me about 800 bucks.
    Now, I tell you what I am going to do. I am going to jump 
in my car and drive it. Because I can drive it in 8 hours. I 
will do it. Because I ain't got the $800. I am trying to get 
the $800.
    So I have just got to believe what we are talking about 
here--and we can talk about weather. We can talk FAA and delays 
and this type of thing. But if we would report--if you want an 
on time record, then report arrival times rather than departure 
times. Because right now they can push you away from the gate 
and you might sit out there for an hour. You are still on an on 
time departure. You report arrival times. If the FAA is at 
fault and some of these pilots, then write the FAA up. Write 
them up. Make a note. File the complaint.
    But we cannot instill customer service in people that do 
not want to give customer service. Let's face it. This is a 
hands on. The first people you run into now is the bag handler 
out front. It is a good thing you do. They are all happy. Boy, 
they are all happy. They are happy to see you. They are going 
to make sure your bags get on the airplane and all this thing.
    Then you go inside and you talk to one of them ticket 
agents and I tell you what, it ruins your whole day. You know, 
it is the people that--contact with people and how they handle 
people. That is where our biggest problem is.
    All of this is things that have happened to all of us. I 
mean, I could write a book on Minneapolis. I do not mean to get 
on Minneapolis and Minnesota. Although, they do vote funny up 
there. But I could write a book on MSP. You know, of all the 
bad things that has happened to us, it has happened there.
    But it boils down to people if they really want to serve.
    Now, Chicago wants to build another airport.
    The Chairman. Not necessarily.
    Senator Burns. But you have got too many of them little old 
green tree frogs, right? Can't do it. Some of the folks around 
here, they don't want you to mess with them little green tree 
frogs. So you can't build an airport.
    So it boils down to people.
    The Chairman. I think those tree frogs work in Springfield.
    Senator Burns. I know. They do. I ain't got none out there 
either. On my place anyway. But nonetheless, I do not know what 
kind of legislation will come. But I do not think we can 
legislate service to the public. The education it takes for 
people who work on ticket counters, handle bags or even fly 
them or in flight service. When I started off with Krazo 
Airlines--and that is Ozarks spelled backwards--a long time 
ago, and we sold air first and then your service second. We do 
not see that anymore either. But interline with the hub system 
has taken away a lot of those travelers. It's all online now. 
So your interline is very, very small.
    So I just think we are going to be talking about a lot of 
things today, but most of it is education and the will to do 
it. If the executive leadership of an airline does not show the 
will to do it, then the employees will not. Would you like to 
comment on that, Ms. Hallett? I've just kind of run on here. 
But I just don't know what the answer is. But I know one thing. 
Reservations. Some of these reservations people are terrible.
    Ms. Hallett. Well, Senator, I would like to first just 
point out that this overall issue of customer service is one 
where the CEO of every single one of our companies is involved. 
This has been a very top down effort. I believe that the 
Inspector General has seen that in his visits to the carriers 
as well.
    If there is a particular area where it is very difficult to 
make everything work, it is in the area of human factors. 
Training will never be complete. We must do more and more 
training. We have that as part of the job. The other part to 
really facilitate and bring about better customer service is 
going to come through technology. We've seen an enormous effort 
underway this past year by bringing the technology side not 
only up to speed but beyond where it should be.
    So this is going to be an ongoing effort, the training, the 
continuous interest and concern as well as responsibility 
starting with our CEO is there. They take this very seriously 
and will continue to.
    I just wanted to make that point. I appreciated the 
comments you have made. I think they are concerns that we hear 
repeatedly.
    Senator Burns. Well, I feel very strongly that if you have 
got people that contact the passenger that has hands on contact 
with the passenger, if they do not want to--if they have got no 
try in them, it is not going to happen. We cannot legislate it. 
Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Burns.
    Senator Edwards.

                STATEMENT OF HON. JOHN EDWARDS, 
                U.S. SENATOR FROM NORTH CAROLINA

    Senator Edwards. Thank you, Mr. Chairman. Mr. Chairman, I 
ask permission to put my statement in the record.
    The Chairman. Without objection.
    [The prepared statement of Senator Edwards follows:]

               Prepared Statement of Hon. John Edwards, 
                    U.S. Senator from North Carolina

    Thank you, Mr. Chairman. Good morning. I want to commend you for 
holding a hearing on this important matter. As a new member of the 
committee, I look forward particularly to helping you act as a watchdog 
for consumers in this country.
    Airline passengers deserve excellent customer service. I'm going to 
repeat that--Airline passengers deserve excellent customer service. 
Therefore, airlines must look at their policies and services from the 
customer's point of view. I know airlines will never be able to satisfy 
all customers all the time.
    But airlines must do better. They must do better by not leaving 
passengers stranded on the tarmac for hours when there's a delay, by 
not overscheduling flights and by not refusing to communicate delays to 
passengers when this information is known. These things are 
unacceptable, and must be corrected. These are basic standards of 
customer service. Customer service improvements are long overdue, Mr. 
Chairman.
    Now I know that airlines are trying to reduce delays and increase 
efficiency. I also know that no business likes government telling them 
what to do. But sometimes it's the most efficient way to illicit 
industry action.
    Thank you again, Mr. Chairman, for your leadership on this 
important issue.

    Senator Edwards. Also Senator Carnahan's statement. She had 
to leave.
    The Chairman. Without objection.
    [The prepared statement of Senator Carnahan follows:]
  Prepared Statement of Hon. Jean Carnahan, U.S. Senator from Missouri
    Mr. Chairman, thank you for convening today's hearing on this 
important subject.
    Given the nature of a Senator's schedule and the travel that it 
requires, all of us have become experts on the subject, whether we 
wanted to or not.
    I believe the issue of airline delays and passenger service is so 
impassioned because we live closely scheduled lives. We are trying to 
pack more into a day or week than would have been imaginable even ten 
years ago. Whether a person is heading for an important business 
meeting, or taking a late night flight to get home to his or her 
family--time is a precious commodity, and information is a precious 
resource.
    So when passengers are spending hours in the airport waiting for a 
delayed flight, or worse yet, the flight is cancelled without any 
notice, for no apparent reason, tempers run high. Frustrations mount.
    Of course, all problems surrounding air travel are not the fault of 
the airlines. Some delays and cancellations are outside of the 
airlines' control. However, timely and accurate information provided by 
the airlines can go a long way to soothe the frayed nerves of a weary 
traveler. It is always frustrating to have your plans disrupted--but it 
is even more stressful not to be informed of what has occurred and to 
be ill-advised of your options for remedying the situation.
    The Inspector General's report suggests that the airlines have made 
progress in a number of areas addressed by the voluntary rules outlined 
in the Airline Customer Service Commitment. However, much more has to 
be done to address air travelers' most significant complaints; chiefly 
those complaints concerning flight delays and delays where passengers 
are trapped on-board a grounded plane.
    Ideally, Congress should not have to intervene to make sure that an 
industry treats its customers well. But the airlines must know that if 
the situation does not improve quickly, eventually this Committee will 
have no choice but to take action. I am eager to hear the 
recommendations of the Department of Transportation Inspector General 
and learn how the airline industry intends to address the serious 
concerns raised in his report.

    Senator Edwards. Good morning, Ms. Hallett.
    Ms. Hallett. Good morning.
    Senator Edwards. I missed this part of your testimony, but 
actually it was Mr. Mead's testimony. But apparently, he gave 
you a grade of D on overall performance for delays, 
cancellations and diversions. Were you here when he said that?
    Ms. Hallett. Yes.
    Senator Edwards. You would agree, I assume, that that area 
is one of the most critical areas in terms of airline passenger 
satisfaction, would you not?
    Ms. Hallett. It is the reason for the majority of our 
complaints, delays and cancellations. The issue of delays, I am 
sorry to say will only get worse until we have more runways and 
until we have a better overall infrastructure, including the 
technology that the FAA is calling for. We are supporting the 
FAA on that particular technology. Fortunately, AIR-21 provides 
funding for that technology. So that it will go forward.
    We think that it should be done faster than has been called 
for. But that is an absolutely must if we are going to be able 
to meet the continuing demands of a growing number of 
passengers, 655 million passengers this last year. We expect 
that to be up around 690 million this year.
    Interestingly enough, 30 years ago at the FAA's forecasting 
conference, they forecast that this last year we would have 700 
million passengers. We bought the planes. We have the equipment 
to provide that service. The system still needs to be up to 
date.
    Senator Edwards. Obviously, there are other problems 
associated with causing these delays.
    Ms. Hallett. Absolutely.
    Senator Edwards. Everyone recognizes that. But talking 
specifically about the commitment and notifying customers of 
known delays, cancellations and diversions, that is what I 
understand Mr. Mead gave you a D on overall performance.
    Let me ask you this. Given that and that that is one of the 
most critical things that passengers are concerned about, what 
reason would we have to believe now that you have had a year to 
do something about this most critical component, what reason 
would we have to believe that this problem is going to be 
corrected voluntarily?
    Ms. Hallett. Well, in looking at my notes, the Inspector 
General pointed out that he would give us a B or a C for 
effort, but a D for performance. That is unacceptable. We do 
not want to be in that position, even 6 months from now, let 
alone a month from now.
    But this has come back to an ongoing effort that I 
mentioned, not only in terms of the technology that is going 
online to be able to advise passengers, not only when they are 
in the terminal--and that is going to take airports and 
airlines working together to have the information updated--but 
also in terms of advising passengers before they get to the 
airport if we know of a delay or a cancellation, having it on 
the web page. Also having calls that are placed or having the 
information sent to an office to advise the passenger of a 
plane that will be delayed. This is something that I believe it 
is fair to say we are making some real progress, but we have an 
enormous amount of work yet to do. We have made that 
commitment.
    Senator Edwards. We appreciate that commitment.
    Since you have made that commitment, would you have any 
objection to passengers having any enforceable right to enforce 
the commitment that you have made?
    Ms. Hallett. Well, we believe that over the past year, the 
voluntary commitment has caused the airlines to go far beyond--
many of them have gone far beyond the 12 point plan that was 
developed. In fact, this has made it a very competitive----
    Senator Edwards. Can I interrupt you? I am sorry, I do not 
mean to interrupt you. Is there a reason though--from your 
perspective--is there a reason for your passengers not to have 
an enforceable right to enforce the commitment that you 
yourself have made?
    Ms. Hallett. Well, I do not see the need for it to be 
enforceable by law if we are in fact already working to 
accomplish that goal for them and going far beyond.
    Senator Edwards. Well, what harm is caused by passengers 
having the right to enforce a commitment that you all have 
actually made?
    Ms. Hallett. Well, I think that it will be more than just 
one point in a piece of legislation that ultimately could be 
very expensive legislation and would not provide the voluntary 
commitment and particularly the incentive that people have when 
they are being competitive with another carrier.
    Senator Edwards. But would you not have an incentive to get 
better than a grade of D on this particular area?
    Ms. Hallett. We do. Believe me.
    Senator Edwards. But would you not also have that incentive 
if the passengers that you are carrying on your airlines in 
fact have an enforceable right? Would that not also create an 
incentive for you to do this?
    Ms. Hallett. We want them to not have to have an 
enforceable right. Because we will provide that service to 
them. That is our goal.
    Mr. Mead. In fact, Senator, I should point out that in our 
work, some of the airlines have taken that pledge and moved it 
into the contract of carriage--some, but not all. The contract 
of carriage is enforceable.
    I think the problem here is whether you want this level of 
inconsistency between the airlines on some basic issue like 
telling people about delays and cancellations?
    Senator Edwards. It seems to me passengers should have the 
same rights no matter which airline they are flying on. Does 
that make sense to you, Mr. Mead?
    Mr. Mead. Yes. Yes, it does. At the same time I think that 
we do not want to create a situation where it is the lowest 
common denominator, where the airlines will compete above and 
beyond that.
    Senator Edwards. Absolutely, I completely agree with that. 
Let me ask you, Mr. Mead, a question and then follow up to 
this. I apologize if someone else has asked this. But I am 
particularly concerned in North Carolina about the USAir/United 
merger. It is an issue that I have been working on for some 
time. Tell me what impact, if any, you think these proposed 
airline mergers are going to have on these customer 
satisfaction concerns.
    Mr. Mead. This Committee and several Members of it have 
asked us to examine that issue and that work is ongoing. I feel 
at this point in our work that it is fair to say that there is 
no mechanism in government for fully assessing the implications 
of this on customer service. That just is not included in 
traditional types of analysis, including merger analysis, 
including transitional service disruptions.
    Being from North Carolina, you know what happened when the 
railroads merged. After those mergers were consumated, the 
Surface Transportation Board, which has jurisdiction over it 
said, ``Oh my.'' Before we approve another merger, we are going 
to make sure they have a transitional service plan so we can 
see what is ahead. I know there are some that would make that 
case for the airlines as well. But the work on the direct 
answer to your question is ongoing, sir.
    Senator Edwards. Do you have notion of when we might have 
an answer to that?
    Mr. Mead. April or May.
    Senator Edwards. April or May.
    Mr. Mead. Yes.
    Senator Edwards. OK. Well, I am glad you are doing that.
    Mr. Mead. One issue on the scheduling that is I think 
interesting about a merger is if you have three airlines that 
are competing for peak hour slots and one of those airlines 
goes away, well, intuitively, that would suggest that you would 
have less competition for those scheduling slots. Hence, less 
of a crunch at peak hours. I certainly do not want people to 
take that comment as a recommendation that people go out and 
merge. But I think that is probably one result.
    Senator Edwards. Thank you, Mr. Mead. Thank you, Ms. 
Hallett. Mr. Chairman.
    The Chairman. Senator Fitzgerald.

            STATEMENT OF HON. PETER G. FITZGERALD, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Fitzgerald. Thank you, Mr. Chairman. Ms. Hallett, I 
would like to follow up on Senator Edwards' questioning. I just 
want to make sure I understand what you are saying about the 
airlines' contract of carriage. The Inspector General is 
recommending that the airline customer service commitment 
provisions be made enforceable and legally binding with their 
passengers by putting them in the contract of carriage. Do you 
oppose making those commitments legally binding on your airline 
members?
    Ms. Hallett. Senator Fitzgerald, I think he was talking 
about one specific point. But I would respond by saying that 
six of our members have already placed the entire plan that 
they have developed individually into their contract of 
carriage. Others have placed major parts of their plans in the 
contract of carriage. We are now in discussions, all of the 
carriers that have not placed the entire plan into the contract 
of carriage. We are in discussions over that.
    However, we--ATA cannot force a member to do something that 
their management does not believe is in the best interest of 
that carrier. I believe there is going to be overall an effort 
by each carrier to accomplish that goal, but I cannot promise 
it.
    Senator Fitzgerald. You would agree that if those promises 
are not in that contract, there is no way for a consumer to 
enforce those promises that the airlines made back in 1999.
    Ms. Hallett. Unless it is already in the law which is in 
some cases the fact.
    Senator Fitzgerald. Do you not think those promises sort of 
ring hollow if they cannot be enforced. Would that not be 
correct?
    Ms. Hallett. Well, Senator, I think almost all of them have 
already gone into the contract of carriage. There are very few 
that are not there now. Those are being discussed for permanent 
placement in the contract of carriage. But I cannot guarantee 
that that will happen.
    Senator Fitzgerald. OK. I want to go back to the over-
scheduling problem. As you know, I represent Illinois. We have 
the famous or infamous Chicago O'Hare Airport. There were a 
couple of investigative stories by our local papers, the 
Chicago Sun Times and the Chicago Tribune, how they checked to 
see how many flights were scheduled to take off at one time. 
Given that the airport's capacity is only for three flights to 
take off at any one time, they found that the airlines were 
regularly scheduling as many as 20 to 25 flights to take off at 
the exact same minute.
    8:45 a.m. was one of the times they have cited. Which 
apparently the airlines' marketing experts go out, find out 
what time people want to take off in the morning. 8:45 is a 
popular time. So the airlines go and schedule a bunch of 
flights to take off at 8:45 in the morning. But since the 
airlines over-schedule them--they schedule 20, 25 flights to 
take off at 8:45 in the morning. FAA is only going to let three 
flights take off at that time.
    It seems to me the airlines know darn well that most of the 
flights they schedule at 8:45 in the morning have little or no 
chance of taking off at 8:45 in the morning. Is not that a bait 
and switch for airlines to engage in that kind of technique? 
Are they not doing that knowing that many of those flights are 
not going to take off at that time?
    Ms. Hallett. Senator, they schedule their flights based on 
demand by the passengers. As you well know, at Chicago O'Hare, 
you have different terminals with a distance that is quite 
different from terminal A or terminal D to the runways to which 
those particular flights are going. You have a number of 
different runways. They're not all scheduled for the same 
runway.
    Obviously, in bad weather you have significant problems. 
Our air traffic management people estimate that with all of the 
planes that are scheduled for an 8:45 departure at Chicago 
O'Hare by a variety of different carriers--and they cannot 
discuss with one another their schedules and whether or not 
they are at the same time.
    Senator Fitzgerald. Should we try and help you with that to 
give you some kind of exception?
    Ms. Hallett. That is under discussion. The whole issue is 
under discussion. But nonetheless, we find that because of the 
peaks and valleys that all of those planes in good weather will 
be cleared out within 15 minutes to 19 minutes--I hate to be so 
precise, but that is what our air traffic management people 
tell us--they will all be off the ground.
    Some of them obviously are going to arrive at the runway 
maybe 10 minutes apart from one another simply because they are 
coming from different parts of the terminal, going to different 
runways. So it has worked well. Again, it is based on the 
demand of our passengers.
    Senator Fitzgerald. It is not a contributing factor to the 
delays at O'Hare?
    Ms. Hallett. Overall, no.
    Senator Fitzgerald. Oh, really?
    Ms. Hallett. We do not believe so.
    Senator Fitzgerald. You do not think--could they schedule--
should there be any limitation at all? Should you be able to 
schedule 100 or 200 flights to take off at the same minute?
    Ms. Hallett. Well, we would not have that many passengers. 
So there would not be that problem.
    Senator Fitzgerald. I do not know. I think that demand has 
exceeded O'Hare's capacity since 1969. There is almost an 
unlimited demand. I wonder, Mr. Mead, you mentioned the idea of 
requiring airlines to disclose ahead of time how many times the 
flight has been delayed in the past. What about requiring them 
to disclose how many other flights are scheduled to take off at 
that exact same minute?
    Mr. Mead. Well, you certainly could do that. We did not 
recommend that specifically because we wanted to get at the 
core issue. We just felt that airlines should disclose if a 
flight is being delayed 40 percent of the time. Our analysis 
showed there were 240,000 flights this past year that at least 
for one single month were late or canceled 40 percent of the 
time. By late, I do not mean 15 minutes. I mean at least a half 
hour. That would I think start to show exactly how serious the 
situation is.
    I wanted to follow up on your point. I think your point is 
legitimate. I have paid visits to the leadership of three major 
carriers. They do know at their key airports what that airport 
can handle at a particular point in time during the day.
    A problem they have is if they were to reduce the number of 
flights that they have going out, for example, during the peak 
hours of 4 o'clock to 6 o'clock, they are concerned that their 
competitor will immediately turn around and fill that gap. 
Under current law, they cannot hold discussions about how to 
work that out. Ms. Hallett was referring to whether there are 
discussions ongoing about how to deal with that. I think that 
is a legitimate issue. I have seen it enough to form an opinion 
that that is a matter that Congress----
    Senator Fitzgerald. Would it not be in everybody's interest 
to give them an limited antitrust immunity to negotiate the 
schedules? It would be in the passengers interest and the 
airlines' interest. So that we do not have all this over-
scheduling at the same time.
    Mr. Mead. I am not a student, sir, on how you can monitor 
this from an antitrust standpoint. I understand it has been 
done in the past. It does seem to me that the American public's 
patience is wearing very thin on this issue and that we are not 
going to have a lot of new runways in the next 3 years.
    I think this is an area that has to be explored. It 
probably needs to be explored for the next 2 or 3 years. I 
would say hopefully it would only be a short-term thing. We 
could get over this hump where we do not have any 
infrastructure, in trying to modernize the air traffic control 
system.
    But we have got a problem out there. I have seen some 
airlines, sir, make a good faith effort on this scheduling 
issue. But they are deathly afraid that their competitor will 
turn around and fill the glass right back up.
    Senator Lott. Would the Senator yield on that very point?
    Senator Fitzgerald. Yes.
    Senator Lott. What responsibility should or does the 
airport have in this regard? They are in control of these 
runways. They know if there is 25 flights scheduled to take off 
at the same time. Do they not have any kind of ability or 
responsibility to deal with this?
    Mr. Mead. I do not think so, sir.
    Senator Fitzgerald. I think I have asked that question 
before at O'Hare and they said it is up to the airlines to 
schedule their flights. There is nobody playing referee here.
    Mr. Mead. That is true. FAA, for its part, says, ``Well, we 
will make sure the system is safe.'' It is not our job to 
regulate the number of flights into a place. LaGuardia being a 
possible exception to that.
    The Chairman. LaGuardia has taken some action and we may 
see more of that in the future.
    Mr. Mead. The situation got better at LaGuardia. It is 
still nothing to write home about certainly. But it is not 
quite as severe as it was.
    Ms. Hallett. Senator, I should point out that we do have 
some carriers, as has been alluded to by the Inspector General 
that are looking at the schedules at airports where there is an 
impacted time at peak hours. So they are looking at everything. 
It is not limited to that. They are looking at everything to 
try and come up with ways to relieve the situation until such 
time as we get more runways, more equipment.
    The Chairman. Well, one of the other proposals is to have a 
system where you pay a whole lot more money for those specific 
times for take off and landing. That may have put some market 
effects in there. But this is a huge problem.
    Senator Fitzgerald. Auction the slots off.
    The Chairman. This is a huge problem. There are many major 
airports in America where there are more planes scheduled to 
take off than is possible. Then you get a bad weather day. We 
all know about that. So I thank you Senator Fitzgerald.
    Senator Lott.

                 STATEMENT OF HON. TRENT LOTT, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Lott. Mr. Chairman, I want to thank Mr. Mead for 
his report and for his appearing today. Ms Hallett, thank you 
very much for your testimony and for your efforts in this 
regard. I remember a year or so ago, we were talking about the 
situation. I tried to make it clear that the airlines and the 
industry needed to deal with this problem on a voluntary basis 
on your own or we were going to do it for you. That was not 
necessarily a good idea.
    To your credit, you took some initiatives which have borne 
some fruit I think. Obviously, it is a mixed bag. You have 
improved in some areas. You have got other areas you really 
need to do more.
    But Mr. Mead is right. The patience of the passengers is 
very thin. They are out done. They are disgusted. They are mad. 
I do not think their temperature is better this year than it 
was last year. Probably worse. This one has not been a good 
year for many, many reasons.
    Also, it is one of the few areas where we as Members of 
Congress, Senators included, get to endure the same thing our 
constituents do. We not only get mad because of what we endure 
ourselves. We are flying on a plane with our constituents who 
recognize us and pass on their thoughts.
    That is why on one occasion on behalf of the passengers of 
the plane that I was flying on, I can't remember where it was, 
maybe Cincinnati, I put in a call to the chairman of the board 
of the airline that I was flying and amazingly got through to 
him. But the passengers and I were really mad.
    But I hope that you will continue to work. You have got to 
make a lot more progress than you have been making. Or you are 
going to be faced with legislation that will require more to be 
done.
    But I think that a lot of the solutions are common sense 
issues. It is just like this thing that Senator Fitzgerald is 
talking about. That makes no sense. It is indefensible. It is 
even dishonest. I do not care if they do get out within 15 or 
19 minutes. The idea that they scheduled 25 flights or 21 
flights at the same time is a lie.
    If we are the problem, if we need to change the law, then 
let us do it. But that is something, again, I think we are 
focusing too much on the effects and not enough on the cause. 
We are worried about what our passengers are having to endure. 
We are not paying attention to what is causing this problem.
    A lot of the solutions require common sense on the part of 
the airlines, the airports, the passengers and the Members of 
Congress. I think we have not done that. You have not done 
that. It is high time that we do it.
    Again, you need to do everything you can to help passengers 
with flight information and cancellation information. But 
again, that is the effect. What causes those problems is what 
we are not focusing. We can require all this stuff until the 
cows come home. But it is going to still be miserable if we do 
not deal with the problem it is causing, the discomfort that 
our constituents are having to deal with.
    Now, what are those problems? Some of it is the good Lord 
and the weather. I mean, you have to acknowledge that the 
weather is a big problem. Does it rain, sleet and snow in 
Atlanta everyday when I land? Just about. Sometimes I think 
maybe it is because the airport is there. That is why the 
weather is so bad there.
    But it is a factor. People have to understand. Safety is a 
factor. You know, our constituents demand all these things, but 
they also want to be safe. They do not want to fly when there 
is a wind sheer fixing to blow an airplane into the ground. 
That is one problem.
    The second problem is we--the government--have not done our 
job in terms of upgrading and improving our transportation 
systems in America. Our ports, our railroads, our roads, our 
bridges and our airports.
    Thank goodness we have got AIR-21. Now we have got to make 
sure that AIR-21 is carried out and the money is spent. I am 
for more of everything. I am for longer runways, more runways, 
more airports in Chicago if they want them, more airports in 
New York.
    Let us get with the program. I mean, 700 million took to 
the skies this year and it is going to double to about 170 
million more passengers soon. I do not know. It is going to 
continue to explode and we have got to deal with that.
    Now, I guess we can say, no, we are not going to build 
anymore airports or it might disturb the green frog or 
whatever. But if that is what our constituents demand, then 
they have got to understand they are not going to get the 
airplane service they want. But there are so many inexplicable 
things going on in the airline industry that just defies common 
sense.
    There is another problem. I have got two questions. Since I 
know we are all making speeches. So we need to ask a couple of 
questions. One of them to you, Mr. Mead. I mean, I think that 
labor is a major part of the problem. You have got flight 
attendants threatening strikes.
    You have got baggage handlers that will not get the bags 
off the planes, work when they want to, throw our luggage 
around like it is a piece of dirt. You know, half the time when 
I land at Washington, I threaten to crawl through the luggage 
hole, get out there and show them how to offload a plane. I do 
not understand why some management person does not go out there 
and say get going. Get this stuff off. Or you are fired. Right 
there on the spot.
    Now, maybe you cannot do that. But if you cannot, you damn 
well ought to be. The very idea now that we have got some 
pilots threatening to strike, knowing what pilots make, and 
slow down and all this stuff, there is a big part of the 
problem. That is the cause that we are not paying any attention 
to.
    Now, I am not picking on labor. I am the son of a shipyard 
labor union member. But we see what happens with all this 
stuff. So what I want to ask you, Mr. Mead, does your report 
address that issue, the problems? How much these delays and 
cancellations are caused by work stoppages, slow downs, all 
this sort of stuff? Is that not a part of the cause of the 
problem?
    Mr. Mead. It certainly is. Our report does not get into 
that. But I will just give you a figure. I have a figure here 
in front of me that goes to your point. This is a number of 
actual flights consistently delayed in any given month, 80 
percent or more by airline for 2000. United's numbers, 23,000 
flights. The next runner up was 6,600 flights.
    Senator Lott. These are delayed flights?
    Mr. Mead. Delays and cancellations.
    Senator Lott. But you are just citing numbers. You did not 
cite the cause.
    Mr. Mead. No, I am saying that that number takes into 
account the cancellations and delays this summer.
    Senator Lott. How many of those delays and cancellations 
were caused by labor slow downs or work whatever actions?
    Mr. Mead. I do not know. We have not done that at all.
    Senator Lott. I would like for us to find that out. I would 
like to encourage the airlines and airports also to publicize 
what these people that are threatening to strike are making. 
Because if our constituents knew what they are making, there 
would be another uprising, a war. That would get started real 
quick.
    When you represent constituents who have an average per 
capita income of $15,000 a year or $20,000 and you look at 
these salaries, and then we have got the very idea that we 
would have work slow downs and what that does to the flying 
public, I think it is totally irresponsible. Do you not have 
anything in your report on that?
    Mr. Mead. No, sir.
    Senator Lott. Let me ask you, is that a cause of the 
delays?
    Mr. Mead. It is certainly part of the cause. Sir, we will 
try to see if we can isolate that very point and get back to 
you.
    Senator Lott. I would like for us to address the cause more 
than the affect, the result. If we stop what is causing some of 
these delays and the difficulties in the airline industries, 
then our constituents and their customers will not be penalized 
as much.
    Let me give you another--this peak travel kind of thing 
again. Would it not be real simple that if some airline moved 
their takeoff time in Atlanta from 5 to 6, other airlines could 
move in and fill that void. You know, their concern is if I 
move, then some other airline has an advantage. We ought to 
stop that. Now, can that be done with regulation? Or do we have 
to have a wall to do that? Mr. Mead, do you know?
    Mr. Mead. You would need either the authorization of the 
Antitrust Division/Justice to do that. Or you would need a law.
    Senator Lott. Well, I think clearly we need to do that. I 
want to say the Senator Fitzgerald, I hope that you will 
address that.
    The most important thing of this report and this hearing I 
think comes on page 14 of your--I guess this is your statement. 
Again, it gets at the cause and not the effect. You suggest 
that we establish and implement a uniform system of tracking 
delays, cancellations and their cause. I mean, how simple is 
that?
    I mean, again, it makes good common sense. Develop capacity 
benchmarks of our nation's top 30 airports, provide a common 
framework on understanding what maximum rival departure rates 
can physically be accommodated at airports. Surely, we ought to 
do that. If we do not know that, that is amazing. We need to 
try to come up with some way to deal with those realities of 
the limits of those airports. What do they need? Expand them, 
limit the flight takeoffs. Some common sense stuff.
    Mr. Mead. You are absolutely correct. Do you know with 
respect to those recommendations that you recited, do you see 
what it says in the preamble? It says over the past year, we 
have made these recommendations. We made these recommendations 
in August and September before this committee----
    Senator Lott. But has anything been done about it?
    Mr. Mead. They have formed a task force.
    Senator Lott. They formed a task force to what?
    Mr. Mead. With respect to the first one, former Secretary 
Slater formed a task force, which came out with recommendations 
I think in December. Just yesterday I was speaking to Secretary 
Mineta, about the fact that they have these recommendations out 
there and now they need to follow through on implementing them. 
He said yes. I think he will move forward on that.
    On the second one about capacity benchmarks, that is the 
critical one and the recommendation there was for the top 30 
airports. FAA committed to do it and said it would probably be 
done in 6 or 7 weeks.
    Senator Lott. Beginning when?
    Mr. Mead. Beginning in September. So we should have had 
them in November. They have been making progress on them and I 
think they are close. But it is time to let these out of the 
box.
    Senator Lott. Then your third point, develop a strategic 
plan for addressing capacity shortfalls in the immediate, 
intermediate and long-term. I would like to suggest to the 
Chairman and to our staff that we have a further hearing soon 
on these three items to see if they are being done. I mean, how 
long does it take a task force? This is ridiculous.
    So I would say to my friend, Senator Wyden, I am very 
sympathetic to what he wants to try to do on behalf of our 
constituents and the passengers of the airline industry and the 
others that are working on this. But I think we should not just 
focus on the inconveniences. We should focus on what is causing 
the inconveniences. That is where we have failed as a Congress 
and with previous administrations of both parties.
    But the good news is what did do AIR-21. We can do a better 
job. But we need to get on with it. Because this problem is not 
getting any better. It is getting worse.
    Senator Wyden. Would the Senator--would the leader yield 
just for a minute? I want to associate myself with your 
remarks. I am absolutely committed to working with you and our 
colleagues on a bipartisan basis on the infrastructure issue.
    For me, the concern is, it is going to take some time in 
order to get those infrastructure improvements. That is why I 
do not think we ought to leave passengers in the dark with 
respect to information that can make their life more bearable 
as we sort through the infrastructure issues. I thank the 
leader for yielding.
    Senator Lott. I believe the Chairman is----
    Senator Rockefeller. Senator Smith.

                STATEMENT OF HON. GORDON SMITH, 
                    U.S. SENATOR FROM OREGON

    Senator Smith. Thank you. Mr. Mead and Ms. Hallett, thank 
you for your testimony and this report. I am here to learn 
about the airline industry. I come to this committee quite 
knowledgeable about the agriculture industry. In the 
agriculture industry, a Federal standard set by the United 
States Department of Agriculture is always the floor.
    Producers try and meet a standard of a customer or 
something higher than the government sets. It becomes a real 
assistance in increasing quality and service and frankly, I am 
wondering if, as I learn about your industry, its complexity is 
so enormous and there are so many factors that go into serving 
customers at a price and quality they can afford.
    I am wondering if having Federal standards in this area 
would not actually be helpful to at least establish a floor. 
Because on some critical areas, we are falling way short of 
that. I do not think either of you would defend a quarter of 
the flights being delayed or canceled and the inconveniences 
that flow from that.
    I wonder if--I missed the first part of the hearing, and I 
apologize for that--but I wonder if you can tell me why Federal 
standards on some of these information aspects would not be 
helpful.
    Mr. Mead. Well, actually I think the standard that people 
be informed about delays and cancellations does make sense. 
Now, it is also true that in 1999 when the airlines entered 
into these commitments, some of the commitments they made, for 
example, holding a quoted fare or canceling a reservation 
within 24 hours without penalty, benefited the public fairly 
quickly. To establish that, the Federal Government would have 
had to do it through regulation or the outright adoption of a 
law that said that.
    The Department of Transportation's track record, at least 
in the past, on passing regulations has not been stellar, 3.8 
years. In this case, we got the benefit through a voluntary 
commitment from the airlines.
    On some of these other areas though, sir, like bumping, 
basic disclosures, I think we should have a set, minimum 
guideline.
    But as I was saying before, and perhaps this was before you 
came in, I would counsel to stay away from trying to legislate 
good service. You can get down in the weeds on this stuff very 
quickly. You say, well, your seat has to be such and such. We 
want so much leg room and that type of thing.
    That is the only thing that makes me nervous about Federal 
standards. I think we are beginning to see some competition in 
the customer service area that I think is healthy. Certainly, 
we want to encourage that.
    Senator Smith. Ms. Hallett, along that same line, in 
responsibility ads, I think they are by American Airlines, 
where they were trumpeting and I think proudly and rightfully 
so many flights on time. It was a wonderful energetic ad that 
really made me attracted to their airline.
    But I do not see that ad anymore. I hear a lot of 
complaints that things are not on time. Not just with them, but 
with airlines generally.
    Understanding better the complexity of your industry, 
rising fuel costs, work stoppages, lack of runways and 
facilities, the government's failure of its part of this 
equation. I wonder if the airlines are just so besieged right 
now trying to stay in the game, not being overtaken by mergers 
or making a merger that the customer is just being lost in all 
of this. I wonder if you can speak to that general impression 
that I have and how specific questions as to quality or 
information might be helpful or hurtful.
    Ms. Hallett. Senator Smith, it is an interesting question. 
In my opening comments, I did mention that prior to this issue 
being brought to our attention in 1999, we were not devoting 
enough effort to the service to our customers. Believe me, the 
activity that took place in 1999 got our attention as it well 
should. I am very pleased with the fair and serious analysis 
that we have received from the Inspector General.
    I was very pleased to also hear his grading of us this 
morning. While we have areas where there is an enormous amount 
of work to be done, overall we have also accomplished a great 
deal.
    This is just the beginning. When you have human factors to 
deal with, technology to deal with, none of it happens 
overnight. But the commitment is there from our CEOs on down to 
get better and better and better as we all must.
    We want to work with you and the other members of this 
committee and the Members of Congress to ensure that we do not 
slip backwards. I do not believe you are going to give us that 
luxury anyway. But we do not intend to. This is a very serious 
commitment. From a voluntary standpoint, I think we may have 
done more than we might have through legislation.
    An interesting comment about the 24-hour refund. Or not 
refund, but the 24-hour period in which one has now to pay for 
their ticket. It allows them to go out and shop for a better 
deal. But in the case of several carriers, they have now upped 
that anywhere to 48 and in one case 72 hours. That is strictly 
a competitive aspect of what is going on. There are a lot of 
pluses that are taking place and we are going to see many more 
in terms of trying to serve the customers.
    Senator Smith. Unrelated to this issue, the question I have 
because of what I was listening to in the questioning of 
others, Senator Fitzgerald raised a point that frankly startles 
me that there is not a monitor of all this traffic that has the 
ability to say yes and no. I am reminded in my own State 
flights have begun to be restricted for local reasons of noise 
abatement and quality of life issues and that clearly would be 
backing up airline traffic and creating congestion.
    What is the impact of local decisionmaking on the whole 
problem of delays. Is not there a standard frankly that governs 
the whole country? Otherwise, you could have local problems 
developing in a very dramatic way if just so many per day can 
land. Apparently that is happening some places. Is that 
correct?
    Ms. Hallett. That is absolutely true. A good example that I 
mentioned previously is Logan Airport, Boston Logan, where all 
of the approvals have been given for the construction of a 
runway, an additional runway, that would add capacity. But 
sadly, it is a political issue where the local people are not 
going to approve that runway. We have that across the country. 
It will continue to have an enormous impact on our ability to 
serve the customer if we are not able to get runways built.
    Senator Smith. A local decision in Portland, Maine can make 
a big impact in Portland, Oregon.
    Ms. Hallett. Yes.
    Senator Smith. I guess I am just wondering is there a 
recommendation that you are making that there be this monitor 
that have the ability to help orchestrate traffic? Not just on 
safety, but just on honesty. So that passengers can have some 
expectation that what the schedule says has some authority 
behind it and they can rely upon it.
    Ms. Hallett. Well, the Inspector General was asked to look 
into this. He has indicated he will and we will certainly 
follow it very closely.
    Senator Smith. Thanks, Senator Rockefeller.
    Senator Rockefeller. Senator Wyden.
    Senator Wyden. Thank you, Senator Rockefeller. I just have 
a couple of questions. Having watched this committee now for a 
number of years, I think the issue is really going to come down 
to how do you make these rights enforceable? In particular, 
what kind of trigger would apply for the various kinds of key 
provisions. I just want to ask a couple of questions that will 
help us, I hope, as we try to deal with those issues.
    Now, the first question for you, Mr. Mead, is my 
understanding is because of the deregulation years past, the 
Federal legislation, consumers in many instances face 
significant preemption issues when trying to address their 
rights at the State level. Is that your understanding as well?
    Mr. Mead. Yes.
    Senator Wyden. All right. If you could give us examples 
where consumers have been able under current law to enforce 
their rights at the State level, that would be very helpful. 
Because what I see happening is that you may end up with 
consumers essentially being lost and their rights being lost in 
this discussion about what they have under State law, because 
that has been referenced today, and what the Congress may 
create, I hope will create, under Federal law.
    So if you will give us, given the fact that you have told 
us this morning there is a significant preemption issue now, 
give us some examples where consumers have been able to enforce 
their rights at the State level, that would be very helpful. 
Because I know in my home state, Oregon, we hear from people 
all the time about how they were supposed to be on tours and 
their flights were delayed six, 8 hours and missed the tour. 
They could not get reimbursement, went to court and they were 
told there is preemption. You have no remedy. You have got to 
go to the Federal level. So that would be very helpful to have 
a statement of the actions that have been brought successfully 
at the State level.
    The other question that I wanted to pursue with you is that 
my inclination as we deal with this issue is to make the 
information disclosure provisions effective immediately. That 
would be--for example, the provision you have called for where 
there have been extensive delays 40 percent of the time or 
something of this nature, that would be effective immediately. 
But my inclination would be to give the airlines 6 more months, 
one last try for some of these provisions that you call for 
that would take a bit longer.
    I know you cannot advise the Congress, but given the fact 
that this triggering mechanism I think is going to be the issue 
in terms of getting passengers some rights, if we teed it up 
along the lines I have just mentioned, would you find that 
consistent with your report to make the information disclosure 
provisions effectively immediately, information in their 
possession, give them 6 more months in some of these areas--say 
the frequent flyer arrangement. You make it clear that people 
are not getting a fair shake on frequent flyers. Give them 6 
more months to straighten that out. Would that kind of thing be 
consistent with the recommendations you make today?
    Mr. Mead. Yes, I think so. In fact, the preface to our 
recommendations says that Congress has the option of giving the 
airlines, for certain of those items, a fixed period of time to 
do it on their own. If I understand you, you are describing a 
two- pronged approach. One approach goes toward disclosure of 
various issues. The other goes toward more substantive things 
that you would look to the airlines to do. If they did not do 
it, well, then presumably you would come back in.
    Senator Wyden. Ms. Hallett, you have opposed everything I 
have proposed so far. Will you oppose that?
    Ms. Hallett. We will work with you, Senator Wyden. Again, 
without talking to the airlines first, I do not have the 
authority to do that. But we want to work with you on it. I 
think you are making a reasonable suggestion in many areas. We 
certainly will want to work with the Inspector General as well. 
We will take everything you have suggested very seriously.
    Mr. Mead. One area that I do not think you can solve 
overnight is the overnight accommodations one. For example, the 
question was put to me earlier, well, what would you suggest 
exactly should be the floor? I would have to think further and 
say what would the floor be? On that one, it is not just a 
disclosure issue. It is a substantive issue of what should the 
floor rightly be for a consumer caught at a connecting airport 
in a delay or cancellation situation?
    On the other hand, as I indicated, I think that the point 
about disclosing these chronically delayed flights is more 
easily resolved. We better get going on that one real soon.
    Mr. Mead. I think that really hits the key issue. There are 
going to be some questions that take more time. I happen to 
think this issue of people being left on the runway is an 
important one--and we know what a miserable experience that is 
to just be out there with your little bag of pretzels for what 
seems to be an interminable period of time. We need to recsolve 
the question of what rights would a passenger have in order to 
get off to come back? This kind of thing is not something that 
lends itself to a snap judgment from Washington, D.C. But I do 
think, Ms. Hallett, when you talk about the association, you 
are almost down to 2 members at this point with all these 
mergers.
    Ms. Hallett. Not really.
    Senator Wyden. I hope this time it will be different. 
Because we have tried to meet you halfway. I remember sitting 
with your members the night before we had a markup on the 
bumping issue where we still have problems. I said, look, I 
have got no problem with America's airlines selling people a 
flight on a flight that is fully booked as long as people are 
told that. So we are going to work with you on infrastructure. 
I hope that you will not fight us when we try to get 
enforceable protections for the passengers in this session of 
Congress. Senator Rockefeller, I thank you for indulging me.
    Senator Rockefeller. Never an indulgence, Senator Wyden. 
Always a pleasure. Let me just make a couple of comments and 
then we will adjourn. I thank both of you, all three of you. 
Ms. Hunt, you may want to say something in the course of this.
    Mr. Mead. Thank you. The reason that Ms. Hunt, and it is 
Robin Hunt, is at the table with me is because she is the 
leader, along with Mr. Scott Macey back here of my staff, that 
went around the country living through these 550 delays and 
cancellations. I thought that it would be good for her just to 
take a minute to give her impressions of the work if that is 
permissible, sir.
    Senator Rockefeller. Yes, it would be.
    Ms. Hunt. Well, I think that Mr. Mead, in his statement, 
summarized the effort. Because obviously, it was not Scott 
Macey and myself. We had a huge staff that did spend a 
tremendous amount of time.
    I think that the reason that those kinds of resources were 
committed was just to get a true understanding of how big the 
problem was. I think that the report fairly reflects that we 
did not just find isolated problems. We really tried to give 
every air carrier the coverage that they needed in all of the 
areas and do it thoroughly.
    So I guess mainly that is why I am here, in case there were 
specifics that needed clarification. But I think that the 
report really reflects the extraordinary effort that went into 
this review.
    Senator Rockefeller. OK. Let me just summarize my thoughts 
on the moment and thank you all. I think there is blame enough 
for everybody on all of this. I think there is instinct on the 
part of politicians to look for victims and targets because it 
is easier that way.
    I think to me the most interesting comments that came out 
of this hearing this morning were those just made by Gordon 
Smith who I went racing after to tell him, but he disappeared 
out that door.
    That is what we in America, those of us in Congress, the 
American people, observers, those who write, et cetera, about 
all of this, seem to fail to recognize what this is--that 
aviation is as complex and huge an undertaking, as dominant in 
American business life and pleasure travel life and going back 
to college life, as Cisco is in the Internet.
    I was having breakfast this morning and I read three 
articles about Cisco. Fine. Everybody wants to write about them 
because they are kind of new. Nobody wants to write about 
aviation, particularly because it is something which did--no, I 
am sorry back there. But to the scale, at the scale level, on 
something like IT.
    I was interested in what Senator Burns said. It is not fair 
to criticize somebody behind his back, but I am going to do 
that. When he was doing tickets, it was a different world. 
There were not long waiting lines. So to say that all you have 
to do is make those people who are on the online up front 
positions feel better, act better, was more easily said back 
then than it is today.
    The two most difficult jobs in my Senate office are those 
of the two people who are receptionists and who answer the 
telephone and who at 9 o'clock and at 6 o'clock have to be with 
five blinking lights or seven blinking lights, have to be to 
each individual West Virginian or other person calling, as 
courteous and warm. They cannot fake it. It has to be in your 
voice. That is virtually impossible to do.
    So, No. 1, I am going to object to the idea of blame the up 
front people first. I am not saying that everybody has. But 
some people have.
    Six hundred fifty million people coming to a billion people 
with insufficient people power in the most competitive industry 
in the world including the IT industry--including the IT 
industry--will not cut it. It will not cut it.
    These are people who are under harassment for however long 
they work. I have seen airline customers abuse them in ways 
which you could almost take them to court for. Of course, they 
are legitimately angry because their flight has been canceled.
    I noticed in my own behavior when I am trying to get on a 
flight to Charleston, West Virginia and I hear--I am talking to 
somebody else and I hear flight canceled, I charge over to the 
desk to find out if that was mine. No, it was going to Toronto. 
So, that is OK.
    But, my reaction talks about what my expectations are. But 
my expectations may have nothing to do with the reality of the 
complexity of what it is that we are dealing with. I have said 
this before and I have said it on the Senate floor. I will 
continue to say it that we in Congress have a unique ability to 
not deal with the underlying infrastructure problems that are 
the basis of a lot of these complaints.
    Now, I agree with what Senator Wyden said. If LaGuardia is 
going to add two more airways--which they will have to do 
regardless of what their local citizens and their 
environmentalists think, they are going to have to do it. Or 
else there is no point in us all sitting here and complaining 
because what happens at LaGuardia messes up in Charleston, West 
Virginia or Blue Field, West Virginia. That is the way it is. 
That or the hub, the spoke, gets killed.
    That we are going to have to face those issues much more 
forthrightly.
    I also think that it is hard when I happen to be a 
supporter of United/US Air/DC Air merger now added onto by 
others. I support it because it is good for my State and I 
think it is an access thing which works well. If it is good for 
my state, I am going to support it and I do. I could go on for 
a half hour, but I will not.
    The mergers, though, are going to create further problems 
for you, Ms. Hallett. I mean, I think about the CSX Norfolk 
Southern merger on railroads. It is very odd. I do not like 
railroad mergers. They have no antitrust--they have antitrust 
protection. They should not. You do not. I do not like the way 
they behave. I do not like the way they treat captive shippers 
and all the rest, but that is another subject.
    But it has been fascinating to watch those two cultures try 
to mix--Norfolk Southern and CSX to work themselves out. They 
cannot do it very well. Terrible, terrible problems. We saw 
that with Southern Pacific and Union Pacific and the other one 
in the West.
    So I have to assume that mergers happen for a reason. I 
happen to think that the United/US Air one is more of a bailout 
than a merger. Because I do not think that US Air is going to 
be able to sustain itself. I think the same way with 
Continental.
    Therefore, it may be a service to all of us that rather 
having no flights, they are taken over by stronger entities. 
But nevertheless, having said that, that is going to create 
more problems because it will be more people under single 
management and more confusion.
    So I guess I would note two things. One is that in your 
report, Mr. Mead, that on nine out of the 12 categories, the 
airline's got either an A or a B. In three categories, they got 
bad marks.
    Am I to necessarily believe that the airlines having gotten 
good marks on nine things and not good marks on three things 
are going to try to improve? I think they are going to try to 
do that. Because I think competition will force them to. I 
think my getting on railroads and declining to fly, like those 
who support Amtrak, will encourage that kind of thing.
    But all of this is within the context of a billion 
passengers of FedEx being I think the second largest airline in 
the world in terms of the number of planes. We do not even 
think about that. No passengers, but lots of packages. They 
have to have runways too, UPS, et cetera.
    I think the point made about labor is a legitimate one. I 
think labor is very much aware of this. There is enormous 
discrepancy between what pilots make on the main line and what 
they make in commuter airlines.
    If I were a pilot on a commuter airline, I think I would 
notice that. They are not the ones who are doing job actions 
which you have got the mechanics and you have got the flight 
attendants and the rest of it. All of these things I think are 
factors.
    But I think the overlay of all of this is the enormity of 
the industry, the complexity of the industry, the fact that so 
few people pay that much attention to it. Ron Wyden, you are 
one of them. You can see that Gordon Smith is going to be 
another of them. I think that we are going to have to do a 
whole lot of things in this country which are not particularly 
popular.
    It was very interesting to me that--this will be apropos of 
nothing, but I am going to say it anyway--that England was 
going down in World War II. President Roosevelt, with all of 
his persuasive powers, could not convince the Congress or the 
American people to even do lend lease, which I do not think was 
either constitutional or legal. But he came up with it. The 
person who saved that, who made it possible, was not President 
Roosevelt, was not the American people, but was a man named 
Wendell Wilkie who Roosevelt had just defeated who came and 
testified before Congress to tell the truth.
    All of a sudden, we passed lend lease and the whole course 
of things began to change.
    I say that only to say that the ability of the Congress, of 
the American people, of the industries that we deal with, to 
overlook problems or not deal with them or be unable to talk to 
each other in sort of anything but hearing style manners where 
we carefully phrase or whatever is regrettable I think and not 
helpful.
    But I will conclude on the fact that I remain hopeful. I 
share Ron Wyden's impatience. I do not particularly want to 
regulate seat width. I do believe, because I know most of the 
airline executives, that they are on the front lines of trying 
to make things better. I do think after 1 year that nine out of 
12 getting an A or a B is not bad and it is worth at least a 
second year to see what happens.
    But this is the most complex industry that I know of. I 
think we have to give them a chance and push them and be angry 
about them and take trains if we are or whatever. But that we 
have to give them the chance to pick up on the essential needs 
of the on-aircraft delays that you mentioned, the bumped 
passengers, notifying customers of delays, cancellations.
    I think there are ways those can be done. I think we ought 
to give them the chance to do that.
    Unless you have something to say? The meeting is adjourned. 
Thank you.
    [Whereupon, at 11:40 a.m. the hearing was adjourned.]
  

                                  
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