[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF U.S. AIRLINE CUSTOMER SERVICE
=======================================================================
(115-13)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 2, 2017
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online at: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=transportation
______
U.S. GOVERNMENT PUBLISHING OFFICE
25-311 PDF WASHINGTON : 2017
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
Vice Chair Columbia
FRANK A. LoBIONDO, New Jersey JERROLD NADLER, New York
SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida STEVE COHEN, Tennessee
JEFF DENHAM, California ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky JOHN GARAMENDI, California
MARK MEADOWS, North Carolina HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT PERRY, Pennsylvania Georgia
RODNEY DAVIS, Illinois ANDRE CARSON, Indiana
MARK SANFORD, South Carolina RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia DINA TITUS, Nevada
TODD ROKITA, Indiana SEAN PATRICK MALONEY, New York
JOHN KATKO, New York ELIZABETH H. ESTY, Connecticut,
BRIAN BABIN, Texas Vice Ranking Member
GARRET GRAVES, Louisiana LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina JARED HUFFMAN, California
MIKE BOST, Illinois JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas FREDERICA S. WILSON, Florida
DOUG LaMALFA, California DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
CONTENTS
Page
Summary of Subject Matter........................................ iv
WITNESSES
Oscar Munoz, Chief Executive Officer, United Airlines,
accompanied by Scott Kirby, President, United Airlines:
Testimony.................................................... 6
Prepared statement........................................... 86
Responses to questions for the record from the following
Representatives:
Hon. Mark Meadows of North Carolina...................... 100
Hon. Brian Babin of Texas................................ 101
Hon. Brian J. Mast of Florida............................ 102
Joseph Sprague, Senior Vice President of External Relations,
Alaska Airlines:
Testimony.................................................... 6
Prepared statement........................................... 105
Responses to questions for the record from the following
Representatives:
Hon. Mark Meadows of North Carolina...................... 109
Hon. Brian J. Mast of Florida............................ 112
Bob Jordan, Executive Vice President and Chief Commercial
Officer, Southwest Airlines:
Testimony.................................................... 6
Prepared statement........................................... 114
Responses to questions for the record from the following
Representatives:
Hon. Mark Meadows of North Carolina...................... 117
Hon. Brian J. Mast of Florida............................ 117
Kerry F. Philipovitch, Senior Vice President of Customer
Experience, American Airlines:
Testimony.................................................... 6
Prepared statement........................................... 120
Responses to questions for the record from the following
Representatives:
Hon. Mark Meadows of North Carolina...................... 126
Hon. Brian J. Mast of Florida............................ 127
William J. McGee, Aviation Consultant, Consumers Union:
Testimony.................................................... 6
Prepared statement........................................... 130
SUBMISSIONS FOR THE RECORD
Letter of April 11, 2017, from Hon. Lloyd Smucker, a
Representative in Congress from the State of Pennsylvania, to
Oscar Munoz, Chief Executive Officer, United Airlines.......... 48
ADDITIONS TO THE RECORD
``Essential Reforms Needed to Stop Unjust Airline Passenger
Ejections and Bumping'' and ``Proposed Airline Passenger Bill
of Rights 2.0'' from Paul Hudson, President, FlyersRights.org,
submitted by Hon. Michael E. Capuano, a Representative in
Congress from the State of Massachusetts....................... 137
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OVERSIGHT OF U.S. AIRLINE CUSTOMER SERVICE
----------
TUESDAY, MAY 2, 2017
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to notice, at 9:32 a.m. in room
2167, Rayburn House Office Building, Hon. Bill Shuster
(Chairman of the committee) presiding.
Mr. Shuster. The committee will come to order. I first want
to recognize Mr. LoBiondo for a motion.
Mr. LoBiondo. Pursuant to rule 1(a)1 of the rules,
Committee on Transportation and Infrastructure, I move that the
chairman be authorized to declare recess during today's
hearing.
Mr. Shuster. The question is on the motion.
All in favor, signify by saying aye.
All those opposed, signify by saying nay.
In the opinion of the Chair, the ayes have it, and the
motion is agreed to.
I first want to start by thanking all the witnesses for
being here today. You have accepted our invitation to testify
on this oversight hearing on airline customer service. We
invited all the major carriers to participate, and you were the
brave few to be here with us to seek answers regarding the
treatment of passengers in the airline industry.
Now, air travel can be a stressful experience for
passengers, as many of us on this dais knows. We are
passengers, many here are passengers on a twice-a-week basis,
flying all over the country. But anyone who flies knows just
getting on a plane can be stressful. Getting to the airport,
checking in, getting through security, and getting to your gate
on time can rattle even the most seasoned traveler.
But the whole process starts with the purchase of a ticket.
When one of our constituents buys that ticket, there is an
expectation that they will be treated fairly and with respect
by the airlines and their employees. There is also an
expectation that the ticket will be honored, and the airline
will get them to their destination safely.
I used to be in business. In fact, I was in business for 20
years. And one of the fundamental rules of any successful
business is that the customer comes first. And, as I said, I
spent 20 years face to face in the retail business with
customers, so I know firsthand how a customer is supposed to be
treated if you want to be a successful business.
And so there is something clearly broken when we see
passengers being treated the way some of them have been treated
on recent flights. Regardless of the contractual relationship
between the airline and the ticket holder, it is just common
decency and common sense that you don't treat a person that
way, let alone a paying customer. As I mentioned, Members of
Congress fly a lot. So do many of our constituents, the people
in this room, and those watching online. We have all been in a
situation where we just want to get to our seat, get in the
air, and get home as quickly as possible.
But imagine, almost 7 hours into a long flight, and you get
physically ripped out of your seat that you paid for, thrown
off the plane, and you get your teeth knocked out. Or imagine,
while single-handedly trying to get your infant children on a
flight, an attendant yanks your stroller away, nearly hits your
baby with it, then almost comes to blows with another passenger
who stands up for you.
These are just recent examples of some serious, disturbing
customer service breakdowns. I expect we will hear more
examples when the members of this committee get their
opportunities to question the witnesses. There will be tough
questions today, and make no mistake about it, you owe the
public and this committee answers. Hundreds of millions of
people fly in this country every year. In fact, 2 million
people will fly today, or something close to 2 million, and
they are tired of being treated inappropriately and without
courtesy. Something is broken, and the obvious divide between
passengers and the airlines needs to be addressed.
That is why we are here today. We are here to learn. And I
want to repeat that. We want to learn. We want to hear what the
breakdown and what the response is from the industry to make
sure that it doesn't happen again, to learn about these
customer service policies, what you are doing to improve the
customer experience, what needs to be done to make some
incidents like the ones we have recently witnessed not happen
again, or never happen again.
This won't be a pleasant hearing for the witnesses today,
but I do want it to be constructive. And I want to stress that.
This needs to be constructive. We need to come out of here with
a better understanding from this committee on what--how the
airlines operate, and a better understanding of what the
response to the airline industry is going to do to change, to
make sure that steps are taken to improve customer service.
Mr. Munoz has been on TV, I watched him. Others have
already made changes to the way they operate. It is a positive
first step, but it is only a first step. This committee and
Congress do not want half-measures or temporary fixes. This
issue is not going away. We are not going away. We will hold
you accountable, and we expect real results.
As a general rule, I don't believe in overburdening our
businesses with regulations, or reregulating industries that
have successfully deregulated. But I shouldn't need to remind
you that Congress will not hesitate to act, whenever necessary,
to ensure your customers, our constituents, are treated with
the respect they deserve.
If we don't see meaningful results that improve customer
service the next time this committee meets to address this
issue, I can assure you you won't like the outcome.
So, again, I want this to be a constructive hearing today.
And I appreciate the witnesses being here today to take these
tough questions because, as I said, it is going to be a tough,
tough hearing today.
And with that, I would like to recognize the ranking
member, Mr. DeFazio, for 5 minutes to make an opening
statement.
Mr. DeFazio. Thank you, Mr. Chairman. Obviously, I
appreciate your holding this hearing. A number of us asked for
a hearing after the highly publicized incident on United
Airlines, and I am pleased we are here today for the hearing,
not pleased for the circumstances.
I would say that today's hearing is really the culmination
of a deterioration that we have seen over a number of years. I
mean just think back to last summer. Hundreds of thousands of
people were stranded and displaced for days because of major
computer meltdowns at two airlines, including Southwest, who is
represented here today.
Airplanes, you know, you are very good at filling them up.
They often don't have a single empty seat, and the seats are
getting smaller, and they are getting closer together. The new
high-profile or low-profile seats are just great; you can jam
more people into the cabin. But it is certainly testing the
patience of the passengers, and testing the patience of the
flight crew.
Just last month we saw an American Airlines flight
attendant trying to goad a customer into a physical fight. I
mean tempers are short everywhere. And then, of course, Dr.
Dao, that incident. And I know, Mr. Munoz, that you have
apologized, and I am interested what you are going to tell us
here today about why this will never happen again, and how
things are going to improve.
My first term in Congress, I introduced a bill called the
Airline Passenger Equity Act, to keep airlines accountable to
their passengers. Among other things, it would have required
them to report information regarding flight delays,
cancellations, reroutings, luggage status performance, bumped
passengers. Some of these provisions were included in the
Passenger Act of 1987. But, 30 years later, I think there is a
lot of room for improvement.
So, I think we are here today to look and hear about where
we could prod, push, or regulate, or legislate to get better
service for passengers.
Today Ranking Member Larsen and I are requesting a GAO
study of what more Congress and the DOT can do to remedy what
has gone wrong with the airline system. We have seen massive
consolidation. We have, basically, four carriers, 80 percent of
the market. And, you know, less than a decade ago we had much
more diversity and much less concentration.
Load factors are at a near 15-year high, 82.4 percent.
Denied boardings, 40,000 passengers denied boarding last year.
And a lot of people just don't have a choice any more. And we
hear that the big problems are air traffic control, but
actually 60 percent of delays were caused by factors within the
airline's control. There is a recent article in Forbes by an
advocate of privatization of air traffic control who said you
can't take 15 or 20 planes off in a 1-minute period from any
airport, no matter what you have as a system, yet airlines
insist on scheduling that way. And, in part, they are at fault,
in addition to the meltdowns in the reservation systems, their
dispatch systems, and other things.
The so-called passengers--you know, passengers' rights,
when they are told to look at your contract of carriage, their
contracts of carriage are, I would say, deliberately obscured,
in terms of legalese. Some airlines, this is a--which one is
this [indicating a document gived to him]? OK, these are the
contracts of carriage. Some of them are 37,000 words, 67 pages
long. And I would say very few passengers have any idea what
their rights are.
I had a staff member last weekend, after we had been
talking about this, decide to print out the contract of
carriage for the airline she was traveling on, and she found
that there was a delay within the control of the airline which
required her to get compensated, as she paged through the whole
thing and found that. But, I mean, how many people have the
patience to do that?
We need simple language disclosure and transparency in
these contracts of carriage. That, in part, was what led to the
incident with United Airlines, was the limitations in the
policies.
Representative Larsen and I have introduced H.R. 1420, the
Know Before you Fly Act, 2 months ago, and it would require
that the airlines provide information to the public regarding
their policies from posing baggage fees, assisting passengers
during widespread disruptions.
You know, as we have seen the concentration grow for a long
time, the airlines neglected their own IT infrastructure. We
had those incidents last summer with dispatch and with
ticketing. And, you know, that really shows, to me, that this
is all being driven by the bottom line, and not by customer
service. And we have got to get some customer service back in
there, and customer rights in there.
And now, you know, now we are being pressured by the
airlines to privatize the air traffic control system, and put
them in effective control of the governing board. I think the
airline industry needs to focus on getting its own house in
order, instead of extending its reach to control our skies. The
airlines' lack of focus on the traveling public and the
repeated failures to invest in IT infrastructure only add to
the many reasons I will continue to oppose privatization of air
traffic control.
With that, Mr. Chairman, I thank you for the time, and look
forward to the testimony.
Mr. Shuster. I thank the gentleman and now recognize
subcommittee chairman Mr. LoBiondo for 5 minutes for an opening
statement.
Mr. LoBiondo. Thank you, Mr. Chairman. Like you, I was
deeply troubled by the events that occurred last month, where a
paying passenger was forcefully removed from his seat. No one
should ever be treated this way, and we are here today to
ensure that this never happens again, and hear how that is
going to take place, so it never happens again.
Flying is stressful. That is just the simple truth.
Passengers are stressed, waiting at a crowded gate for a
delayed flight, or trying to make a connecting flight when the
weather is not cooperating, or spending a long, exhausting day
flying with young children. Unfortunately, there are examples
where airline employees make an already stressful situation
even more unpleasant, and, in some cases, impossible. And those
situations need to be singled out, addressed, and talked about
how they will be solved in the future.
There are also daily instances where flight attendants take
action on their own to improve the flying experience, go above
and beyond, as well as gate attendants and pilots. These
incidents--these situations need to be recognized. But the
recent upsetting incidents were absolutely avoidable. Airlines
need to clearly communicate their policies, and use good, old-
fashioned, common sense when applying those policies,
especially during difficult situations.
Today we will hear what actions airlines are taking to
ensure that passengers receive the best customer service
possible, and I look forward to a productive discussion.
I would like to hear what the airlines are doing to uphold
their commitments to the passengers, and ensure that the paying
customers are treated in a fair and respectful manner. It is
this committee's responsibility to make sure that airlines
follow through on these commitments, and we will continue our
oversight efforts to ensure that positive changes made as a
result to recent customer service debacles are not just a
temporary response to the media spotlight.
I want to thank the witnesses for attending today, and look
forward to hearing the testimony. I yield back.
Mr. Shuster. I thank the gentleman. I would now like to
recognize subcommittee ranking member Mr. Larsen for an opening
statement for 5 minutes.
Mr. Larsen. Thank you, Chairman Shuster, for holding
today's hearing. I don't want to belabor all the points, just a
few of them, so I will be brief. But I do want to note, Mr.
Munoz, I want to make clear to you and all the other airlines
at the table and those who are not here: What happened on
United Express 3411 cannot happen again.
We are here to discuss what went wrong, and how such a
scenario can be prevented from happening again. The incident
that took place on April 9th was a result of United Airlines
policy failures, failures your company took steps to recognize
last week. But in truth, these problems generally are not
specific to United. Several of the airlines represented here
today have recognized room for improvements in their own
bookings, overbooking, and other policies, and have announced
changes in the recent weeks.
I am hopeful these changes result in an enhanced focus on
the paying customer, going forward, and better training and
empowerment of front-line employees who must apply the changes
in their interactions with passengers.
In that same spirit, this morning Ranking Member DeFazio
and I requested that GAO dive deeper into consumer protections
for airline passengers. Understanding current protections and
then identifying any gaps will be critical as we develop
meaningful improvements in consumer protections for the flying
public.
Earlier this year, Ranking Member DeFazio and I introduced
legislation to address two surefire ways that ruin someone's
flight: unexpected fees and lengthy delays. The Know Before You
Fly Act would ensure that airlines remain transparent when it
comes to baggage fees, and would require airlines to inform
passengers at the time of ticket purchase what they will and
will not do for passengers in the event of a widespread
computer network failure.
I would also like to note that consumer protection means
that we must recognize the importance of improving air travel
for persons with disabilities. I was pleased that last year's
short-term Federal Aviation Administration extension bill
included my provision requiring the DOT to move forward with a
long-delayed rulemaking updating the standards for airplane
lavatory access for passengers with disabilities.
We all must continue to advocate for the rights and
protections like these for all travelers. So, to you, they may
be your customers. To us, they are constituents, deserving of
the oversight and questions that we will ask today.
So, with that, I look forward to today's panel, and to the
forthcoming GAO report, and I yield the remainder of my time so
we can proceed with this hearing, Mr. Chairman. Thank you.
Mr. Shuster. I thank the gentleman. Again, I would like to
welcome our panel of witnesses.
Mr. Oscar Munoz, who is the chief executive officer of
United Airlines, he is accompanied by Mr. Scott Kirby, the
president of United Airlines.
Mr. Joseph Sprague, who is a senior vice president of
external relations for Alaska Airlines.
Mr. Bob Jordan, executive vice president and chief
commercial officer for Southwest Airlines.
Ms. Kerry Philipovitch, senior vice president of customer
experience for American Airlines.
And Mr. William J. McGee, aviation consultant for Consumers
Union.
I look forward to hearing your testimony and to working
with you in the coming months, and I ask unanimous consent that
all our witnesses' full statements be included into the record.
Without objection, so ordered.
Since your written testimony has been made part of the
record, the committee would request you limit your oral
testimony to 5 minutes.
And with that, Mr. Munoz, you may proceed.
Microphone.
TESTIMONY OF OSCAR MUNOZ, CHIEF EXECUTIVE OFFICER, UNITED
AIRLINES, ACCOMPANIED BY SCOTT KIRBY, PRESIDENT, UNITED
AIRLINES; JOSEPH SPRAGUE, SENIOR VICE PRESIDENT OF EXTERNAL
RELATIONS, ALASKA AIRLINES; BOB JORDAN, EXECUTIVE VICE
PRESIDENT AND CHIEF COMMERCIAL OFFICER, SOUTHWEST AIRLINES;
KERRY F. PHILIPOVITCH, SENIOR VICE PRESIDENT OF CUSTOMER
EXPERIENCE, AMERICAN AIRLINES; AND WILLIAM J. MCGEE, AVIATION
CONSULTANT, CONSUMERS UNION
Mr. Munoz. Thank you, Chairman Shuster and Ranking Member--
--
Mr. Shuster. And you might want to pull it a little closer
to you.
Mr. Munoz. Thank you, sir. Better? Thank you. And Ranking
Member DeFazio, thank you, as well, and all members of the
committee. We thank you for the opportunity to address the
committee on this, an equally important matter to us.
As you said, my name is Oscar Munoz. I am the CEO of United
Airlines. And with me is our president, Scott Kirby.
The reason I am sitting here today----
Mr. Shuster. Could you pull that mic a little bit closer to
you? Will it move? The whole thing should move. Thank you.
Thank you very much.
Mr. Munoz. Thanks. The reason I am sitting here today is
because on April 9th we had a serious breach of public trust. I
would like to again apologize to Dr. Dao, to his family, to
every person on that flight, 3411, and, of course, to all our
customers and employees worldwide.
Further, I am personally sorry for the fact that my
immediate response and the response of our airline was
inadequate to that moment. No customer, no individual should
ever be treated the way Mr. Dao was, ever. And we understand
that.
For the last 3 weeks, I have spent, literally, every single
day thinking about how we got to this point, what chain of
events culminates in the injury of a customer and the loss of
trust in so many more. And so, last week, on April 27th, we
delivered on our promise to release an analysis of sorts about
what happened, where we fell short, and the actions we need to
take to change the customer experience at United, as all of you
have so wonderfully articulated.
From our perspective, there were four--there were many
failures, but there were four main failures that we outlined in
this report.
First, we called on law enforcement when a safety or
security issue did not exist. That should never happen, period.
Second we rebooked crew at the very last minute. We created
a situation at our own doing that we should have never done.
And third, we didn't offer enough compensation, or enough
incentive, or any options for those customers to give up a
seat. And, therefore, and perhaps the largest failure, our
employees did not have the authority to do what was right, or
to use, frankly, their common sense, as some of you outlined.
And in that moment, for our customers and our company, we
failed.
And so, as CEO, at the end of the day that is on me. And
this has to be a turning point for the 87,000 people and
professionals here at United. And it is my mission to make sure
that we make the changes needed to provide our customers with
the highest levels of service, of course, that you come to
expect--reliability, but also, a deep sense of respect and
trust and dignity.
Our report announced several immediate and some long-term
changes that will, at first, completely prevent an issue like
this from ever happening again, and, second, improve the
overall United experience, not just today, but into the future.
For example, unless safety or security is an issue, we will
never again ask a customer to give up their seat, once they are
on board. Simple common sense. Or, ask law enforcement to
remove a customer from a flight.
Second, we have already taken, as we constantly do, a
relook and a reevaluation of our overbooking policies. Although
that wasn't a factor necessarily in this case, it is something
that we chose to reevaluate. And so we have reduced it.
And, if faced with an overbook situation, which will indeed
occur in certain instances for many, many factors, we will
identify volunteers earlier, when we can, and, more
importantly, offer incentives up to $10,000. Because, again,
common sense says that you can't stop at a number. If no one is
moving in their seat, you have to give them something more.
And, even more importantly, offer them options for travel on
top of that. And that is the combination of things that we do.
And, of course, we are not going to move our own crew, our
own folks around, unless--schedule those 60 minutes before
departure, so we don't have the same situation that happened.
And then, as an additional policy review that really had
nothing to do with a particular incident, we have eliminated
the redtape around permanently lost bags, by instituting a no-
questions-asked, $1,500 reimbursement for permanently lost
luggage.
And later this year we will roll out a new app on our
phones that will give front-line employees the ability to
compensate customers proactively when service disruptions
occur.
If we break it, it is incumbent upon us to fix it. And that
is the intent of the work that we are doing.
So these changes are just a start, we understand that. I
also know we need to do a better job of solving problems in the
moment, and making travel smoother and easier for our customers
when challenges arise. And challenges often arise, some beyond
our control, some well within our control. But it is incumbent
upon us to solve those as best as possible.
When I became CEO 18 months ago, I promised we would make
United the best airline, not only for our customers to fly, but
for our employees to work with. I said it because I believe in
this company, a company that has been in business since the
earliest days of aviation. That is almost a century of flying.
In fact, at this very moment there are 600 to 700 United
planes in the air, carrying hundreds of thousands of people all
over the world. And before the day is done, we will take off
and land almost 4,500 times. And by the end of this year, we
will carry 86 million people to 53 countries around the globe.
It has become routine to be in Washington today and in
China tomorrow. Our United team, along with many of us in the
industry, have truly made that extraordinary feat of moving
around the world, we have made it ordinary and routine. And we
had a horrible failure 3 weeks ago. It is not who we are, it is
not this company. And, frankly, it is not this industry. It is
the--we have many, many successes. And it is important to note
that too.
But we are here to discuss certain issues that won't happen
again. So we will work incredibly hard to re-earn not your
business, necessarily, but your trust, because that is the most
important thing that we have for our customers all around the
world.
And more importantly, as we have proven over the course of
the last week, our actions will speak definitely louder than
our words. We will do better.
And so, I thank you. And Scott and I look forward to
answering any questions you may have. Thank you, sir.
Mr. Shuster. Thank you, Mr. Munoz.
Mr. Sprague?
Mr. Sprague. Good morning, Chairman Shuster, Ranking Member
DeFazio, Chairman LoBiondo, Ranking Member Larsen, and members
of the committee. My name is Joe Sprague, and I am senior vice
president of external relations for Alaska Airlines.
Alaska Airlines is the fifth largest U.S. airline. We have
a workforce of 19,000 employees, 280 aircraft, and 1,200 daily
departures. While we have grown considerably over the last 10
years, we are still small, by airline standards. The four
largest airlines represent 85 percent of the U.S. domestic
capacity, while Alaska is just 7 percent. We fill a niche role
in the industry. While we are an 85-year-old company, we have a
low-cost, low-fare business model, yet offer a premium service
product to our guests.
We know this hearing is driven by a desire to explore U.S.
airline customer service policies in light of certain recent
incidents. This has been a tough few weeks for the airline
industry, and the team at Alaska acknowledges our colleagues at
United and other airlines for their policy changes and other
efforts to quickly respond to these situations.
For our part, Alaska is actively reviewing sensitive
customer policies, such as overbooking, and it is our intention
to further improve the experience for our guests.
Alaska's relative small size requires us to have a laser-
like focus on customer service, as we compete every day for
each of our guests. Our stated purpose is creating an airline
people love, which we view as an ongoing process of
improvement. We are continuously implementing service
enhancements to improve our guests' in-flight experience,
including the recent launching of premium class, the enhancing
of in-flight entertainment and conductivity options, and
upgrading our food and beverage service.
However, it is the caring service our people deliver that
is key to us winning guests, along with any accolades we may
receive. And our formal company value of being kind-hearted
serves as an important guide. We have been humbled to receive
recognition for our customer service, including receiving the
J.D. Power award for highest in customer satisfaction for 9
years in a row, as well as just recently earning the number one
ranking in the annual airline quality rating.
While we are proud of these accomplishments, we know the
strong competition we face every day from our fellow U.S.
airlines requires us to constantly up our game. The airline
business is not only highly competitive, but also extremely
complex. This means comprehensive policies and procedures are
necessary.
At Alaska Airlines, we also have a focus on empowering our
employees to use their judgment to make exceptions to policies
and procedures to ensure our guests have the most positive
experience possible. Our smaller size gives us the ability to
be somewhat nimble in this area.
All of Alaska's customer-facing employees, over 8,500 of
them, have attended a day-and-a-half-long training session
called Beyond Service, which is specifically designed to give
them the tools they need to execute on our high-service
standards. This training is refreshed annually, and
incorporated into new-hire training courses.
In addition, all our customer-facing employees are given
what we call an empowerment toolkit, enabling them to provide
additional compensation, including miles or discounts, on the
spot to resolve customer service issues. Our airport customer
service agents have recently been outfitted with mobile devices
to better assist customers, and our empowerment toolkit is a
key app on these devices.
One area where sound policies and good judgment is
certainly needed is in the denied board environment. At Alaska
Airlines, denied boarding events are very rare. In 2016, only
.4 guests per 10,000 boarded were faced with an involuntary
denied boarding, a rate of just .004 percent. While this
positions us as one of the better performers in this area, we
believe even this is too high. We are actively looking at our
policies to see what we can do to bring this number down
further.
For example, in a denied board situation, we are updating
our policies to make it explicit that our customer service
agents are empowered to do the right thing for our guests,
including having discretion over compensation, with the
overriding goal to provide the incentives needed so as not to
adversely impact our guests.
At Alaska Airlines, we view the airline business as
fundamentally a people business. If we have angry customers, no
one wins. This is not to say that mistakes and anomalies do not
sometimes arise, and every airline is vulnerable to that,
including us. But it has been our experience that such mistakes
become lessons that carriers use to improve and, where
necessary, implement changes to policies and procedures
affecting customers. I believe this is on display with the
airlines represented here today.
Thank you for the opportunity to present Alaska Airlines'
views, and I would be pleased to answer any questions the
committee may have.
Mr. Shuster. Thank you very much, Mr. Sprague.
And, Mr. Jordan, you may proceed.
Mr. Jordan. Thank you. And good morning, Chairman Shuster,
Congressman DeFazio, and the other members of the committee. My
name is Bob Jordan. I am the chief commercial officer at
Southwest Airlines, and I have been there nearly 30 years. A
lot of that time I have had the chance to work on the customer
experience, so hopefully I can be helpful today.
You all know the history of Southwest Airlines. We started
in 1971, serving the Texas Triangle: Dallas, Houston, and San
Antonio. And we have grown to be the largest domestic carrier
in the U.S. today, serving over 120 million customers a year.
We have about 54,000 Southwest Warriors. We have an unblemished
history with our employees, which is a 46-year record of no
furloughs, no layoffs. And I think what I am actually most
proud of is that we have, for 43 years, provided profit-sharing
for our employees, which includes a $586 million profit-sharing
payment to our employees here in this past year.
One of the basic principles of Southwest Airlines comes
from our founder, Herb, who many of you know. And it is pretty
simple. It is if you treat your employees right, they will, in
turn, treat your customers right. It is also important to know
that, while this hearing is about customer service, our
employees, particularly at the airports, have very tough jobs.
And they are critical, not just to providing customer service,
but to providing a safe and reliable operation every single
day.
Another key principle at Southwest is our purpose
statement, which is pretty basic, as well. It is to connect
people to what is important in their lives through friendly,
reliable, and low-cost air travel. And we have invested in that
a lot in the last couple of years, and I think made
improvements. And one of those big investments is a very
intense program around hospitality, and training our employees
on hospitality, and generally, just how to be more civil with
each other, and how to be more civil with our customers.
But at the same time, I appreciate the fact that our
company is not perfect, and we make mistakes. There is always
room for improvement. And, as Herb likes to say--and a lot of
you know Herb--please never rest on your laurels. Because, if
you do, you will simply get a thorn up your ass.
So, with that in mind, and with the need to constantly make
improvements, we have announced that, beginning May 8th,
Southwest will no longer overbook flights. That decision is the
result of a bunch of factors. Some of those are unique to
Southwest Airlines. And I will just tell you what those are
very quickly.
First, compared to others, we have historically had a
comparably high no-show rate. That is really because we have
very flexible policies. We allow customers to change their
flights, cancel their flights without a fee. And so you have
more no-shows. That no-show rate has come down considerably
over the years, though, as we have had better improvements in
technology.
And then, second, we made a change where we simply asked
customers who are not going to travel to please call and cancel
that flight before they board the aircraft. They can cancel as
late as boarding, and then they receive the ability just to
reuse those funds without any kind of change or fee.
Second, we are conducting a major upgrade to our
reservation system, which is the largest system that any
carrier uses. And the final components to that go into place on
May the 9th. It is, by far, the most ambitious technical
project we have ever undertaken at Southwest Airlines. And the
implementation of that new reservation system gives us better
data and better forecasting techniques, so we can predict
better who is going to show up for a flight.
And finally, I will be honest. While we have been looking
at this issue for many years, the recent events related to
overbooking did cause us to stop and pause and take a look at
this again. It just gave us another reason to review, and
another reason to go ahead and move forward with this change
today.
And, simply put, discontinuing the practice of overbooking
is completely consistent with our other customer-friendly
policies like bags fly free, no change fees, no cancel fees,
points that never expire, award seats on every single flight,
every single day, so that we think that it fits perfectly with
our brand.
Now, it is important to note that we will still have
oversells on a very small number of flights on occasion for
operational reasons. Weather, you have weight and balance
restrictions, we may have downgrades, or an aircraft that was
175 seats, gets downgraded to an aircraft that is 143 seats.
But we expect those to be very rare. And again, we will no
longer overbook as part of the selling process.
And, most importantly to note, I expect our denied
boardings to go down by 80 percent as a result of this policy
change. And, to date, denied boardings are very small. About
.01 percent of every passenger that flies Southwest Airlines is
affected by a denied boarding. And again, I expect that number
to go down by 80 percent as a result of that policy change.
So, in conclusion, I wanted to thank you for inviting us
here today. And I would be happy to take questions, as well.
So thank you so much.
Mr. Shuster. Thank you very much, Mr. Jordan.
With that, Ms. Philipovitch, you may proceed.
Ms. Philipovitch. Good morning, Chairman Shuster, Ranking
Member DeFazio, and distinguished members of the committee. My
name is Kerry Philipovitch, and I am senior vice president of
customer experience at American Airlines. Thank you for
inviting me to talk with you today about American Airlines'
focus on improving customer service.
American Airlines is a global airline operating nearly
7,000 daily flights to 350 destinations in 50 countries. Our
mission is to validate the trust placed in us by our customers,
team members, and other stakeholders.
There is no question that travel can be stressful, and
disruptions will occur. When they do, we first deliver a
resolution to our customers. We commit to finding the root
cause, and we incorporate those learnings quickly. It is this
process that leads to continuous improvement at American
Airlines.
We work in a business that relies on people serving people.
And, with 120,000 team members who are spread around the globe,
it will be difficult to avoid inconsistencies and occasionally
falling short.
On April 21st, an incident occurred on an American Airlines
flight from San Francisco to Dallas-Fort Worth that involved
one of our team members and a customer traveling with small
children. Clearly, what happened was wrong, and we promptly
apologized to the customers involved. Our immediate focus was
on ensuring our customer and her children were cared for during
the remainder of their trip. We issued a prompt public apology,
and reinforced that this incident did not reflect the values of
our company and team members, or how we care for our customers.
We removed the team member in question from service to further
investigate the situation.
Situations like this are an outlier, but it is important
for American to take responsibility when we don't handle things
well, and we accept that responsibility completely.
Recent incidents have been interpreted by some as evidence
that customer service is broken in the airline industry. There
is no question that we can do better, but we are making
progress. Overall, airline customer satisfaction increased in
2016, reaching an all-time high in the J.D. Power airline
ratings, and tying the record in the 2016 American customer
satisfaction index travel report. In fact, industry ratings in
both reports have improved each year since 2012.
On the other side of decades of turmoil, we have been hard
at work to enhance our customers' experience, and we are seeing
the results of our front-line team members' hard work to
improve the reliability of our operation. American delivered
our best-ever performance this year for mainland flights
departing on time, arriving on time, and our lowest rates of
mishandled baggage. Running a reliable operation is the
foundation for delivering the experience that our customers
deserve.
Today the U.S. airline industry is stable, the safest in
the world, reliable, competitive, and, most importantly, widely
accessible. This is an intensely competitive industry, with
carriers offering different prices, products, and service. This
competition is good for consumers. Adjusted for inflation, the
average cost of an airline ticket has decreased by more than 24
percent since 1995.
At the same time, we are also making significant
investments to improve customer experience. At American, we
take delivery of a new aircraft, on average, every 4 days. We
are devoting nearly $3 billion in investing to make the travel
experience more comfortable and more convenient. And we have
$17 billion in capital improvement projects underway at
multiple airports in which we operate. This includes a new
regional terminal here, at Washington Reagan National Airport,
so we can, once and for all, retire the dreaded gate 35X.
[Applause.]
Ms. Philipovitch. Other events have drawn concern about
customer impacts from overbooking flights. Given the frequency
with which travelers adjust their plans, overbooking avoids
empty seats in a congested air traffic system, allowing more
people to fly, and greater availability of lower fares. An
oversale situation occurs when more confirmed passengers arrive
at the gate than the number of seats on the aircraft. More than
50 percent of oversales are driven not by overbooking, but by
operational and safety factors, like equipment swaps, weather-
driven weight restrictions, and accommodating Federal air
marshals.
In light of recent events, American has added the following
initiatives to our efforts to improve customer experience.
First, we committed that we will not involuntarily remove a
customer who has already boarded the aircraft to accommodate
another passenger.
Second, we have increased the number of employees who
monitor oversales and work to solicit volunteers prior to
customers arriving at the airport. New procedures are already
showing a reduction to the previous low numbers of involuntary
denied boardings, as we work to bring that number closer to
zero.
Third, there is now a dedicated hotline into our day-of-
departure support desk, so our gate agents can offer the
compensation necessary to entice customers to volunteer. We
have not established an upper limit on what we will pay to
solicit volunteers, but have entrusted our team to make the
best decisions to serve our customers.
Lastly, we are adding training for our customer-facing team
members to strengthen their abilities to avoid and de-escalate
contentious situations in real time.
This is a time of great optimism at American Airlines and
for air travel in our country. American is committed to
validating the trust our customers, team members, and
stakeholders place in us each day. We look forward to our
continued work together to make this economic engine of our
country all that it can be, so Americans everywhere have the
choice to travel affordably, safely, and comfortably.
I appreciate the chance to be here, and I am pleased to
answer any questions you have.
Mr. Shuster. Thank you very much.
And with that, Mr. McGee, you may proceed.
Mr. McGee. Good morning, Chairman Shuster, Ranking Member
DeFazio, Chairman LoBiondo, and Ranking Member Larsen, and all
committee members. On behalf of Consumers Union, the policy arm
of Consumer Reports, thank you for the opportunity to speak
today regarding the concerns of millions of American air
travelers.
The abusive treatment of Dr. David Dao on board United
Express last month shocked us all, and exemplified that
consumers are at the mercy of powerful airlines in an ever more
concentrated industry.
American consumers are very much aware that Dr. Dao's fate
could all too easily have been their own. This incident, and
other recent media reports, has regalvanized Congress, and we
applaud this committee for calling this hearing.
The major airlines may boast of investing millions into
their operations, but a closer examination reveals those
investments often focus on amenities and perks for the few who
can afford to pay more to fly in premium classes, while the
overwhelming bulk of passengers in economy are subjected to
packed cabins, tight seats, new and higher add-on fees, and,
all too often, an utter lack of respect.
We hope the committee will take this opportunity not only
to address overbooking and denied boarding, but to take a
broader look at the one-sided contracts of carriage that give
all rights to airlines, and precious few rights to passengers.
Dr. Dao's mistreatment highlights one aspect of passenger
rights that is badly in need of reining in: airlines
overbooking flights, and then not having seats for all
passengers who bought tickets. This practice is a throw-back to
the 1950s, when passengers could make multiple alternative
bookings without penalty. But since deregulation in 1978, four
key factors have emerged.
One, no-show passengers today are penalized, either with
high fees or the forfeiture of their tickets.
Two, state-of-the-art yield management systems allow
airlines to closely manage selling all available seats.
Three, the demise of once-ubiquitous interline agreements
that allowed bumped passengers to be accommodated on rival
carriers.
And four, record-high passenger loads, historically in the
50 to 60 percentile range, now average in the low 80s, and
regularly reach 100 percent.
We are not aware of other industries in America where the
business is given this kind of free license to oversell the
product, with so little accountability for failing to deliver.
Last year, domestic carriers bumped 40,629 passengers against
their will. Airline executives may tell you this is a small
percentage, but they were bumped without explanation, based on
criteria known only to the airline, and missed family events,
business meetings, vacations.
United and other carriers announced changes to their
policies, but we believe that all denied boardings should truly
be voluntary. The airline should pay whatever compensation is
necessary to convince a passenger to willingly give up a seat
for any reason.
Airline industry consolidation, and most particularly the
mega-mergers since 2008 of Delta-Northwest, United-Continental,
and American-US Airways, has hurt consumers and entire
communities. The harmful effects of this consolidation have
come home to roost in numerous ways. A lack of competition and
consumer choice allows carriers to disregard the interests and
concerns of their passengers in ways that would have been
unthinkable when there were 12 or 10 or even 8 major airlines
in the United States.
Compounding the harmful effects of industry concentration,
passenger protections are further compromised because the
Airline Deregulation Act preempted State consumer protection
laws. The intent was to keep States from reimposing economic
regulation. But consumers do not have the right of action to
sue, and courts cited the Federal preemption clause in striking
down New York State's 2007 airline passenger bill of rights.
It has also become more difficult for consumers to
determine the true cost of flying. Basic services, such as
checking baggage, selecting seats, changing flight
reservations, even carrying on a small bag, in some cases, are
subject to higher and higher fees. This means it is no longer
possible to make accurate, apples-to-apples comparisons to
previous airfares.
We are calling for a consistent, uniform, comprehensive,
clearly written set of passenger rights for U.S. airlines. What
we cannot do is continue to leave it to the airlines to decide
what rights they will confer in their contracts of carriage,
which, as Consumer Reports has documented over the years, are
lengthy, filled with legal jargon, and where the priority is to
protect the airline, not its passengers, and is subject to
change whenever it suits the airline.
Here is an example taken from Delta's contract of carriage:
``Delta's published schedules are not guaranteed, and form no
part of this contract. Delta may substitute alternate carriers
or aircraft, delay or cancel flights, change seat assignments,
and alter or omit stopping places shown on the ticket at any
time. Schedules are subject to change without notice.''
And here are some of the passenger protections we endorse:
clear and consistent guidelines for compensation for flight
delays of varying length; clear and consistent guidelines for
compensation for flight cancellations; clear and consistent
guidelines for mishandled baggage; clear and consistent
guidelines for compensation for voluntary relinquishment of a
ticketed seat, and a clear prohibition on involuntary
relinquishment.
Complete airfare transparency, including all taxes and
surcharges, and all possible ancillary fees from the airlines,
equally available in all booking channels, online and offline,
whether offered directly by the airlines themselves, or offered
through third parties.
Enforcement of minimum seat standards, to ensure reasonable
passenger comfort. Address health concerns, including the risk
of deep vein thrombosis. And promote safety, including adequate
space for effective evacuation.
Much has happened in the nearly four decades since passage
of the Airline Deregulation Act. But some of the key promises
of deregulation, especially enhanced competition and improved
customer experience, have not been realized. These disturbing
incidents of passenger mistreatment have made clear we need to
start a conversation immediately.
I will be happy to answer any questions you may have. Thank
you very much.
Mr. Shuster. Thank you, Mr. McGee. Now we will proceed to
questioning.
Members will have 5 minutes to ask their questions, and we
will stay pretty close--not pretty close; we will stay very
close to the 5-minute timeframe on the questioning. So I would
ask all of our Members to respect that, and watch the clock.
And I will begin by questioning.
I truly believe that what happened over these past couple
of incidents deals with empowering the employees. And I look at
everything through the prism of 20 years in business, myself.
And many times situations would occur. My employees, hopefully,
with the proper training, the proper policies in place, they
would make the right decision. But occasionally they didn't,
but we always stood by those decisions, and making sure that
the customer was taken first was always paramount.
And as I said, I believe that to empower your employees,
you have to have clear policies in place, so they understand
what is expected. And they have to be trained, trained so that
they can develop the judgment.
So, I am interested in hearing from Mr. Munoz and from Ms.
Philipovitch, since--two situations that occurred most
recently--what are you doing to make sure that your employees
are empowered, specifically?
Mr. Munoz, why don't you start?
Mr. Munoz. Sure. Our curriculum for customer service and
training and dealing with de-escalation issues is something we
have to strengthen. I think we do it when you are first hired,
but we don't do it on a recurring basis. So there is lots to
learn from some of the other folks at this table.
Specifically on the empowerment angle is, beyond the
empowerment at the point of a situation like we were faced with
on April 9th, I think it is incumbent on us to put policies and
practices and protocols that inhibit or prohibit us ever
getting into a situation like that. It is an impossible
situation, when you put folks in that kind of state. And no
rules, no empowerment, no training can deal with that.
So it is important to go back in the chain, which is the
policies that we have implemented, to say we are not going to
de-board someone if they have already been--we are not going to
allow law enforcement--we are going to reduce overbooking,
although that wasn't a factor in this particular case.
So, for us, there is training and curriculum. We will
continue to do that and learn from others at this table. But,
most importantly, it is important to--you know, it is the start
of the chain, you know, just not create these impossible
situations for people that there is no out.
Mr. Shuster. Ms. Philipovitch?
Ms. Philipovitch. Yes. I would agree with Mr. Munoz. And we
know that it is the responsibility of airline leadership to
make sure that our employees have the proper tools, training,
resources, and support to deliver the kind of customer service
that they are so good at doing, and that they want to do every
day.
We recently launched a service training initiative for
front-line team members called Elevate the Everyday Experience.
It is a 2-day program. And, by this summer, over 40,000 of our
team members will have completed the cross-functional
experiential learning course that we are very excited about.
In light of recent events, and also based on feedback from
our employees, we are working to enhance that curriculum to
further support our employees with training on de-escalating
complicated situations, and to provide kind of interim training
between those sessions, as well. So we are looking forward to
that and, again, want to make sure our employees have the
support and the tools that they need.
Mr. Shuster. Well, thank you. Second question, it is on
overbooking. I think I basically understand the overbooking
situation, but I know there are refundable and nonrefundable
tickets. And it has been my experience in business, if somebody
buys a product and it is--they paid for it, they get it.
So can you explain to me the difference how refundable and
nonrefundable customers are treated when it comes to not
putting them on a flight, refunding their dollars, those kinds
of things?
Mr. Munoz, if you would.
Mr. Munoz. Sure. There are many practices and procedures.
And one of the reasons Mr. Kirby is with me today, he has been
in this industry for 20 years, and is widely recognized as an
expert in this field. And I thought this committee deserved a
more exacting knowledge base.
And so, if I could----
Mr. Shuster. Sure, absolutely.
Mr. Kirby. Thank you, Chairman Shuster. As we have talked
about, the incident on United was not driven by overbooking,
but overbooking is much in the news about this. And it is
important to understand that most of our oversale situations
are driven by operational restrictions, the largest being
weight restrictions because of weather.
So, for example, when you are at an airport and there is
snow or ice, or even wind and weather, at either the departure
or arrival airport, we are often not able to take a full load
of customers and meet our safety parameters. And in those
situations, we will have to deplane 20, 30 people, sometimes,
because the aircraft simply can't operate safely. That is the
vast majority of our oversale situations.
As to overbooking, we also use it to actually take care of
thousands of customers who we otherwise couldn't accommodate.
Just this past weekend we had an incident in Mumbai, where an
engine went out of service on landing, and we were going to
have to replace the engine, which takes a while in India, to
get the engine replaced. So we had to cancel the return flight.
We reaccommodated a couple of hundred customers on other
airlines. But because there were so many, we had customers
still to deal with. We overbooked the following day's flight by
48 customers, because that was the only seats that we had.
Otherwise, we were telling those customers we couldn't get them
home for 5 days. We were able to accommodate 25 customers the
next day, and the other 23 we were able to voluntarily give
them compensation to take a flight the next day.
But it is an example where overbooking actually helped us
take care of our customers. And at United, the vast majority of
our involuntary denied boardings are driven by these
operational restrictions, as opposed to overbooking. And we
view overbooking, if we are particularly in situations where we
can incentivize a customer to take an alternative flight, as a
win-win for both the airline and for those customers.
And 96 percent of the situations where we have overbooking,
we are able to get the customers to be volunteers. And in
today's world, where we have increased the compensation limit
to $10,000, we are hoping to drive that down to, essentially,
zero. So we view overbooking as something that actually helps
us accommodate and take care of thousands more customers than
we would otherwise be able to.
Mr. Shuster. I thank you very much, Mr. Kirby. I have
exceeded my time, I am going to stay on message of the 5
minutes, but I wish you could in writing explain to me the
refundable, nonrefundable tickets, and what the difference is
in writing. That would be fine.
Mr. Kirby. Yes, sir. We will.
Mr. Shuster. With that, I recognize Mr. DeFazio for 5
minutes.
Mr. DeFazio. Thank you, Mr. Chairman. I will try and do
this very quickly. We don't have much time.
First, to United, American, and Alaska, how much does it
cost you to change someone's booking? Give me a number. I mean
you are charging people $200, $300 to change a ticket. What is
your real cost? And it seems like it really shouldn't--you are
really inefficient, if it costs that much.
Mr. Kirby. Well, sir, the cost is not about the actual
changing the ticket. I don't know what the actual changing of
the ticket costs.
Mr. DeFazio. OK. So then it is about being very profitable.
I would observe that United got $800 million in change fees
last year, $800 million. That is a lot of money.
Mr. Kirby. Sir, the----
Mr. DeFazio. And there is no real cost? I mean I realize--
you said--and let's go back to--well, first, how about--can you
answer? Southwest does not do this, so can American answer? How
much does it cost to change someone's ticket?
Ms. Philipovitch. I would agree with Mr. Kirby. The cost is
not about the processing----
Mr. DeFazio. Right, it is for your operational concerns so
you can get----
Ms. Philipovitch [continuing]. It is about holding it in
inventory----
Mr. DeFazio [continuing]. So you can get the planes
absolutely full, or sell more than 100 percent of the seats.
OK, let's go to overbooking. On overbooking--now,
Southwest, are you going to go broke, or something? I mean you
are not going to overbook anymore? How can you do that? Quick
answer.
Mr. Jordan. We are not going to go broke, I promise you
that.
Mr. DeFazio. OK.
Mr. Jordan. So what happened, it is really basic. There are
a couple of reasons that cause you the need to overbook. We
have no-shows.
Mr. DeFazio. Right.
Mr. Jordan. The no-shows at Southwest have come down
materially over the years as we have had better technology.
Mr. DeFazio. Right, sure.
Mr. Jordan. We actually have more no-shows than most,
because we have very flexible rules, no change fees, no cancel
fees----
Mr. DeFazio. OK, OK.
Mr. Jordan. So those have come down.
And then, second, we have just improved our technology to
really understand who is going to show at the aircraft.
And then, third, we did implement a pretty modest change,
which is allowing----
Mr. DeFazio. OK, I have only got 5 minutes.
Mr. Jordan. OK----
Mr. DeFazio. So I got it.
OK, Mr. McGee, do you want to comment on the practice of
overbooking? You said it was 1950s, 1960s, because in those
days you didn't get charged--you weren't making $800 million on
change fees.
Mr. McGee. Exactly. At that time it was a burden for
airlines, because business travelers, in particular, used to
book five flights at once, and get one of them. And then those
seats went empty. But for all the reasons that I detailed,
which I don't want to repeat for time's sake, it is clear that
that time has passed. And all of the language in the contracts,
as I stated, favor the airlines here.
If you are delayed getting to the airport because your taxi
driver had an accident, and you have a nonrefundable ticket,
you are out, regardless. There is no provision in the contract
that accommodates for your circumstances. But yet there is a
long list of accommodations for circumstances for the airline,
or what they term ``force majeure,'' acts of God, which, in
some cases, are, in fact, not acts of God.
Mr. DeFazio. Right. OK, thank you. So, back to Mr. Kirby.
You said that, you know, you talked about how you can use
overbooking to help people. How about just a policy that in
routine reservations you would never, ever overbook, you would
never sell more than 100 percent of the seats for routine, day-
to-day booking? Not to accommodate people because of a change
of plane, or something else, but just on a day-to-day basis?
Could you do that?
Mr. Kirby. Well, sir, we----
Mr. DeFazio. I mean Southwest is doing that.
Mr. Kirby. Well, sir, we still think that that helps us
accommodate thousands----
Mr. DeFazio. Yes, but it also helps you make--you know, get
to these load factors and then, of course, you have your change
fees.
Let's go to contracts of carriage. How about a simple
disclosure? I mean this is United's contract of carriage [holds
up a document]. This is just for fares [holds up a document].
And if you look at the print, here [holds up a document], very
user-friendly online. Supposed to read this before you buy your
ticket.
So how about a--you know, distilled-down, simple-language
disclosure? Would any of the airlines agree to do that, post
that, make it available to people? I see Mr. Sprague nodding
his head.
Mr. Sprague. Yes, we would acknowledge ours is too long. We
recently acquired Virgin America Airlines. We found theirs to
be much shorter. As part of our integration, we are going to
move to a much shorter, and more efficient contract of
carriage.
Mr. DeFazio. Right, theirs is 20 pages, 8,000 words. Yours
was 67,037 words. United was 37,000 words with smaller print on
only 46 pages, but I don't think that counts, because it
doesn't make it much more user-friendly.
One other question. You know, as we observed, there is a
lot of tension. The planes, you are jamming more people in. And
yet, you know, is there a question about how many flight
attendants there should be on planes, as opposed to the FAA
requirement?
Because they are being asked, essentially, to referee and
do all sorts of things, and we have got terrorism--I mean
everything has changed. But the number of flight attendants
hasn't changed, as required by the FAA for--per passenger for
20 years or so. Anybody think that maybe we are overstressing
our flight attendants?
Mr. McGee, you want to answer?
Mr. McGee. Yes. There has been a lot of talk today about
employees, and the term is used, and it has been used multiple
times. But I think an important point here is that this is an
industry that has massively outsourced so many functions,
including functions that interface with the public.
So I am not sure that many passengers are even aware that
when they check in, or when they are speaking to a customer
service agent--in fact, in many cases they are wearing a
uniform of an airline, and they have a name tag from an
airline, but they are outsourced. And what this means for
passengers is that--and in no way are we denigrating the work
of the people looking for jobs, but the fact is they are poorly
trained, it is a transient workforce, and the airlines have
outsourced just about everything that the FAA will allow in
outsourcing. We are not here today to talk about aircraft
maintenance, but that is one area that affects safety.
Mr. DeFazio. Thank you, Mr. Chairman.
Mr. Shuster. Thank you. Mr. Duncan is recognized for 5
minutes.
Mr. Duncan. Thank you, Mr. Chairman. Just yesterday morning
at the Knoxville Airport, the plane we were supposed to fly on
to Washington--a wing clipped a baggage truck with--damage that
you couldn't even notice, but we spent 3\1/2\ hours there. They
had trouble getting ahold of the proper person that--the
manufacturer is in Brazil. And then they canceled the plane.
And it caused me to miss votes last night, and I hate to miss
votes.
But I tell you this just to tell you that I have flown so
much over the years that I have run into almost every kind of
problem that you can think of. Yet I will tell you that we have
the best aviation system in the entire world. You know, my dad
told me years ago, he said, ``Everything looks easy from a
distance.'' But you all have a very tough business. But I think
what happens, when people have 99 good flights and 1 bad one,
the one they tell everybody about is the 1 bad one.
I am so thankful. I heard on NPR many years ago that the
Russian Aeroflot system sometimes had delays as long as 4 days.
I mean we get upset with a 40-minute delay. So I appreciate
what you do for us.
Let me ask you this, Mr. Munoz. Before this unfortunate
incident with Dr. Dao, did your airline ever call law
enforcement to remove somebody due to overbooking before that
incident?
Mr. Munoz. There have been a good amount of occasions where
that has happened. It happened without incident.
Mr. Duncan. Where you had to call law enforcement due to
overbooking?
Mr. Munoz. We call law enforcement for safety and security
reasons when they happen. There have been occurrences in the
past in this year where we have had to ask law enforcement to
come in and help and assist.
Mr. Duncan. Have any other airlines had law enforcement
remove people from their airline, due to overbooking?
[No response.]
Mr. Duncan. Have you ever done that, that you know of, Mr.
Jordan?
Mr. Jordan. No, sir, not that I know of. Again, I agree
with Oscar. It is primarily in the cases of just safety and
security, where you have potentially an intoxicated passenger,
an altercation----
Mr. Duncan. Well, I mean, if it is a disruptive person with
law enforcement, that is a different situation.
Mr. Jordan. Yes, sir. But in the case of a----
Mr. Duncan. I am talking about due to overbooking.
Mr. Jordan. In the case of an overbooking, not that I know
of, sir.
Mr. Duncan. We were given statistics. There is something
called the Airline Quality Rating that said that involuntarily
denied boardings affected 6 passengers per 100,000. And I
noticed that Mr. McGee's testimony, he said that it is 40,000,
or a little over 40,000 out of the almost 700 million
passengers. That comes to 1 for every 17,500, roughly. It seems
to me that is a pretty low--that is a pretty impressive figure.
We also were submitted information from another airline
that is not here that said that overbooking has been done as
one of the many ways that ticket prices are held lower. Is that
correct, Mr. Sprague?
Mr. Sprague. Yes, Congressman Duncan, that is correct. In
fact, for Alaska Airlines, in 2016 alone, there were 675,000
seats that would not have been available if we did not have an
overbooking policy. So those are seats that would not have been
available for last-minute business travel purchases, for
accommodating guests that might have been disrupted, due to
weather or downsized aircraft. And, frankly, having those
additional seats available for sale allows us to keep fares
low.
Mr. Duncan. So more people are able to fly at lower prices
because of overbooking.
Mr. Sprague. Yes, sir.
Mr. Duncan. Is that true? Would you agree with that, Mr.
Kirby?
Mr. Kirby. Yes, sir.
Mr. Duncan. All right. All right. Well, thank you very
much.
Mr. Shuster. I thank the gentleman. And, with that, Ms.
Norton is recognized for 5 minutes.
Ms. Norton. Thank you very much, Mr. Chairman. I know you
must have received messages from a number of us after the first
incident about the need for more oversight by this committee of
the customer service part of what the airlines do for us, as a
Nation.
I want to say to our witnesses you may think you are
looking at Members of Congress, but really, you are looking at
your customer base. Except for a few of us--perhaps me, chiefly
among them, because I represent the people who live in the
Nation's Capital--most Members of Congress get on an airplane
every single week. They are frequent fliers who conduct weekly
monitoring of the airline industry. I can't imagine why we
haven't had a hearing like this, based on what my colleagues
have to go through.
Now, when it comes to business in the United States, I
expect and have seen competition solve most of our problems.
But, essentially, you represent four regional monopolies. So
you have been able to do anything you want to do: add on fees,
basic services that we take for granted. It is as if you have
to tip a corporation to get a business to do what they used to
do for free, as a courtesy.
So, over time, we do have such hearings as this, and people
come up with notions--well, we have to have a passenger bill of
rights, or whatever. Mr. DeFazio, our ranking member--in 1987,
no less--entered a document that didn't pass. But Ray LaHood,
the U.S. Transportation Secretary--because this could be done
by the administrative process, as well--indeed was successful
in getting through that process. Rules having to do, for
example, with lost baggage.
So, what we have here, essentially, are a passenger's bill
of rights. Each of you have a contract. We have learned that,
you know, you can find out what it is if you go on the website,
or if you--you can look at the tens and tens of pages. I want
to clarify whether--I believe was the response to Mr. DeFazio.
Are each of the airlines here willing to boil down what the
customer is entitled to to a one-pager that the passenger could
receive, as part of getting on the flight, or could find by
going to the website? Could I have answers from each of the
airlines?
[No response.]
Ms. Norton. I only have 5 minutes. Speak up first, Mr.
Munoz. Why point to him? Why not begin with you?
Mr. Munoz. That is a--it is an excellent question. I don't
know that I have the proper answer with regards to a one-page
document. I think simplification, clarity----
Ms. Norton. Mr. Kirby, do you think--since you--that that
could happen?
Mr. Kirby. Ma'am, I am not sure if we could get it to one
page, but I certainly think getting a simpler contract of
carriage----
Ms. Norton. Anybody else have people who can write, who can
boil this down to one page? Could we go down-- Mr. Sprague?
Mr. Sprague. That would be our goal, ma'am.
Ms. Norton. Sir?
Mr. Sprague. That would be our goal, ma'am.
Mr. Jordan. Congresswoman, absolutely. We would love to
continue to consolidate that.
I would tell you we also have a customer service commitment
document, which writes it in much simpler language. We already
have that on our website, that describes what Southwest
Airlines does. But the goal is to be completely transparent
with the customer about what is available to them in any case.
Ms. Philipovitch. And we at American have been working to
simplify our policies to make them clearer on our website for
our customers, and we would also like to strive for a more
simplified contract of carriage, and we have work underway for
that, as well.
Ms. Norton. Well, we are going to hold you all accountable
for that, and see who is best at doing something that you may
have learned to do in college, if you had good writing
instruction.
Mr. Jordan, do I understand that Southwest Airlines--
because this is my favorite way to do things in our country--
has found that, using incentives, you can indeed solve problems
that are otherwise solved by remedies such as overbooking? Your
incentivizing approach, where you say you brought down the
number of involuntaries where boarding does not occur?
Mr. Jordan. Yes, ma'am. Our goal, again, with this change--
and not overbooking as part of the selling process----
Ms. Norton. What was the incentive that was most important?
Mr. Jordan. The incentive was to eliminate this problem for
our customers, and, to some extent, for our employees.
Ms. Norton. No, that you gave so that you did not have to
overbook.
Mr. Jordan. Well, the----
Ms. Norton. To the customer, so you didn't have to
overbook.
Mr. Jordan. Well, actually, it is on the airlines, that we
have had better technology, those things that allow us to
eliminate this process because of the value to the airline has
simply gone down very, very much.
But it would be our incentive to have involuntary denied
boardings, in particular, be very, very rare. And it is also
our incentive--and we do this every day to make sure that our
employees are completely empowered to do what is right,
involuntary denied boarding or voluntary denied boarding, to do
what is right for our customers in the moment, so that we don't
have incidents that we shouldn't.
Mr. Shuster. I thank the gentleman. And I would just point
out I think these contracts of carriage are far too
complicated. And simplifying would be wonderful. But every
member on this committee should look at each other and say part
of the problem is us. Part of the problem is the overabundance
of attorneys in this country that are sue-happy, so a little
bit of tort reform may be able to let the industry--not just
this industry, but every industry, to simplify what they put
out there in contracts.
Because it is--again, I am not going to get into it right
now, but I am pretty sure it is driven by the damn lawsuits in
this country that go forward. And so we have got to--Congress
has to make sure we are simplifying the laws, so that we can
get 1-page, 2-page, 10-page documents on these contracts of
carriage.
So, with that, I recognize Mr. Crawford.
Mr. Crawford. Thank you, Mr. Chairman. You probably felt
the eyes of a lot of attorneys on you at that point in time.
[Laughter.]
Mr. Crawford. Mr. McGee, you touched on this in your
testimony--deregulation back in 1978.
I am a limited-government guy. I don't want the Government
to get involved to solve problems in a competitive marketplace.
But do you or any members on the panel--do you believe Congress
should reregulate the airline industry?
Mr. McGee. Consumers Union supported deregulation in 1978,
long before my time--I was in high school at the time. But we
have at no time in the 17 years I have been with Consumers
Union recommended reregulation. What we have said is that it is
clear that when you leave customer service up to the airlines
on many issues over the years--tarmac delays and other things--
they do not do what is best for their airlines. Excuse me, for
their customers.
And in answer to the congresswoman's question about simple
language and one page, actually, it is possible, to an extent,
because the model already exists in the European Union. For 12
years, there have been passenger rights easily accessible, easy
to read, one page, on the EU's website when you are traveling
in the EU----
Mr. Crawford. Let's let some of the other members weigh in
on this, just in the limited time that I have.
Ms. Philipovitch. We work in a very competitive industry,
and we know that customer service is essential to retaining our
customers. So that is our incentive to do better, and we will.
The DOT today also exercises broad oversight in regulating
airlines and protecting consumers, as well.
Mr. Crawford. OK. Mr. Jordan?
Mr. Jordan. While we are talking about very difficult
issues today, generally, the performance of the industry has
been very good. On Southwest's sake, our net promoter scores
are 11 points better in the last 2 years, our OTP is up 7
points, our bag rates----
Mr. Crawford. So that is a no on----
Mr. Jordan. Our bag rates are the best that they have been
in our history----
Mr. Crawford [continuing]. On reregulation?
Mr. Jordan. So no. No, sir.
Mr. Crawford. OK.
Mr. Sprague. No, sir. I have been with Alaska Airlines for
17 years. In that entire time, we have been competing hard
against the rest of the folks on the----
Mr. Crawford. Sir----
Mr. Sprague [continuing]. Panel here today. And that
competition has been our main motivation to improve our
customer service.
Mr. Crawford. Mr. Munoz?
Mr. Munoz. Agreed with most of those. So the answer for us
would be also no.
But my context and perspective is one--is having worked in
heavily regulated industries, both in telecom and other
transportation models in the railroad space, and having a
chance to see this over the last year, I think there is always
a delicate balance between the right things, as Mr. McGee
writes----
Mr. Crawford. I think that is right. And what we have heard
today sort of demonstrates kind of the line we are walking
here. And I don't want to jump in to a competitive model and
apply reregulation. But that means that the industry has to do
some self-regulation to demonstrate that you don't need
interference from Congress.
Mr. Munoz. I couldn't agree more. And it is shameful that
an event like the one that we had at United has to drive this
kind of conversation. But again, it will accelerate and, at
least from United's perspective--and you heard from others--
this will make us better.
Mr. Crawford. Let me ask you something. This was--Mr.
DeFazio touched on this, and it was--I could see that virtually
everybody in their chairs was uncomfortable, and the body
language was evident this is not a topic anybody wants to talk
about, but the change fees. And there is a relationship to
overbooking and change fees, is there not?
Mr. Kirby. Yes, sir. I mean we have change fees, and they
are mostly about our way of offering low fares to consumers.
Mr. Crawford. Sure.
Mr. Kirby. And they are about keeping our fares low. And,
as was referenced earlier today, you know, fares have declined
24 percent since--in the last 20 years, in real terms. One of
the great things about deregulation and about these kinds of
policies--overbooking and change fees--is that we have driven
prices lower for consumers, and there are more people traveling
in the United States than anywhere in the world.
Mr. Crawford. Ma'am, you--I could tell you had some things
you wanted to add when that conversation was taking place.
Would you like to expand on that a little bit?
Ms. Philipovitch. Sure. Thank you, sir. We strive to offer
different fare products to meet the needs of varying consumers.
And so, some customers will value flexibility and be willing to
pay more for an unrestricted ticket, while others really just
want the lowest fare. And that is why we sell a nonrefundable
product. Even though customers have agreed to a nonrefundable
product, the change fee is a way to allow some flexibility if
circumstances arise that they didn't anticipate.
Mr. Crawford. This sort of gets back to what we talked
about with full disclosure on what you can expect, as the
customer. And all of you all are competing. I love a
competitive model, because customer service generally thrives
in a competitive environment. But we are not seeing that today.
We have seen a sharp decline in the level of customer service
that is related to the amount of consolidation that has taken
place in the last 10, 12, 15 years. And I think that is
probably an experience we have all had at some point in time in
our air travels. Is that fair?
Mr. Munoz. I will take it. Initially, I have experienced a
lot of consolidation in my experiences over the history. And I
think the customer has an infinite amount--a greater choice
today than they have had in a long period of time.
And Scott, who has been in this industry for 20 years, has
been part of many integrations and consolidations, and could
probably share insights, as well.
Mr. Crawford. Well, my time has expired, but I appreciate
your comments.
Thank you, I yield back.
Mr. Shuster. I thank the gentleman. Ms. Johnson is
recognized for 5 minutes.
Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
Let me ask, I guess, in general, but most especially for
United.
First of all, it is clear that we have so much air traffic.
And the incident on April the 9th involving the forcible
removal of a passenger on board a United flight 3411 has
brought into question how airlines treat their passengers. And
this, really, is not a new issue. In 2016 the Department of
Transportation received 12,766 consumer complaints against U.S.
airlines. So it is impossible to say how many of these are
legitimate, illegitimate, how many other incidences weren't
reported.
But I guess what I need to ask first is what were the rules
in place to determine who would be removed from the plane?
Mr. Munoz. Thank you, ma'am. It was a simple, automatic
process that dealt with--without all the complexity--what
someone paid, and whether they were enrolled in our Mileage
Plus program. It is a difficult choice when we get to that
point. All of our policies that we have introduced are to
prevent this situation ever from happening, because it is an
impossible situation. How do you pick amongst all of you as to
who sits where? You have a process for where you sit, and we
have a process.
And so, specifically, the policy that we have and continue
to have is around the fare that you paid, and whether you are--
what level you were in our Mileage Plus program.
Ms. Johnson of Texas. So this fare was cheaper than the
rest of them. The cheapest, I guess.
Mr. Munoz. It was one of the lower fares, yes.
Ms. Johnson of Texas. What about the rest of you? Is that
the way you determine who to mistreat?
Mr. Sprague. Congresswoman, no. Our--in the case of an
involuntary denied boarding, our selection criteria is tied to
whether or not the customer had a seat assignment. And if there
are multiple customers that have a seat assignment, it would be
based on the last customer to check in for the flight.
Mr. Jordan. Congresswoman, same thing here. Being very
egalitarian, it is basically the last person that checked in at
the gate, arrived at the gate, is--and again, our goal is to
always not have any involuntary, but to treat all those folks
as a voluntary denied boarding if we have to, and deal with
that before boarding.
But no, it is in the order of, basically, the check-in at
the gate.
Ms. Johnson of Texas. So if someone checks in and is given
a seat, and someone checks in later who paid more for a seat,
they can unseat the person who is seated?
Mr. Jordan. No, ma'am. In the case, again, of Southwest,
the--if the aircraft has 143 seats, for example, and the 144th
person, the overbooked, checks in, they do not have a seat. So
they would be the first person that we attempt to work with to
involuntarily deny board them through compensation.
Ms. Johnson of Texas. OK. But I understand this person was
seated, had been admitted by a ticket and was seated in a seat.
And the person who they were trying to get on did not have to
purchase a seat. So how do you make that criteria?
Mr. Munoz. It was a mistake of epic proportions in
hindsight, clearly, and our policies broke down in that regard.
The situation, specifically, was that a crewmember trying
to get to another flight, in essence, to, ironically, in a
customer-service-oriented fashion, to try and make sure that
that crew arrived at the next aircraft so 150 people could get
to their destinations. And it is a horrible calculus to put
people in. Do you make the flight for 150, or you
inconvenience--seriously inconvenience 2 or 3 on the current
flight?
And so, one of the policy changes we introduced last week
is that, once you sit on our aircraft, and you are on a seat,
other than for safety or security reasons, we will not take you
off that flight.
Ms. Johnson of Texas. OK. Now, I understand there were four
seats needed, three had been given. If that one person had not
arrived at the next spot, would that have stopped that airline
from taking off?
Mr. Munoz. Yes, ma'am. There is a certain level of in-
flight and flight ops crews that we have to have on an
aircraft. And it would not have left. And we did try to find
alternative aspects with regards to getting a different flight
crew in there, but this is a fairly well orchestrated process
throughout the world to get 700 flights in the air on any given
moment.
And so, flight crews are not readily available in all our
different locations. So we did try to look at that process,
but----
Ms. Johnson of Texas. So you have two groups of rules to
look at. Is there--did you address the rule of what happens if
a person--I am sorry, my time is out, but let me just finish
this question for you to think about. If that person had not
gotten to the next flight that you were trying to get there,
what is the alternative if that person couldn't get there, with
three already----
Mr. Munoz. Sure, and we have a policy that we built in. I
am happy to follow up with you.
Ms. Johnson of Texas. Thank you, Mr. Chairman.
Mr. Shuster. I thank the gentlelady. With that, I recognize
Mr. Hunter for 5 minutes for questions.
Mr. Hunter. Thank you, Mr. Chairman.
First, to all of you, thank you for being here. I fly from
San Diego. So I have got one of the longest flights, and I fly
back every week, because I have kids.
So I guess my first question I was going to ask only
slightly in jest is why do you hate the American people, but I
am not going to ask that. I was going to ask how much you hate
the American people. I am not going to ask that, either. What I
have heard a lot of you talk about is competition. Explain that
to me, because I think that is a joke. It is an absolute joke
that there is competition within the airline industry.
If you just look at San Diego, it is United Airlines. I
have no other options, unless I want to fly to San Francisco or
L.A. or Texas or Chicago. There is only one straight shot to
another United-owned hub, Dulles Airport. That is it.
So, any of you, please, explain the competition for a
layman like me, that must not understand it very well. Is
competition, really quick, Jack-in-the-Box, McDonald's,
Wendy's--that is competition. Hertz, Budget, Avis, that is
competition. Having only one airline that flies one straight
shot out of all the airlines? That is not competition. So
please, explain it to me.
Mr. Jordan. Congressman Hunter, just speaking for Southwest
Airlines, I can assure you the competition level that we are
experiencing right now, which is defined basically in a couple
of ways--how many of our routes are overlapped by other
carriers where we have competition--and previously, we look at
where we are overlapped by the ultra-low-cost carriers, the
Frontiers, the Spirits--it has never been higher. And it is
climbing at a rate every single year that is at a higher rate
than the year before.
So, we have never had more competition in our history. And
the best measure is probably fares, because fares ultimately
are tied to competition, and they were down in the fourth
quarter of 2016, 3 percent from 2015, and they are down 6
percent from 2014. So fares have continued to fall. Our average
fare today is $152, which, inflation-adjusted, is below a
decade ago.
Mr. Hunter. You wouldn't describe competition as options?
Mr. Jordan. The--again, I would describe it as where we are
overlapped with other carriers, where we do have competition.
And, of course, you are going to have routes where there are
very few options, and you are going to have routes where there
are many, many, many options. It differs, route to route. But I
can assure you----
Mr. Hunter. Well, let me interrupt, really quick.
Mr. Munoz, at your Houston hub, what percentage of the
flights are operated by United?
Mr. Munoz. I would think in the 60 to 70 percent.
Mr. Hunter. So, 60 or 70 percent, if you are in Houston,
you are going to fly a United flight, most likely.
Mr. Munoz. And it is infinitely less than our six other
hubs.
Mr. Hunter. Ms. Philipovitch, same question for you about
the Dallas hub.
Ms. Philipovitch. Yes. One thing I think it is important to
note is that the purpose of hubs is to build factories that can
manufacture connections. And more than half of the customers
flying in and out of our hubs--or, in some cases, like our
Charlotte hub--70 percent of our customers are connecting
there. So it is not just about the origin and destination
market, because there are a lot of different ways that we build
routes across the country.
Mr. Hunter. OK. So would any of you concede, even in the
smallest way, that there are--in some hubs, in some airports,
there aren't a lot of options, except for just one of you?
Would you not concede that in a small way?
Mr. Munoz. I think, from a commonsense perspective,
absolutely. And it does occur in certain markets, but we all
have broader aspects.
But with the concept of competition--and again, a different
perspective from other industries--if you think of when I used
to work at both Coke and Pepsi, those are two options that have
consolidated over the years to provide two offerings to the
American public. That seems to work OK.
I used to work in the telecom space, and between AT&T and
Verizon, you have that--in both those areas--a lot of product
offerings, a lot of additional things, and a lot of continued
healthy competition. But that is the perspective that I bring
from the outside. I would let Scott talk a little bit about the
competition dynamic inside this industry.
Mr. Kirby. Representative, our----
Mr. Hunter. And, by the way, this is different than any
other thing because we don't have a choice. I have to fly. The
American people have to fly all the time. We don't have a
choice. You have a choice to not buy a Pepsi, you have a choice
to not go with Verizon or you can go with T-Mobile or Sprint,
because that is highly regulated by this Congress,
telecommunications, more so than it is with you all.
But there is no option to not fly is the big difference
here.
Mr. Kirby. Yes, sir. I would say that this is a highly,
highly competitive industry. You can see it in the fares
declining, you can see it in the different kinds of product
offerings that you can get across the airlines. There are
markets where there is only one nonstop carrier, although north
of 90 percent of our customers are flying in markets where
there either is nonstop carrier competition, or we are carrying
connecting customers. So half our customers are flying in
connecting markets, which obviously have lots of competition.
And even in those markets, like Dulles to San Diego, you
know, more than half the people that fly between Washington,
DC, and San Diego choose to make a connection. So they are
choosing to take a connection on someone other than United
Airlines, even though we are the only nonstop carrier in that
market. And in a market like Washington Dulles to San Diego,
there is nothing to prevent another airline from coming in and
flying in that market.
So it is a hugely competitive market. There are instances
where--they are unusual--where there is only a single carrier
in the market, but it is still a hugely competitive market. And
there almost always are connecting alternatives for customers.
Mr. Hunter. Thank you very much, Mr. Chairman.
Mr. Jordan. And I would quickly add, too, again, it is a
route-by-route thing. You can find exceptions, but the vast
majority of routes have a great deal of competition on them.
Mr. Shuster. I thank the gentleman. We anticipate this to
be a long hearing, so we are going to take periodic breaks.
This is our first 5-minute break. This is only for the
witnesses and the Members. Those of you in the audience can go
after the break, because I don't want a mass rush to the
restrooms, if necessary.
So, Adam, start the clock, 5 minutes.
[Recess.]
Mr. Shuster. The committee will come back to order, please.
Everybody take their seats. Everybody get settled in. Thank you
very much.
I now recognize Mr. Larsen for 5 minutes.
Mr. Larsen. Thank you, Mr. Chairman.
Mr. Munoz, I am not quite satisfied with an answer you gave
to Mr. Duncan earlier, so I just want to explore it. The
question asked of you was whether--I believe it was whether
United had used law enforcement at all to remove a person for
overbooking, and then you talked about safety and security
twice in response to the question.
So it seemed to either be a pat answer, or--I don't know.
So let me just be specific. Has United this year removed anyone
using security personnel, strictly on an overbooking issue?
Mr. Munoz. I am not aware of any specific instance where
law enforcement has removed someone for that particular
oversold situation.
Mr. Larsen. Yes, sure, OK, all right. That is clear.
Can I ask you--are you free to--are you able to tell us
what United management or the site manager communicated to law
enforcement that day on the--regarding the customer on United
3411? Was this person--did they say this person is disruptive
and needs to be removed, or did they say this person won't take
$800 and needs to be removed?
Mr. Munoz. It wasn't nearly as specific as that. I think
the failed policy and procedure that we have is that, after the
attempts to incentivize a customer with that amount and other
amounts, the protocol, the policy, calls for asking for
assistance from local law enforcement. And that is wrong.
Mr. Larsen. And so then, what change have you made? Can you
let us know what change you made in your policies with regards
to that?
Mr. Munoz. Well, first of all, the $800, for instance, can
go up to $10,000. Offering alternative solutions for that
passenger to fly--because it is not just about money for some
folks. We had kids on that flight, people--it is--how do you
get to my destination?
And then, of course, what we did is we will no longer have
law enforcement deboard anyone that has already been boarded on
our aircraft.
Mr. Larsen. Yes, OK, thanks. I think part of the concerns
that we have and a lot of us have is that--and sometimes we are
guilty of this, too, I will say this--you made your problem the
customer's problem, and in this particular case. So I think
hearing from you all how you are not making problems you have
about, you know, getting your staff somewhere and making it a
customer's--putting the solution on the customer to solve your
problem about getting staff somewhere is important. And that
goes to, I think, everybody.
Mr. Munoz. I couldn't agree with you more, absolutely,
which is why our crewmembers, unless they check in 60 minutes
before check-in, they will not be allowed to do what happened,
what actually triggered this whole event. So I absolutely agree
with you.
Mr. Larsen. Yes. Mr. Jordan, can you help me understand a
little bit what we can expect to see from Southwest on May 8 or
9 with regards to One Res? You know, last year we had the
meltdown in your IT system that--maybe not as directly to the
subject of this particular hearing, certainly didn't trigger
this hearing, but this is certainly a customer service issue.
So what is--what is going to happen in this roll-out that
is going to make it--I think you called it--bigger and better
than what you have now?
Mr. Jordan. Yes, sir. It is the largest technology project
we have ever undertaken. We have--we have been putting in
pieces for, literally, almost a year now to ensure that they
work as they go. There is extensive testing. We have put in
hundreds and hundreds of thousands of hours of training. We
will have hundreds and hundreds of employees in airports on the
day of implementation to handle any issues that come up. The
testing and all have gone flawlessly, so far.
Like any big software implementation, I expect some small
problems on May 9, when we implement. But I think we are
extremely well prepared, and I expect it to all go very, very
well.
Mr. Larsen. Well, I found that small problems in the
industry--in your industry, when it comes to IT, result in
delays through an entire system. So what--so even saying
``small problems'' doesn't give me a lot of assurance. Can you
help give me some--a little more assurance?
Mr. Jordan. Again, we have tested this product more than
any IT implementation we have ever done. We have implemented
those pieces in phases, so that we are not doing a--usually,
what happens with an airline is you put in something in a big
bang implementation overnight, you wake up, and it doesn't work
very well the next morning. That is usually what goes wrong.
What we have done is implement small pieces almost every
week for literally almost a year now. Second, the--when we
began to add international destinations, they are actually
running on the new system, and have been for more than a year.
So we have been running it in production in a small way for a
very long period of time.
And then the----
Mr. Larsen. That is good. I--just one last question for the
record for United Airlines.
I just--if you guys could get back to us, explain to us why
this particular issue on April 9 was not an overbooking issue.
You keep saying it wasn't an overbooking issue. The customer,
and every customer, and everybody who watched it online saw it
as an overbooking issue. So just----
Mr. Munoz. Happy to get back to you.
Mr. Larsen. Thank you very much.
Mr. Shuster. I thank the gentleman. Mr. Farenthold is
recognized for 5 minutes.
Mr. Farenthold. Thank you very much, Chairman Shuster. And,
much like Mr. Hunter, I am a pretty frequent flier. I am elite
status on every airline up there, except for Alaska, and that
is probably just because you don't fly to Corpus Christi,
Texas--hint, hint.
[Laughter.]
Mr. Farenthold. But what I am seeing is a growing level of
frustration, both on the passengers and from your passenger-
facing crew in the airport. Everybody is in a rush, we have had
to deal with the TSA, we have got to go buy a--you know, some
liquid to take on, because you can't take that through
security. You want to get some food, or you are stuck having to
pay $12 for a TV dinner or $7 for a Lunchable on the airplane.
Passengers are frustrated.
Another piece of it is we are all rushing to get what
limited bin space there is. Several years ago, the airlines all
said the fuel costs are up, so we are going to start charging
for checked bags to make up that revenue. Well, now the fuel
costs are down. Are there any plans to remove the checked
baggage fees, Mr. Munoz and Ms. Philipovitch?
Mr. Munoz. I will let Scott answer that.
Mr. Kirby. Thank you, Congressman. And we view charging for
checked bags as one of the ways that we keep all the other
fares low. In 2016, at United, we spent about $1.9 billion
carrying checked bags.
Mr. Farenthold. OK.
Mr. Kirby. And we collected about $900 million----
Mr. Farenthold. All right. So no, the answer is no.
Ms.--what about American?
Ms. Philipovitch. Same. We put our fees in place to give
customers more options and more choices, and to pay for just
the services that they intend to consume.
Mr. Farenthold. All right. So let's talk a little bit about
Southwest. No checked bag fees.
Mr. Kirby, you said you had to overbook flights to keep
fares low. I can't remember the last time the United fare was
lower than a Southwest fare.
How are you all able to do it at Southwest?
Mr. Jordan. Well, just a couple of things. And we
appreciate your business in Corpus Christi, by the way. The--we
try to make policies that just make sense for the customer. We
feel like, if you are going to travel, it makes sense that you
can bring your clothes along with you.
[Laughter.]
Mr. Jordan. And so--and specifically regarding the overhead
bins, the no-check bag fees allows people to check their bags.
And so we actually have more bin space because they are
checking the bags.
And again, we strive to keep costs low. It has always been
a tenet of our airline, all the way back to Herb. And keeping
costs low allows us to do things like having no bag fees.
And finally, we believe that we get more business overall
because we do not charge fees.
Mr. Farenthold. Great. And, Mr. Munoz, in the very-much-
publicized incident that probably led to this hearing, the
reason you had to get people off was because you were trying to
move a crew to get to their other flight. United is my primary
carrier. So one of the things I see a lot, when I get delayed,
it comes up on my app saying, ``Awaiting inbound crew.''
What I don't understand is why don't you just keep the crew
with the airplane? Why do the crews have to connect? Why
couldn't you put the same crew with the same airplane, and take
that one issue off the table?
Mr. Munoz. I think it is a great thought, but there are
rules and safety implications of making sure people get rest.
And so, the ability to keep crews on the same flight for an
extended period of time is just not something that is easily
doable.
Mr. Farenthold. All right. And then I had one other
question for Ms. Philipovitch about American.
We are seeing reports in the media now about your new
uniform having adverse reactions with over 3,000 flight
attendants, and now with pilots. My concern is not only with
the safety of the crew, but also, if there are toxic fumes or
something that is released as a result of the circulating air
or the heat on the airplanes, there is a potential risk for
passengers. What is the airline doing to address the uniform
issue? Or, if you are not in a position to answer that, could
you get somebody who can to give me the info?
Ms. Philipovitch. No, I am happy to give you info, or
information. And first, I just want to make sure to state that
the safety and comfort of both our customers and our employees
is absolutely our top priority.
We launched a new uniform last fall and--for about 75,000
of our team members. And the vast majority of them really like
the product that we launched. And team members were involved in
developing it, as well.
Shortly after launch we did start getting some reports that
some of our employees were experiencing some reactions to the
uniform, despite the fact that we had put it through a couple
of rounds of testing to ensure that it meets and exceeds
industry standards.
We have been working with those team members, to make sure
that they have alternative uniforms that they can wear, both
different fabrics from the initial manufacturer of our program,
and then also recently we just announced an additional
manufacturer that can provide uniforms for our employees.
So we will continue to work with team members. It is an
issue that we take very seriously, and we are putting a lot of
attention on.
Mr. Farenthold. Thank you. I hear, from the tapping, that
my time has expired.
Mr. Shuster. I thank the gentleman and I also point out--as
I said, made a little comment earlier--sometimes we put these
rules and laws into place that--these situations occur because
the airlines are living with them. And it is not just the
airlines, it is industries across America. So we have got to
pay close attention to what we do and what response from the
industry is.
With that, I recognize Mr. Capuano.
Mr. Capuano. Thank you, Mr. Chairman. Thank you, gentlemen
and lady, for being here.
Here is the problem, is that the flying experience--and
again, we all do it on a regular basis--the flying experience
is like everything else in life. The truth is, my flying
experience is reasonable 90 percent of the time. But it has a
lot to do with lowered expectations.
When I was a kid, I grew up in a neighborhood that every
single playground was full of broken glass, broken basketball
hoops, and no swings. And everybody just accepted it, because
it was the way it was. Now, it is not like that any more, but
it took us 20 years to change the attitude. People today in the
same community that I grew up in would never accept that,
because the level of expectations have been risen.
A problem with the flying experience is, across the board,
we all know it is a terrible experience, starting from the
minute I go on the computer to try to figure out which flight I
want to take. I have to go to several different websites. And,
even when I do that, I have to go into the depth of the
websites to get truly comparable prices, because some don't
charge fees, some do charge fees. Some charge fees for baggage,
some charge fees for oxygen. Who knows? I can't get comparable
prices.
So the very--before I buy the ticket, I am frustrated. I
personally have shut that computer down repeatedly for many
years, because--I got to go back to it, because, you are right,
I got to fly. And you got to go back and you got to dig your
way through it from the very start. But we all expect it to be
a miserable experience.
And then, when I get to the airport, I have to go through
the TSA lines which, now, being a regular flier, I go through
the express lines. But now the express lines are full of people
that don't know to take their keys out of their pocket.
Frustrating. Then I get to the gate. Plane is late, plane is
not late, never explain why.
Now, honestly, up until last week, bumping was not a
problem. I have been bumped on occasion, but it has been
handled reasonably.
By the way, Mr. Munoz, I want to know how to get that
$10,000 thing, because, believe me, I will be flying United a
lot more. You can figure that out.
[Laughter.]
Mr. Capuano. Here is the problem. And, even with these
fees, I kind of--it is interesting. I get the airlines coming
in, complaining about the facilities we have, and yet I see
that in 2015, the latest year we have, $3.8 billion in fees,
which don't pay the ticket tax, which means almost $300 million
that could have been put into improving those facilities
didn't, because you don't want to tell us what your tickets
cost.
It is all--to me, we are kind of sick of it, as the
consuming Americans. We got to fly, you got us. You got us. And
if you want to keep treating us this way, fine. I guess we can
only do so much. But there will come a day when Congress won't
accept it any more on behalf of the American people, and that
shouldn't happen.
Mr. Munoz, you had a particular problem last week. I accept
your apology. I think it is genuine, I think you mean it. But
here is the problem. Your apology is a beginning, and the
policies seem reasonable, the ones you have now. And I am not--
I don't mean to pick on you, but, you know, it is your turn.
The problem is every year I say, you know what? I am going
to the gym, I am going to lose 5 pounds, I am going to get in
shape again. By February, I am kind of out of it. I give up on
it. Every person I know that has ever committed a crime has
basically apologized for it. Didn't mean to. And the apology is
good. And again, I do accept it. I hope and believe it is
sincere today. But I hope you all know that this doesn't stop
today. And you will be judged on how it is implemented.
And it is not just you, Mr. Munoz, again. It happens to be
you today, but it could be any one of you tomorrow. And I
presume you have all rechecked your own rules and regulations
about how you do it. I am sure you don't want to be in the hot
seat the next time.
So the truth is I don't really have any questions because,
again, I do think you have addressed the immediate situation.
But if you walk out of here thinking that the immediate
situation is the only problem the American public has with the
flying experience, you would have missed the point. We have a
problem that shouldn't be as bad and unpleasant as it is. And
you are the only people that can fix it. And I would encourage
you to do so, so that we can get back to the point of--nobody
is against you making money.
I don't want to yell at you. I just want to be able to go
to the airport and get from point A to point B with a more
pleasant experience. And if I do, believe me, I will go back to
your airline more often when that happens.
Mr. Chairman, I apologize for not having a question, but I
think all the questions I had have been answered.
Mr. Shuster. Well, my only response to that is well said.
Thank you. And, with that, I yield to Mr. Gibbs.
Mr. Gibbs. Thank you, Chairman. You know, I was thinking
about this. The--you really have a cultural problem for the
incident that happened on United with the doctor. I mean it is
unbelievable to me that the pilot or the crew or anybody would
have let that happen when you have a person on there forcibly
removed that is not a security risk, or whatever.
So I am glad to see that United is putting in the policy of
the compensation. And that is--I think we saw the problem. I
think overbooking, we have heard today, has its positives. And
I think if--also one big positive, it helps keep fares down for
everybody. But when overbooking does happen, we ought to let
the market forces work. And I think that $10,000 deal, there
will be a stampede to get to that gate person to take benefit
of that, so they have another issue, but that will be a
positive issue, I think.
But the cultural issue, I think, as leaders of your
respective airlines, it is your job as leaders to improve the
culture, because it is definitely a cultural issue.
And instances--I fly basically weekly. You know, there are
times where we could be out on the tarmac because of weather
and whatever, and delays, and it is really nice when the pilot
comes on and says, hey, we just heard from air traffic control.
We are going to be delayed 20 or 30 minutes because of issues
here in DC, or whatever. And there have been times we have been
parked out on the tarmac and they say, you know, it is all
right to--if you have to go to the restroom, use the restroom,
or, you can turn on your phone and we will tell you when to
turn it back off, versus, you know, somebody standing over you
like a gestapo, you can't do anything.
And so there--that is just the whole cultural thing, but I
am really glad to see--I think, you know, the market has to
function to work.
My question I have--and I don't know the answer--do
airlines still have reciprocity agreements or not?
Mr. Kirby. At United Airlines we have interline agreements
to carry customers on most of our competing airlines. And, in
fact, certainly with American, with Delta, with our big----
Mr. Gibbs. I just wanted to make sure, because I know, in
years past, when I was flying, when issues come up you go to
the gate and they say, well, here, XYZ Airline we can get you
on. That still happens?
Mr. McGee. Congressman, can I address that?
Mr. Gibbs. Yes.
Mr. McGee. Prior to deregulation in 1978, as I stated
earlier, interline agreements, as they are called, were
ubiquitous, so that, basically, the burden was on the airline,
not on the passenger.
So, if airline A had any kind of a situation with
overbooking delay, cancellation, the passenger would be
accommodated for the face value of the ticket at another
carrier. Those interline agreements post-deregulation were
sustained on the part of the airlines in some cases, and not in
others.
And when there was an influx of low-cost carriers in the
1990s, major carriers started using interline agreements as a
competitive tool, at the expense of passengers, by not
interlining with startup and newer, smaller airlines. And now
we have a situation where even some major airlines don't
interline with each other.
Now, their feuds are one thing. But the fact is this
affects passengers in a very negative way.
Mr. Gibbs. Anybody else want to respond?
Go ahead, Mr. Sprague.
Mr. Sprague. Yes, I would just say broad generalizations
are one thing. But I think most all major airlines have
interline agreements with all other major airlines, and that is
certainly the case with Alaska Airlines.
Mr. Gibbs. Yes, I was just going to say I think that is
part of letting the market work, you know, some agreement. I
think competitive pressures, we need competition. But when
situations arise that are completely out of your control,
whether it be weather or mechanical failure, you know, we need
to put the customers first. And that is how you keep Congress
off your back, I mean, put the customers first.
Let's make sure that you are expounding a culture out there
that puts customers first, because that incident that happened,
if the culture was right, it was coming from the top, that--I
don't believe that would have happened, because it would have
been--you can't tell me there wouldn't have--there aren't other
paying customers on that flight that wouldn't have jumped at
the chance for $1,000 or $2,000 or whatever, to take a flight a
couple of hours later. I mean it is just hard to believe that
that is the case.
And so, I guess that is where I--my criticism is, that
there is definitely a cultural problem. And I am glad to see
that in your written testimony and your oral testimony you are
fixing to address that, because I think that is really where it
starts. And I think if your--all your team members understand
that the customers come first, and make it work the best, this
is how we solve this problem and let the market forces work.
So I yield back.
Mr. Shuster. I thank the gentleman. I am going to have to
step out for a little bit, and I think I will be back before
this is over. But I just want to make sure that I say this,
because I think it is so important that--you know, in every bad
situation there is a silver lining. We could usually find a
silver lining.
And if the airline industry doesn't find a silver lining in
this is to get together collectively and to figure this out--
because if you don't, just like Mr. Gibbs said, like Mr.
Capuano said, we are going to act. And if we act, it is going
to be one size fits all. And it might be OK for United and
American, but it is not going to be good for Alaska or Jet
Blue, or whoever the case is.
So, again, I am pretty sure I will be back, but I just want
to make sure--that should be the takeaway from today is seize
this opportunity. Because, if you don't, we are going to come,
and you are not going to like it.
So, with that, I hand the gavel over to Mr. Duncan, and I
recognize Mrs. Napolitano for 5 minutes.
Mrs. Napolitano. Thank you, Mr. Chairman.
One of the things that you mention, this self-regulation
that you are going to ensure that you pay attention to it, but
I would wonder whether it is going to be a regular or
inconsistent. How often will you review yourselves to be able
to ensure that there are problems being addressed?
Mr. Munoz. I think, as a regular course, certainly at
United, between ourselves internally, to our board----
Mrs. Napolitano. How often?
Mr. Munoz. Our boards meet five times a year, so at least
that many times.
But internally and to the open public, we have, you know,
86 million customers out there every day. And to everyone's
concerns and thoughts, we hear from them very frequently with
regards to this.
And so, I have an old saying from a long time ago that it
is about proof, not promises. And so, what you have seen from
United in the 18 months I have been there, anyway, is
everything we have said we were going to do we have delivered
upon. And so it will be a constant stream of new announcements
that enhance what we have already talked about, but also a
followup on the issues.
And again, with regards to the policies we put in place,
everyone will have--will be a----
Mrs. Napolitano. And the rest of you?
Mr. Sprague. Congresswoman, in the case of Alaska Airlines,
we are constantly holding ourselves accountable from a customer
service and a customer satisfaction standpoint, so much so that
we actually have customer satisfaction metrics as part of our
employee compensation, as part of our employee incentives. And
those are watched very closely by all employees, all 19,000 of
us. And those are addressed every single month.
Mr. Jordan. Congresswoman, I would say the same thing for
Southwest. Customer service measures are part of the way our--
in particular--our leaders are compensated. So we review those
often.
And then, second, with the change where we will no longer
overbook as part of the oversale, and we expect that to go
down--our denied boardings--80 percent. We will be watching
that every single week.
Ms. Philipovitch. We receive customer feedback in multiple
forms, and we pay attention to all of it and take it all
seriously. We have a team at American that we call our customer
advocacy team that consists of senior leaders from every
department around the airline, and we meet monthly to review
feedback, review our policies, and make changes to continue to
improve.
Mrs. Napolitano. But are they implemented immediately?
Ms. Philipovitch. They are implemented as quickly as we
can. If it is a simple policy change, yes, immediately. If it
is something that requires a technology change, it may take us
a little longer to get it done.
Mrs. Napolitano. Mr. McGee, do you have any comment?
Mr. McGee. Yes. Thank you, Congresswoman. We have heard a
lot today about, again, retraining and improvements. And we
certainly want to give credit where it is due for that. But I
do think that there is an underlying issue here, and that is it
really shouldn't take a media event and a viral social media,
you know, outcry to make executives in this industry rethink
how they treat their customers.
Mrs. Napolitano. Thank you.
Mr. McGee, do you have any comment in the training that is
afforded the employees insofar as mental health is included?
Anything to help the employee deal with customers who are
acting odd? Or on the personal basis for self-improvement?
I have had--I fly twice a week, so I have seen it all. Yet
I have encountered every now and then a very rough attendant.
Would it be because of stress? Would you indicate that any
training is given to them to be able to deal with mental health
problems, if they arise?
Mr. McGee. I think it is an excellent question,
Congresswoman, because, as I stated earlier, this is an
industry that heavily outsources.
I am a former airline employee, myself. So I should point
that out. I am an FAA-licensed aircraft dispatcher. I spent 7
years working in airline flight operations and ground
operations management. And I was very proud to work at PanAm,
an airline that was renowned for passenger service.
But right now we have a situation where employees are under
tremendous strain. I think it is the executive decisions that
are putting flight attendants in the front lines of so many of
these situations. Flight attendants have a primary
responsibility to ensure safety and evacuation and things like
that and, of course, customer service. But we have asked them
to be bouncers and police officers and all kinds of other
things.
Mrs. Napolitano. Right.
Mr. McGee. And so there is no question that there is an
issue of training, as well.
Mrs. Napolitano. I will ask any of you to quickly reply. I
am running out of time.
Mr. Munoz. Simply put, we agree and, in fact, supporting
United today in the audience are several of our pilots and
flight attendants. And I think we work with them constantly to
ensure that what their needs--what they see and that constant
back-and-forth, so that we do put in policies, training, and
other things that----
Mrs. Napolitano. Does it include mental health training?
Mr. Munoz. We do have a policy and a practice that we are
implementing, particularly for our pilots.
Mrs. Napolitano. Well, May is Mental Health Month, so I
urge you to take a look at it and ensure that that is taken
care of.
Thank you, Mr. Chair.
Mr. Duncan [presiding]. Thank you very much.
Mr. Davis?
Mr. Davis. Thank you, Mr. Chairman.
Mr. McGee, thank you for your comments that were just made
about this industry hoping to fix some of the customer service
problems themselves.
Last--you know, like many Americans, I was disturbed by the
video we saw of Mr. Dao, and also other videos subsequent to
this. It is why I, along with my colleague, Mr. Lipinski, sent
a letter to Secretary Chao, asking for answers to questions
about the incident, including maybe what specific guidelines,
if any, Department of Transportation provides to airlines in a
situation where an airline asks seated passengers to exit a
plane in order to accommodate a flight crew.
Mr. Munoz, thank you for taking responsibility, as the CEO,
for that disturbing video, and making sure that there are
policies now in place to ensure that doesn't happen again. That
is the customer service solution that we here in this committee
are looking for.
I don't believe Government can solve your problems. I don't
believe this committee ought to solve any customer service
problems. Frankly, that is something that you should do for
your customers. And we are your customers. We fly a lot. So we
interact with many of them at many different airports. And, let
me tell you, I personally witness better service in certain
airports and worse service in others. And I think each of you
ought to do a deep dive into where the customer service issues
may be in your existing system, in your hubs, and also in the
small regional airports. And also, if there are any issues with
TSA, let us know, so that we can help correct that situation,
too.
Mr. Munoz, I had a question for you but, trust me, you
would have answered it probably 10 times already today, so I am
not going to ask you that question, although a simple yes or
no--do you also agree with me that United is better able to
make customer service changes versus us?
Mr. Munoz. I believe so, yes.
Mr. Davis. Thank you, thank you. I--you know, representing
central Illinois, I--when this happened, when we were going to
have a hearing, I did what I like to do, I sent a survey out to
my constituents. I actually have 29 pages of responses, over
2,000 responses to our survey. And overall, my constituents
rated their customer service experiences with the airlines a C.
That is passing, average.
On a positive note, the vast majority said that--73 percent
of them said they did not feel as though they had ever been
mistreated by an airline employee. So that is good news.
However, when asked if they felt the airlines were focused on
good customer service, 60 percent said no.
Mr. Jordan, one of the most consistent responses in our
survey was an overall satisfaction with your airline. Did you
hack my system?
[Laughter.]
Mr. Jordan. I do not believe we hacked your system.
Mr. Davis. All right, thank you. Beverly from Glen Carbon
said, ``Southwest employees and flight attendants are
friendly.'' Mary from Staunton, ``Southwest employees, from
start to finish, are professional and friendly.'' Winona from
Springfield said that Southwest really cares about their
passengers.
In all seriousness, is this a common trend on how customers
feel about their experiences? Are you seeing that with your
airline?
Mr. Jordan. Congressman, yes, sir. Our NPS scores, our net
promoter score, which is really how we measure customer
service, are very high. They are in the high 60s to 70 range.
So they rank in kind of the Nordstrom, Google, Apple kind of
NPS scores. And we find that across all airports, we find that
across all parts of the customer experience journey. And I
think that is due to not just changes that we have made, but it
is due to the wonderful employees at Southwest Airlines.
Mr. Davis. You do have good employees. I fly your airline
from DCA to St. Louis a lot. But I also fly American Airlines.
That is the one I fly most. And I will tell you an overwhelming
majority of the time every airline employee is very respectful,
does their job extremely well, and provides great customer
service.
But it is just like in our business. Sometimes they don't
remember the good service. Sometimes it is that incident that
leads to all of you sitting in this hearing room today, talking
to us and answering questions.
I tried working with many of the airlines to address a
customer service problem that I saw and have witnessed many
times. It is parents flying with children, getting to the
airport, and being told that they are not sitting by their
young children on the airplane before they even get there. And
I asked many of you, many of your airlines, ``Can you maybe
devise a way to fix this?'' You didn't do it on your own.
So I had to actually write language called the Families
Flying Together Act that is part of the FAA reauthorization
that would require anybody who is purchasing an advance ticket
and a seat, and if they have young children--maybe there is a
popup on that reservation that says, ``You know you are not
sitting by your child,'' because trusting the gate agent and
the flight attendants to make that decision is not providing
the passengers the customer service that they deserve. And you
know, as well as I do, that that is something that needs to be
addressed.
I was hoping we wouldn't have to address it here, but that
is a shining example of when you don't act, we have to. And
that is exactly what Chairman Shuster just said. Don't make us
have to act and put a one-size-fits-all approach to fixing
problems that we obviously see exist. They may be the
exceptions. They may be. And we know they are, because we see
it. But, in the end, those exceptions will bring a lot more
rules from us if it is not addressed. So thank you.
Mr. Duncan. Good comments.
Mr. Lipinski?
Mr. Lipinski. Thank you, Mr. Chairman. Just this morning
the Bureau of Transportation Statistics came out with a report
that said in 2016 the passenger airlines recorded a profit of
$13.5 billion--$4.2 billion of that was from baggage fees and
$2.9 billion from change fees. And it is the seventh straight
year of profit for the airlines.
Now, I have nothing against profit. We do not want to go
back to the days where all the airlines were failing, because
we need the airlines to be able to function. But I think it is
an important context, the position that the airlines are in
right now, financially.
I want to commend United and Southwest for some of their
policy changes that they have made in recent weeks. And I
encourage the other airlines to follow suit with those changes,
and in others. But these changes are not enough to protect
airline passengers, and I think, as Ranking Member DeFazio
said, we need to prod, regulate, or legislate, so that
passengers are better protected.
Sixteen years ago on the House floor the then-ranking
member of the Aviation Subcommittee--Mr. Duncan was chairman of
that subcommittee at that time--he said, when discussing
airline mergers, ``If there are only three or four mega-
carriers serving the U.S. market, the Federal Government will
once again have to regulate the airline industry.'' That was my
predecessor, who is also my father, Bill Lipinski.
Now, I am not saying we need to go back to pre-1978 and go
back to complete regulation. But perhaps there are some things
that we may need to bring back. Mr. Gibbs raised the
interlining issue. Mr. Kirby said that United does interline,
but I want to read from United's contract of carriage. It
states, ``Upon United's sole discretion and the passenger's
request,'' meaning the passenger has to know this is in the
contract of carriage and request it.
And I actually think this is one of the better interlining
statements about interlining or--one of the better things in
the contract of carriage of any of the airlines. So maybe we
have to go back to rule 240, that said that an airline with a
delayed or canceled flight has to transfer a passenger to
another carrier if the second carrier could get the passenger
to a destination more quickly than the original airline.
And let me say this. I know that you will gouge each other
in this type of situation. So maybe we put in there that some
sort of restriction on how much one airline can charge another
in that situation. But it seems to me, if we want to help
passengers out and protect passengers--and this is not to go
after the airlines, but if we want to protect passengers, to
have these types of agreements, require perhaps these types of
agreements, that this is a way to make sure more people get to
their destination at a closer time to when they were supposed
to get there.
Now, I want to open it up to each one. I don't have much
time, so be quick. Is there a problem? Could you--would this be
a problem for you to do this? Let me start with United, whoever
wants to answer.
Mr. Munoz. I think we are an active user of interline
agreements. I think we have used them less and less as we
became more reliable. And I think an important note is to have
those fees and that money to reinvest in our business, so that
we can improve reliability. And that has been the first trick.
But with regards to interline alliances, we are strong
believers.
Mr. Lipinski. How often do you use them? How often does a
passenger----
Mr. Munoz. We use them a lot less than we used to, because
we don't need to. It is not a function of wanting to----
Mr. Lipinski. Would you be willing to make this more--
change the contract of carriage, where it doesn't say the
passenger has to request it?
Mr. Munoz. I will leave that language discussion to someone
that is more versed in it. I think the way we put it into
practice is pretty customer-oriented, and we also don't gouge
for--our agreements with our fellow--like others.
Mr. Lipinski. That is good to hear.
Mr. Sprague. Congressman, I think ultimately what you are
suggesting is finding better ways for us to accommodate
customers in these situations, and we agree with that. And, as
I said previously, we do maintain these agreements with other
airlines.
Mr. Jordan. Congressman, with the change to no overbooking,
I expect the percentage of this happening to go down to .001
percent. So it is going to be a very small number of customers
that need to be accommodated.
We do not have official interline agreements. We have
informal interline agreements at the airport. And a lot of
times what we actually do is we empower our employees to
actually buy tickets on other carriers to move our passengers
to their destination.
Ms. Philipovitch. Given the disruptions that are sometimes
inevitable in the airline industry, service recovery is one of
our top customer service priorities at American, and we are
constantly working to improve the tools that we use, both
behind the scenes and that are available to our employees, and
self-service tools for our customers, to make sure that we
provide customers with the best options to get them to their
destination when they have disruption. And sometimes that does
involve booking them on other carriers, and we will continue to
do that, as well.
Mr. Lipinski. I don't want to regulate, if we don't have
to. I prefer not to. But I now know that I will ask every time.
I have been told at times by Southwest, well, we don't have any
interline agreements, we can't put you on another airline. So I
want to make sure people know--I will know--make sure people
know to ask if this ever happens to them. And maybe that--we
can solve this problem. Thank you.
Mr. Duncan. All right. Thank you very much. Mr. Babin?
Dr. Babin. Yes, sir. Thank you, Mr. Chairman. I am Brian
Babin from the State of Texas, and I was a small businessman
for over 30 years. I know the importance of customer service
and courtesy, running your business according to the Golden
Rule, and know how significant it is if you have disgruntled
customers. If you treat everybody like you would want to be
treated, I think this world would be a lot better place.
Some of you have--may have already answered this question,
because I would like to address this customer service. Does
your airline gather and analyze customer service data? And if
not, why not? And if so, does your airline identify customer
service issues and address customer dissatisfaction?
I know Ms. Philipovitch, I think you said that you--
American is already doing that. But I would like to know,
because I fly United most of the time into Houston, although I
did fly Southwest--I do fly that occasionally. And I would like
to know what you guys do, in terms of keeping data and customer
service.
Mr. Munoz. At United we have actually pivoted from what
used to be a very arduous survey that you received with 100,000
questions that took you forever, and we did that for a long
period of time. And the fact of the matter was that, simply,
the things that you kept telling us, you just kept telling us
again. We weren't getting it--to fixing it.
We pivoted away from some of the more fancy measurements,
and just went to a simple survey that says, ``Did you like the
flight, yes or no?'' And, if you didn't, why not? And we put
pictures, to make sure, whether it is luggage or customer
service--and the importance of that, it is clarity and
specificity. And then, more importantly, we take that data
immediately, as opposed to a week or a month later, and provide
it to, oh, yes, the people that actually run that airport, so
they can actually fix it.
So that is the level of information we correct, but it is
more about the action that supports it, versus just gathering
of data and your support.
Dr. Babin. OK, and I would like to ask Mr. Jordan the same
question.
Mr. Jordan. Yes, sir. We measure every single day on every
single flight the customer satisfaction around not just the
flight, but every point in the journey. How was your buying
experience, your boarding experience, your gate experience,
your in-flight experience? And then we use that to provide
feedback to constantly improve.
Dr. Babin. I appreciate that very much, and I am going to
run out of time, so I have some other things I would like to
address.
In terms--we have talked about ticket change costs. I think
the other side of the aisle had mentioned the amazing
differences in cost between changing a ticket. Some is either
free, $15, and some of them $200 or $300. And I am very
disappointed in the differences between that, especially with
some of the airlines that I fly most frequently. And I would
hope that would be a more uniform cost to the passengers.
As a former private pilot myself--used to love airplanes,
and I love airports, but it has gotten to be a very onerous
task, since I fly about 6, 7 hours a week. And I would like to
see a little more--I don't want to regulate--I am a
conservative Republican. I don't like regulation, if we can get
away with it. But something has got to be done, in terms of
customer service with some of you airlines.
Also, frequent delays because of lack of a gate agent. That
has been another problem we have seen, where your aircraft
pulls up to the gate. You may be 10 minutes early, or whatever.
You have to sit there and wait on the tarmac for a gate
employee to come out and hook you up. That seems to be a
frequent problem that I have seen and also heard complaints. So
what is going on there, if you don't mind, with United? I fly
you most of the time.
Mr. Kirby. Well, thank you for the business, Congressman.
At United, that is one of the things we are focused on, is how
we can run a more reliable operation, including turning
aircraft. And one of the things we have recently started is
measuring every single step in the process, including what you
just described as a gate agent should be there to meet the
airplane. Not just a gate agent, but the crew, as well. And
that is one of the things that we are measuring, and now have
available to every one of our stations. And any time we fail in
that, we will have data to be able to go back and figure out
corrective actions or policy changes or staffing changes or
anything that we need to address that.
Dr. Babin. Thank you very much. You know, the biggest
concern, I guess, of any transportation service--and that goes
for the airlines above all--get your passengers there safe. And
I think all of you are doing a fantastic job there. But there
are differences between customer service and satisfaction. And
I think airlines are at a low ebb right now, in the public
opinion. And some of you are doing quite a bit better job than
others, and I would hope that would be standardized without any
kind of regulatory reform and changes.
So my time is up, Mr. Chairman, so I will yield back. Thank
you.
Mr. Duncan. Well, thank you very much.
Mr. Cohen?
Mr. Cohen. Thank you, Mr. Duncan. Mr. Munoz, you have
apologized and made compensation for Dr. Dao. I appreciate
that. It was awful to watch that. It reminded me of a Trump
campaign rally. People shouldn't be treated that way.
But the problem we have got is overbooking of airlines. And
the reason we have the overbooking and having to take that man
off the plane, or have somebody come off the plane, is because
the airlines are beyond the realm in getting profits, profits,
profits, higher salaries for executives, and less for
customers.
Part of that can be seen in the size of the seats that you
have for the customers. Now, American and Delta are a tiny bit
better than United on pitch. Spirit is the worst. I think Sky
Blue is good, but probably Alaska is OK. It has been shown that
passengers can get problems with their veins and thrombosis
from long flights when they are so close together. Seats have
gotten smaller, pitch has gotten less. Safety is a factor, as
well as comfort.
Mr. Munoz, can you tell me what United has done, if
anything, to try to have seats, size, and pitch that is safe
for an evacuation of an airplane if an emergency should occur,
which I believe is supposed to be 3 minutes to get everybody
off?
Mr. Munoz. If I could, Scott is our seat expert, and has
been doing this for quite some time. If I could yield to him--
--
Mr. Cohen. If you could, briefly give me the answer.
Mr. Kirby. Yes, sir. Safety is our number one priority, as
it is at all of the competing airlines here today. And we test
all of our aircraft for evacuation in the case of emergency.
And that is done under the guise of the FAA. And so all of our
aircraft, not just at United Airlines, but at every airline in
the country, is----
Mr. Cohen. And can you get everybody off in 3 minutes?
Mr. Kirby. Yes, sir.
Mr. Cohen. And has the diminution and pitch and width not
made it more difficult?
Mr. Kirby. Sir, we still meet those standards. And the----
Mr. Cohen. Do you have a film of that which my staff and I
can view?
Mr. Kirby. We actually do have films of that.
Mr. Cohen. Great. If you would let Mr. Fulton know, I would
love to see it, because I find it hard to fathom, with those
seats.
Particularly, Ms. Philipovitch, American has become the
number one carrier in Memphis. We thank you for filling the
void that Delta left after Mr. Anderson testified before this
committee that Cincinnati and Memphis would not be hurt, there
would still be hubs, and there wouldn't be any changes with the
merger. So American has come in and filled up that.
But yesterday I flew on Air Wisconsin, and that is the
worst seat I have ever had in my life. I have been there
before. I refuse it. I made a mistake. I am going to start
coming earlier and getting the Embraer Air, which is a good
plane. The Air Wisconsin planes are, you know, buses with
propellers. Why do you use Air Wisconsin and put passengers in
those teeny-tiny, awful seats with the--probably the worst
pitch, worse than Spirit, and the worst width? Why do you use
those?
Ms. Philipovitch. Well, first of all, thank you for your
business in Memphis. We are glad to be able to welcome you on
board.
We work with regional partners to allow us to have
different size aircraft, so we can serve small and medium-sized
communities across the country. And we are really proud to do
that. We know that we need to work to standardize the products
and services, because when a passenger buys a ticket on
American Airlines, they expect American Airlines' level of
service. So we have----
Mr. Cohen. That is what I expected. I thought I was going
to get an Embraer Air, and instead I got on, you know, Air
1941. It was like a civil rights bus from the 1960s that had
been preserved and had propellers put on it.
Ms. Philipovitch. Well, I apologize that you had an
uncomfortable flight. And please know that we are working to
improve and standardize the experience that our customers have,
regardless of who operates the flight when they buy an American
ticket.
Mr. Cohen. Thank you.
Mr. McGee, do you believe that the pitch and the width have
hurt customer safety, as well as maybe imperiled--diminished
comfort?
Mr. McGee. Yes, absolutely. It is not just a comfort and
value issue. It is a safety issue, in terms of evacuation. It
is a health issue, as you noted, in terms of DVT. Consumers
Union has researched this and advocated about it and written
about it, and we found, when we reached out to the Federal
Aviation Administration, that there are unanswered questions.
When the FAA conducts its evacuation drills, that they are
outdated in many cases, A, because they don't reflect real-
world load factors, which now are often at 100 percent--they
are at less than 100 percent. B, they are often with employees
and things like that, so often they are people that know how to
evacuate a plane. And the third reason is that they often don't
reflect accurate, real-world seat pitch, as you have pointed
out.
So there are unanswered questions here about the most
primary issue of all, which is safety.
Mr. Cohen. Thank you, sir. My time has expired. But to the
airlines, think Memphis. We need more flights.
[Laughter.]
Mr. Duncan. Thank you very much. Mr. Smucker?
Mr. Smucker. Thank you, Mr. Chairman. There has been a lot
of discussion today in regards to competition and regulation of
the industry. And I, myself, prefer a free enterprise system,
prefer to keep Government out of the way whenever we can
possibly do that.
But I think the real question for us today is whether
additional regulation will be needed, whether there is enough
competition to prevent that. And I think, Mr. Munoz, you said
it best. You said the best way to avoid the need for that is
for the industry to do self-regulation. And I think what we are
looking for is to be able to have the confidence that the
industry will provide the customer service that our
constituents deserve without the Federal Government stepping
in.
So we had a horrific incident. Unthinkable, to see what we
saw, the images that we saw on those videos. And I think our
job is to determine whether this is a one-time incident, or
whether it is indicative of a culture that could lead to
additional incidents like this. And I believe, in many ways,
that the top of the organization, the CEO, sets the tone.
I was a small business owner, admittedly much smaller, only
had a few hundred employees. But the tone of the CEO is
absolutely critical to drive the customer service throughout
the organization.
Mr. Munoz, you ask us to trust you today to make the
changes that will be needed here for United. I must tell you,
if I am a member of the general public, seeing your reaction,
seeing the reaction of United initially and in the few weeks
after the incident, there is a lot of work to be done to
convince us that you are responding properly to this horrific
event.
The day after the incident--and I will quote--you said, ``I
apologize for having to reaccommodate these customers.'' And
then, later that evening, you said to your employees, ``While I
deeply regret this situation arose, I also emphatically stand
behind all of you, and I want to commend you for continuing to
go above and beyond.''
Mr. Munoz, could you tell us what you were thinking at that
point?
Mr. Munoz. Sir, with regards to the initial response, I
think it was--there is no excuse. It was an act based upon me
trying to understand facts and circumstances, and it is on me.
It was the wrong thing to say at the wrong time.
The second comment, after we gathered more facts, and we
understood a little bit more of the facts and circumstances,
what had caused the event, who had been involved in the
physicality that you saw, it was my point to make sure that our
87,000 employees understood that we had----
Mr. Smucker. I am going to interrupt you, and I am sorry, I
only have 5 minutes. I was appalled at your comments the first
day, sent a letter the morning of the next day, April 11th,
which, Mr. Chairman, I would like to submit into the record, if
I could do so.
Mr. Duncan. Without objection.
[Congressman Smucker's letter to Oscar Munoz follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Smucker. There were simple questions in regards to
policy that had led to this in regards to what United was doing
to change that policy.
Mr. Munoz, it took you 2 weeks to respond to that letter.
The response did not fully address the questions. You did send
a review and action report. I was amazed that report did not
even mention that your passenger was physically harmed. I think
that is an important part of the investigation. It is not
mentioned in your report. Would you care to respond to that?
Mr. Munoz. Sir, we prefer, given the video was indeed so
visible to so many people, to just stay with the basic facts of
the situation, and not further sort of elaborate on those
things. And again, the document, as we have laid out, was, in
fact, to get as much information out there as possible.
Mr. Smucker. I have 46 seconds. You do--I commend you for
some of the changes that you are making in regards to policy
for your employees. I am very disappointed that you are not
changing, or at least not mentioning a change to the policy of
how you would select a passenger for removal. That is
unbelievable to me, that, after that has occurred, you would
not take, for instance, the very last passenger that shows up
at the gate, rather than some other algorithm to choose an
employee. So I am very disappointed about your response in that
regard.
Mr. Munoz. Thank you. The situation is a difficult one,
because if someone arrives late because they were delivering a
baby or something--it is a difficult choice. Our policy, our
practice, our go-forward sort of situation would be, as much as
possible, to ameliorate the possibility of those actual events
happening. And in regards to reducing our overbooking, making
sure crews get there on time, and, most importantly, once you
are on board one of our aircraft, you will not be removed, and
certainly law enforcement will not be allowed, other than for
safety or security.
So I think we have covered most of those issues. And, of
course, we will offer incentives and financial remuneration,
along with alternative solutions to get to your destination.
So it is a start, sir, and I think we will move forward.
You will see us do that, and I hope I do earn your trust.
Mr. Smucker. Thank you. I am out of time.
Mr. Duncan. Thank you very much.
Mr. Sires?
Mr. Sires. Thank you, Mr. Chairman. Well, first of all,
the--what happened is awful for your industry. And I know you
are uncomfortable sitting before us. But you know what is more
uncomfortable? When you have friends that travel your airline
and they have a lousy flight, you jerk them around, you send
them--they miss the flight, and then they call you up and say,
``What are you going to do about it?'' These are lifelong
friends.
And last summer I had friends of mine that traveled to
Europe out of Newark, which--I represent part of it. And 9:30
they were supposed to take off, 1:30 they cancel the flight,
put them in a hotel, no luggage. Next day you send that to the
wrong city. They had to get a van to go and travel to meet the
schedule that they had in Europe. And I had to listen to all
that from my friend, ``What are you going to do about it?''
My question to you is are you too big to manage your
industry? Have you grown so big that you can't manage--I mean
you are moving 186 million customers a day. Do you consider
yourself too big to manage? Because I was listening to the
former Virgin Air founder Richard Branson. And one of the
things that he suggested is that this industry is getting out
of control, just getting too big to manage.
Mr. Munoz. I think the value of the large footprint that we
and other airlines at this table have is the ability to really
connect customers to all parts of the world through our various
networks. The large----
Mr. Sires. You can do that with smaller airlines and still,
you know--one big, humongous airline----
Mr. Munoz. With all due respect, sir, it is a little bit
more difficult than that. The handoffs that we do have today
can be difficult, and are continuing another concern that we
have of ours. But I think the large-scale certainly provides
and allows for some more freedom of choice. But also the
complexity is something that we have to better manage.
We are an organization that--around policies and procedures
on safety that work very well, and--but again, to your point,
it is important that we localize that customer service, not in
a broad perspective. And every one of our stations, every one
of our folks are very keen and focused on that.
Mr. Sires. Mr. Kirby, I assume you are responsible for the
size of the seats in your airline?
Mr. Kirby. I can certainly answer questions about them.
Mr. Sires. Well, you know, I would tell you to consider
that people are getting larger in America. And the idea of
making the seats smaller is not safe.
Mr. Kirby. Well, sir, safety----
Mr. Sires. Three minutes? I don't think I can make it out
of a plane in 3 minutes.
Mr. Kirby. Safety is our number one concern at United
Airlines, and we are focused on safety.
As to seat size, we are trying to offer our customers more
choice, and----
Mr. Sires. Well, that brings me to another question. Every
time you want to do something, you have got to pay extra. I
mean if you want a window with a--you got to pay extra. If you
want a little extra seat in the front, you want extra.
Mr. Kirby. Yes, sir.
Mr. Sires. I know you are saying that it is--you know, that
it has to do with the price of the ticket and everything else.
But pretty soon you are going to charge to use the restrooms.
Mr. Kirby. Sir, we are never going to do that. But it does
have to----
Mr. Sires. You are not going to do that?
Mr. Kirby. We are not going to do that.
Mr. Sires. I appreciate that.
Mr. Kirby. But it does have to do with the price of the
ticket. It costs the same to fly an airplane, whether you have
150 seats or 138 seats on board, essentially the same. And if
you take 12 seats off to create more room on the airplane, you
are going to have to charge more.
Mr. Sires. If you take up more room.
Mr. McGee, can you respond to that a bit?
Mr. McGee. Yes, absolutely. Congressman, today we have
heard an awful lot about pricing. And we hear this sort of
charge over and over again, that prices are lower than ever
when adjusted for inflation. We have heard it several times
today.
The fact is that that obscures several key things. One, of
course, is the fees, as you pointed out. Years ago we didn't
pay to sit by a window, we didn't pay to bring a bag on, et
cetera.
Mr. Sires. Do we have any idea how many fees the companies
charge?
Mr. McGee. We see that every day they are not only higher
and higher fees, but new fees. And now, for the first time,
admittedly----
Mr. Sires. The airlines are making money. It is not as if
the----
Mr. McGee. No question about that. There is no question
they are making money. There is no question that the price of
fuel has gone down. So, you have apples to oranges comparisons
there, but in addition, even just within a given route, the
fluctuation in fares is so great.
We have seen, time and time again--the DOT puts out a
quarterly airfare report four times a year that shows where
there is competition from low-cost carriers, from Spirit, from
JetBlue, et cetera, fares go down.
In fact, there was even--as Mr. Jordan well knows, the DOT
called it the Southwest effect to address this back in the
1990s.
When there is no low-fare competition and the majors are
competing with each other, or not competing with anyone,
effectively, in many markets, fares--disproportionately--when
we talk about average fares, the disproportionate rate between
the lowest and the highest is so great that passengers all over
the country are getting gouged. There is no competition.
If you would allow, if I had a moment, I can just tell
you--this is on a low-cost carrier, mind you--coming here
yesterday--I received the invitation last Wednesday, and flying
from Connecticut, where I live, I went on last Tuesday night at
midnight, 43 minutes after midnight. I found a fare of $398.40.
Unfortunately, my credit card had a problem, which we don't
need to get into today, but--I am a consumer advocate, not an
airline executive.
I went back on 7 hours and 36 minutes later. That price was
now 648.40 on a low-cost carrier. That is $250. That is a 61-
percent increase in 7 hours and 36 minutes. There are not too
many businesses that charge such a wide variance in price for
the exact same product. Luckily, my credit card worked the
second time.
Mr. Sires. Thank you, Mr. Chairman. I am sorry I took so
long.
Mr. Duncan. Thank you.
Mr. Sam Graves.
Mr. Graves of Missouri. Thank you, Mr. Chairman.
We have certainly heard a lot today about everything that
has gone wrong, and I am going to give you the opportunity--and
we will start with Mr. Munoz. So, what is going right?
Mr. Munoz. Sir, thank you for asking that question. What is
going right, at least from the United perspective, that over
the last 18 months, our operational reliability has improved to
a degree that, in this month, we are finishing first in the
four publicly reported metrics.
So, we have learned--I have learned over the course of my
time, when it comes to customer service and customer needs,
there are three basic things that people want.
First and foremost, despite what they say about all of the
other important items like food and seats, reliability is the
most important one. Get me where the heck I asked to get to.
So, we have been investing in our people and our business
and our resources to ensure that reliability has improved, and
it has improved mightily.
Second, an issue of concern with customers is flexibility.
We are almost a 100-year-old company. Safety is a main driver
for us, and safety is so important that the rigorous
application of policies and procedures is a discipline that has
carried over into our customer service area.
That is where we have to make the changes. That has been
our next sort of approach.
Then, lastly, with regards to information, if something is
going wrong, tell me the hell what is going wrong and tell me
as quickly as I can so you don't sort of upset my timing and
schedule.
So, that is what--we have been working on those things, and
the incident of a few weeks ago was a horrible incident that we
are never going to repeat, but the trajectory of our company in
that regard has been doing very well.
Mr. Graves of Missouri. Mr. Sprague?
Mr. Sprague. Congressman, thank you for the question.
I think I would lead with, at Alaska Airlines, our
employees--employee morale is high, and they are very focused
on doing a good job for the customers, and they are working
very hard in that regard.
I had a bit of a complaint when I flew out here yesterday
on Alaska Airlines. The inflight Wi-Fi was slower than I would
have liked, and yet, when we think about it, it wasn't that
long ago that the notion of being able to do your email onboard
a flight at 30,000 feet would have been unheard of, and yet, we
are taking that on as an opportunity to do even better, and we
will be installing satellite Wi-Fi across our fleet so that we
can improve that part of our customer experience.
I think that is an example of--to answer your question very
directly, one of the things that is going right in the industry
is the innovation. Airlines are investing in their product, and
they are doing it with innovative new approaches to technology
and service to make the customer experience as good as it can
be.
Mr. Graves of Missouri. Mr. Jordan?
Mr. Jordan. I think--I am speaking for Southwest--so many
things are going right, particularly on the customer service
side. The NPS scores, how we measure service, are the best that
they have been in the last 3 years. They are 11 points higher.
OTP is 7 points higher than 2 years ago. The mishandled bag
rates are the lowest they have ever been in the history of our
company.
The complaint ratios, even though we enplane 12 percent
more customers than 3 years ago, they are nominally lower
today.
So, I think a lot is going very well on the customer
service side, and just briefly, you mentioned seats. We are in
the middle of retrofitting quite a bit of the fleet with a new
seat, and that seat is actually wider and with better effective
pitch, so the personal room for the customer is actually
getting better.
So, I think there are a number of things that are going
better for the customer in terms of customer experience.
Mr. Graves of Missouri. Ms. Philipovitch?
Ms. Philipovitch. Thank you for the opportunity,
Congressman.
It is a time of great optimism at American Airlines, and
just in the past 3 years, we have added more than 10,000 new
team members to our American family. We have increased our team
members' compensation by an average of more than 35 percent. We
have added 100 new routes, and our team members have delivered
amazing results, improving our reliability, and we have seen
customer satisfaction scores going up, and this is all at a
time where we are making unprecedented investments in our
product and our customer experience. So, we are really excited
about what the future holds.
Mr. Graves of Missouri. Thanks, Mr. Chairman.
Mr. Duncan. Well, thank you very much.
Ms. Titus.
Ms. Titus. Thank you, Mr. Chairman.
I represent Las Vegas, and this is a place that knows a
thing or two about customer satisfaction and hospitality and
service.
We welcome over 43 million visitors to my district every
year, and many of them come through McCarran International
Airport, which is also in my district.
Now, I have often heard my friend, Jim Murren, who is the
head of MGM Resorts International, say that people talk about
their experience from the moment they leave their home, all the
way through the trip, to the time they check into his hotel,
and that leaves a lasting impression on them about the quality
of the visit they have.
Now, he doesn't want to have to buy breakfast for some
angry customer like Mr. Capuano here when they get there
because they have lost their bag or they had to wait for an
hour to get a cab or they had an unpleasant flight experience,
and I am sure you do not want to deal with that same kind of
customer either, but it is no wonder that they exist.
We have heard all these stories about ticketing systems
crashing that leave passengers stranded, long lines passing
through security, baggage fees that push customers to take
their suitcases onboard, and despite the fact that you say one
goes up and one goes down, they are cramming them all up there,
bumping into people while they do it.
You know, add that to the xenophobic policies of the
administration who are doing this extreme vetting and checking
your Facebook or email or whatever when you get on the plane.
It is no wonder that people come kind of girded for battle.
So, I have some sympathy for what you are having to deal
with, but this is my question. We have heard all this kind of
ranting about how bad the airlines are and all these
unfortunate experiences, and yet, pretty soon, this committee
is set to consider a proposal to privatize air traffic control
and hand over billions of dollars' worth of investment and
assets to a private corporation that is going to be controlled
by you all, by the airlines, and then you will be able to run
it as you see fit.
Now, I am opposed to that for a number of reasons,
primarily because of how it is going to leave customers kind of
in the lurch, but my question is, what do you have to show that
means you are going to be able to take over this corporation
and do well by your customers from that angle any better than
you do from your angle that you are now?
For example, there are questions like, how much is the
traveler going to have to pay to this corporation? What kind of
things have you done at your airlines in terms of routing that
might be better that you will do through this corporation, in
terms of investment in technology, management decisions? What
have you done about your own scheduling?
All of those questions that have seemed to be criticized
today--how are they going to translate into your being able to
control the air traffic control system through a private board?
So, maybe you all could just tell me some of the things you
are doing that would make an argument for why you should
control that aspect of airlines, as well.
Mr. Kirby. Thank you for the question, Congresswoman, and
we believe that one of the ways we can actually help our
customers is through ATC privatization. The worst thing we do
to our customers is the long delays and cancellations, and
those lead to customer service problems. They lead to the
customer that gets to McCarran and is upset, and we want to fix
that, and the FAA is a fantastic partner, and they want to fix
that, as well, but they are handicapped today by the model, by
the model where they do annual budgets, where investing for the
future and the kinds of investments we need to make for the
future are hard for the FAA to do in the normal course of
business in the Government, and the kinds of things that we
could do to make the process better is, for example, you know,
getting--you know, you have more sophisticated GPS technology
in your car than we use in aircraft today.
We have the systems, and we could fly straight line routes,
but we still fly zigzag highways in the sky to get from
Washington to Las Vegas.
We could do things like continuous descent approaches. So,
today, we are at 35,000 feet. We step down in each one. It is
like driving your car and slamming on the accelerator, then
hitting the brake, and slamming on the accelerator, and we burn
gas, and we take more time.
All of that could allow us to fly shorter paths and get our
customers there quicker, and we believe that it is one of the
best things we could do for customer service, is to reform the
ATC program, and one of the best ways to do that is FAA
privatization, not because the FAA is doing a bad job. They do
a wonderful job, but the process is designed to be difficult,
particularly for making long-term investments.
Ms. Titus. What guarantee does the customer have you will
do any better job at that than you are doing now with just
getting them on the plane or dragging them off?
Mr. Kirby. Well, we are--while we do have bad incidents
like what happened 3 weeks ago on United Airlines, we are
carrying 86 million people safely this year.
As all of us talked about in the last question, we are
getting better at running reliable operations, and in this
case, we have the exact same incentive. What is better for our
customers is better for the whole air traffic system. It is
better for our economy, and we have the same set of incentives.
If we can fly more efficiently, that is good for our
customers to get in there faster, but it is also good for fuel
burn.
Mr. Duncan. I am sorry. We have to take a 5-minute recess
at this time. We will be in recess exactly 5 minutes.
[Recess]
Mr. Duncan. We will go ahead and start back, if everyone
will please take their seats, and the next Member to ask
questions is Mr. Lewis.
Mr. Lewis. Thank you, Mr. Chairman.
I do not want to go down the road here, in my 5 minutes, of
telling you how to run your business. We get far too much of
that from Capitol Hill, it seems to me, and you know more about
running your business than probably most of us here.
I do want to come to you, though, as a consumer, a consumer
who just spent, two weekends ago, 30 hours getting from
Washington, DC, to Minneapolis, Minnesota.
I and another colleague were stranded at Reagan for a day-
and-a-half, without, frankly, adequate communication from an
airline.
We had our flights delayed for 2 days, delayed for an hour,
delayed for an hour, delayed for an hour, then at the end of
the day, canceled. It would have been much easier had the
flight been canceled right from the get-go. This was due to the
weather disturbance in Atlanta a couple of weeks ago.
So, as I say, I understand the constraints with which you
run your industry, and it has got to be somewhat gratifying,
given the good financial health you appear to be in, to prove
Warren Buffett wrong. That is a good thing.
When a guy that said the industry was a death trap for
investors is now investing in the airlines, I think that is a
good thing, a lot better than bankrupt airlines.
So, I want to make certain that we can arrive at some
solutions, potentially, today to make the flying experience
better for people like me and my constituents and everybody
across the country, while also maintaining profitability and
operating at full capacity, which has been the goal for quite
some time. There is no other way to run the business.
You can go back to 1978, but in those days, of course,
travel by air was reserved for upper middle income. Today it's
every man's way to travel.
So, having said all of this--and I don't want to focus on--
well, let me start with this--and I will open it up with Mr.
Munoz, and that is, there has been a lot of talk about air
traffic control reform, and since we are operating at full
capacity, which is the best way for the airline to remain
profitable, would air traffic control reform have an effect on
the flying experience?
For instance, my situation, when--when you have got
capacity so constrained and there is one hiccup, whether it is
weather or whether it is crew or whether it is anything, you
are going to have a ripple effect.
Would reforming ATC have an effect, and what kind of an
effect?
Mr. Munoz. It is an incredibly outdated system, as you may
well guess, which led to some of those events. We think it
would have a lot of improvement.
Mr. Kirby just answered a question a few minutes ago. I
would ask him to, just for continuity purposes, I invite him to
answer, as well.
Mr. Kirby. It would lead to dramatic improvement, we
believe, over time, for customers to be able to fly faster and
get to the destination faster, which does put more slack and
more capacity into the system.
It probably would not have--given what happened at a
different airline for that weekend, it probably would not have
had much effect on that, but it would lead to overall
improvement for customers, because we could spend less time
with the airplanes in the air and parked on the ground, and
more time getting the customer there quickly.
Mr. Lewis. If it increases capacity, would you then just--
supply and demand tend to meet--would you just increase loads
again?
Mr. Kirby. Well, it is likely that it would increase flying
at that point, over time, and that, I think, would still be--
that would be really good for customers. As we increase flying,
you know, fares--supply and demand on that side, as supply
tends to go up, fares tend to come down, and we could carry
even more customers every year.
Mr. Lewis. Thank you.
Mr. Jordan, Southwest came out of the airline deregulation,
great success story. There is one thing you do that a number of
the other airlines operating on the a la carte system don't do,
and that is you put the bags within the ticket price.
It seems to me, again, there has been a lot of talk about
stress from this panel today, flying, and one of the stressors
seems to be, in some cases, it takes longer to board the plane
and deplane than it does to get to my destination once we are
in the air, and some critics suggest that is because we have
separated--or the excise tax doesn't apply to baggage when you
separate it out, when you go a la carte.
You haven't gone down that road. Are the critics right? Is
there a problem with boarding? I know we've got zones now and
executives are trying to figure out the best way to board, the
best way to deplane, but that is--it does seem to be a problem,
when you are behind the person that is trying to put their hope
chest in the overhead bins.
Mr. Jordan. Thank you for the question.
Just generally, I think we think what is the best for the
customer, just doing what is right for the customer, is to let
them take a bag for free, bags for free, not charge change
fees, not charge cancellation fees, et cetera, et cetera.
On the operational side, yes, if a customer can check a bag
for free, they are going to check more bags, which that results
in a smaller number of bags that are brought onboard, because
they can check, which allows us to board more efficiently and
allows for the overhead bins to be less crowded.
Mr. Lewis. I see my time is up, but I would like to
continue this at a later date, I hope. Thank you all for
coming. It takes a lot of courage to show up here given the
recent events, and we appreciate it. Thank you.
I yield back.
Mr. Duncan. Thank you very much.
Ms. Esty.
Ms. Esty. Thank you, Mr. Chairman, and thank you for the
endurance of the panel, but our constituents have to endure,
and that is why we are here. You are not just in the
transportation business. You are in the customer service
business, and we have seen some rather noteworthy and
disturbing failures in the last few weeks.
With the bad weather a couple of weeks ago, I had many
calls in my office, and people who see me on the airline every
week, talking about how they had been stranded. I had to help a
passenger who was in a wheelchair, who was left for 3 hours,
just sort of abandoned at a gate, and nobody was keeping track
of her, letting her know what was going on, checking to see
could she get to the bathroom, could she have any help, and
that--on customer service, frankly, no low ticket price makes
up for a miserable experience.
With the consolidations that we are seeing, with four of
the airlines controlling 85 percent of the traffic--when I fly
from Hartford, Connecticut, I don't have a lot of choices, and
that is true for my colleagues, and it is, more importantly,
true for our constituents. They have very little choice.
You are in a near monopoly position, and I think that is
why so many of us are concerned and you are hearing this
linkage to FAA privatization.
If the market were functioning well, this could never have
happened, Mr. Munoz, never have happened, and we know well that
that was a shocking and, thankfully, rare event, we don't want
to see violence on airlines, but unless we figure out a way to
guarantee that customers are coming first, you are going to see
more of that.
My colleague, Richard Blumenthal, is introducing
legislation in the Senate today to deal with raising what those
required offer prices are, putting in new standards, and I know
there has been well drafted--and you know, hats off to the PR
folks who helped you draft the response, belatedly, but you can
understand why we are skeptical that the market is going to
solve it, because it should have prevented this from happening,
and so, genuinely, what kind of assurance can we have that
there shouldn't be legislation in place, that I don't have
constituents telling me about having been diverted to Dulles
because of snow and left on the tarmac for 4 hours, standing in
sight of stairs, and they just sat there, with no update, for 4
hours.
Now, I understand there are snowstorms, but why couldn't
someone roll stairs over? I was getting calls from the plane to
my office, saying can't you do something? We can see the
stairs. No one will tell us what is happening. Then they
started to run out of fuel.
That bespeaks a focus on the bottom line and having lost
the customer.
If the customer is really king or queen, you have forgotten
that.
So, how do we fix this? How do we fix this other than folks
here, folks here having to draft legislation for you to treat
our constituents with the respect and safety that they deserve
on the airlines, with the consolidation that has happened,
because I think it is really important.
You know, we talk about the importance of customers being
able to vote with their dollars. My constituents do not have
that choice.
When I am looking at flights, I don't have that choice. If
I need to go to be here in time for votes, I don't have that
choice. I don't have that, and I can no longer take, like, a 3
o'clock flight and think I am going to get here on time. I have
to back it up, because I can't count on that, and the lost
productivity is billions and billions and billions of dollars
of Americans right now who face the same choice that our
colleagues all face, and say, well, I guess I have got to take
that really early flight, make sure I get there in time, I
might get bumped.
How are we going to fix this? What are you going to do? Not
a press release, but what are you going to do in changing your
policies, among them, can I suggest, I never want to see a
paying customer pulled off a flight to move a crew. You charter
a plane if you need to do it, but that should never happen.
You need to move your crews. I get that. We all get that,
but it should never be at the expense of a paying customer,
ever, and that is going to be the first thing, you know, on a
bill I am signing onto, because that is the ultimate--the
ultimate indication that you have not managed your system well,
and you are asking customers to pay for your failure to manage.
So, genuinely, please come to the table with us and figure
out how we are going to set standards in place and ability to
hold you accountable, and again, I know none of you want to be
here. Frankly, we don't want to be here either.
We want our constituents to be happy. We want them to get
there safely and get home safely on time, and we do, too, but
it has got to be more than press releases. It actually has to
be change and policies and practices and, most importantly,
priorities.
Thank you.
Mr. Duncan. Thank you very much.
Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman, and thank you,
panelists, for being here today and enduring this. Indeed, we
have a lot of controversy about air travel recently and over
the years.
I think a great point was made about sitting on a tarmac in
a plane for several hours. I hope that can be something that
could have a lot more attention to that in the future. I think
some changes have been made, but to be sitting in an airplane
waiting for an undetermined outcome, I would hope they could
find ways to allow people to at least deplane during an unknown
delay like that, but I am a frequent flier, too.
I fly from the west coast to the east coast. It is about a
5-hour, on average, flight, and so, by and large, it goes
pretty well, you know.
I mean, we note that there's 700 million customers that fly
successfully every year, and I think that is pretty remarkable.
We have a very tiny percentage that do have, indeed, some
of the problems that are being talked about here, but what we
also know about flying 35,000 feet or so in the air, you have
zero margin for error, OK, not like a land-based vehicle where
you can just pull over.
You don't just pull over in a plane. I mean, your options
are a little more limited.
So, you have a lot of things you go through to ensure
safety before you take off. We have all sat there when they are
reprogramming the computer, something doesn't quite go right,
they have a mechanical issue they have got to look at, because
you know, I would rather they do than they don't.
You also have constraints from competition to keep your
planes full.
You know, I use a major airline in my travel, and the first
3 months of each year, my direct flight isn't available,
because I don't think the airline can keep the seats full,
therefore--I don't want to lose the flight completely having a
direct, so I have to hop through Denver or Chicago or something
like that for the first 3 months of the year, till the tourist
season comes in.
So, we all get there's economic restraints, and that is
important. As a businessperson, I get that, too.
So, I guess what it gets down to, though, is that we did
have this recent incident here, and you know, legislators, when
they read something in the newspaper, they want to legislate,
and you all are taking your beating here in the committee here
today, and United, especially, and what I have seen United do
is take steps, take remedies towards that, and so, my quick
question down the whole panel is that--and I think I
understood--sorry, I have been in and out of the hearing a
little bit for a competing hearing.
Mr. Munoz, you did mention that you no longer have a policy
of pulling somebody off the airplane, where you did before,
right, that was already seated.
Mr. Munoz. That is correct.
Mr. LaMalfa. That is abolished. OK. For the rest of the
airlines, would you just quickly on that--did you ever have
that or have you since abolished--since this issue?
Ms. Philipovitch. We have recommitted that we will never
remove a seated passenger to accommodate another passenger.
Mr. LaMalfa. Thank you.
Mr. Jordan. For Southwest, same thing. It is our intent to
never involuntarily deny somebody who has already boarded onto
the aircraft.
Mr. Sprague. I am not aware of us having done it at Alaska
Airlines, and same, it is our intent to avoid that situation
altogether.
Mr. LaMalfa. OK. All right. So, I think a very big lesson
learned very graphically on Twitter and video and everything
else, so--I don't always think that there is a legislative
remedy from people that aren't in business that deal with it
day in and day out, so I am not quick to think that legislation
is needed from Washington, DC, on this issue.
I think let's give the airlines a chance to carry that out.
I did go through the United carriage of contract over the
weekend. I had a real slow moment there, and I did not see in
rule 25, denied boarding, anything about pulling people off the
airline.
Was there ever anything in print about pulling them off the
aircraft?
Mr. Munoz. No, sir. That is an internal policy.
Mr. LaMalfa. OK. All right. So, that appears to be in the
past.
So, I think that what we can also do is we can learn from
other people and how they do things, so some of the major
airlines versus some of the not quite as big airlines.
So, what would Alaska Airlines, for example, be able to
impart to United or to Southwest, and what could Alaska
Airlines learn from United or Southwest or American, the bigger
ones versus the more midsize ones? What would you be able to
share with each other on how you would do things?
Let Alaska go first, Mr. Sprague. What is it you would
advise and what would you like to learn from them as a way to
do better?
Mr. Sprague. Thank you, Congressman, for the question, and
I will be a little cautious with my answer, because this is an
industry that has an ability to humble an airline and its
employees in a hurry.
There are a number of things at Alaska Airlines that, even
with some of the customer accolades we have received, that we
need to improve on, and we know that and we are focused on
that.
I think that one thing we have found is that giving our
employees, our customer-facing employees that deal with our
guests every day, as much empowerment as possible--we have a
stated company value to do the right thing, and we believe that
if we empower our employees and we talk to them about empathy
and the Golden Rule that they will do the right thing, and that
usually leads to the best outcome for all involved.
Mr. LaMalfa. I appreciate that.
I will yield back in a second, and also, I had a very good
experience watching a lady at the counter with Southwest when
in Baltimore, during a delay.
She handled things like a pro, but also, she was assertive
enough with obnoxious customers to be able to get the job done
for the rest of us.
So, there is a very talented line that has to be there with
that, and also, Alaska--I like your tail logo the best.
Thank you, Mr. Chairman.
Mr. Duncan. Thank you.
Ms. Frankel.
Ms. Frankel. Thank you, sir.
I want to first thank the panel. You know what, you
probably feel today like a lot of fliers, very claustrophobic
and waiting for something bad to maybe happen. So, thank you
for your patience.
My colleagues have done a very good job, I think, in
pointing out some problems, and I am not going to pile on. I
want to start by thanking the thousands of professional flight
attendants and pilots and the counter people that work in this
industry, who do very good jobs and work very hard, and I think
what we all can agree, that policies and training make a
difference so that they can do their job.
So does having a good civil justice system so people can
have private recourse, and it doesn't hurt to have a good cell
camera when you need one, right?
I am from Florida, south Florida. We had 100 million
visitors last year. Many of them took planes. The airline
industry creates 1.3 million jobs with a $44.5 million payroll
in our State. So, we have to get this right.
I have three questions, and just so that you can answer
them, maybe if one of you would try to answer each of these
questions. I don't need all of you to answer them, OK?
First of all, I would like to know whether the Consumers
Union folks ever meet with you all and you could sit down and
discuss these issues.
Number two, we have talked a lot about overbooking. I would
like to understand what might be the unintended consequences,
if any, and how it would affect especially customers if we did
not allow overbooking.
Then I think a policy that I know really irritates most of
us is the rigid change policies, how expensive it is, and I
don't understand why, in this digital age, they have to be so
rigid.
So, if you want to take a shot at those three questions.
Mr. Munoz. I think United will take the overbooking one,
since we have been answering, and Scott's been doing this. I
will let him do it.
Mr. Kirby. Well, first, Congresswoman, thank you for
thanking our employees, who, you are right, do a phenomenal job
in tough conditions all the time.
On overbooking, we use overbooking to take care of
thousands of customers that we would otherwise not be able to
accommodate.
One of the most common uses is in a situation where someone
has a delayed or canceled flight, and we will then overbook
them, those customers, onto another flight that is currently
booked full.
Ms. Frankel. What is the number of people who are bumped
compared to the number of people who are accommodated because
of the overbooking?
Mr. Kirby. So, we, from an over--most of our oversales,
where we don't--where we can't accommodate customers come from
operational issues, like a weather issue where we can't take a
full load of passengers.
We at United, about 15 percent of the time, when we
actually overbook a flight, do we actually have more customers
show up than are on the airplane, and in that situation, 95.6
percent of the time, we are able to solicit volunteers.
So, it is really unusual that overbooking creates an
involuntary denied boarding, and particularly now that we've
gone up to a $10,000 limit on denied boardings, I think we are
going to be able to drive that number close to zero, but if we
stopped overbooking entirely, there are thousands of customers
that we either couldn't sell a ticket to or that, when there is
an operational disruption, we couldn't give them another option
for how to get home.
Ms. Frankel. Next question.
Ms. Philipovitch. I can take your question about consumer
unions.
As you know, the Department of Transportation has a robust
consumer protection division that oversees airline issues. They
also host a panel with both consumer union members and airlines
to get together to discuss issues, so that is a good way that
we are able to connection.
Mr. McGee. Congresswoman, could I add something to that?
Ms. Frankel. Yeah. But I want to get to the rigid change
policy if somebody could, yeah.
Mr. McGee. Just a quick aside on the issue that has come up
several times, legislation versus self-policing.
It should be noted that, during the tarmac delay
discussions that were so robust a few years ago, I participated
on behalf of Consumers Union at a meeting organized by Senator
Boxer, and every airline in the United States was invited, as
well as the largest airline trade organization, and not one
representative showed up.
For me, that was a turning point for Consumers Union. We
were invited to discuss a serious consumer issue, and they
didn't even come.
The chairman today noted that some of the airlines that
were invited to this hearing didn't come.
So, I think that speaks volume.
Ms. Frankel. On the rigid change, the rigid change policy.
Ms. Philipovitch. I can take that question. I had answered
it earlier, as well.
Airlines offer a variety of products to meet differing
needs of consumers, and some consumers put a priority on buying
the lowest fare and are willing to buy a restricted ticket in
order to get that fare, while other customers know they need
more flexibility and they prefer to buy a nonrefundable fare.
So, the change fee is something that is basically a way to
offer some measure of flexibility when people buy a
nonrefundable ticket.
With the change fee, we do allow some flexibility there.
So, that is the purpose of the change fee.
Ms. Frankel. Thank you, and I yield back.
Mr. Duncan. Thank you very much.
Mr. Woodall.
Mr. Woodall. Thank you, Mr. Chairman.
You know you are having a bad day when the group that is
going to lecture you on customer satisfaction is the United
States Congress, right? That is a low bar to get over.
I just want to see a show of hands. When somebody gets
stuck for 3 hours in the snow in Dulles Airport, whose airline
makes more money because those passengers are trapped out there
on the runway? Nobody does?
Well, let me ask a different question, then. When the
stairs fail to get rolled over to my plane so I can climb down,
which one of you has operational control over that airport and
is preventing those stairs from getting rolled over to my
plane? None of you do?
Well, let me just ask the other question, then. Who is it
that is controlling the airspace there on that runway that is
not letting planes come and go? Is it the profit-seeking
airlines, or is it the consumer-friendly Federal Government
that is controlling those airways?
Can someone help me with that?
I know the answer to this question, and I just cannot
believe that we have been sitting in this hearing, again, as if
we have the customer satisfaction approval ratings to do it,
talking about how if only the Government were to regulate more,
we would do better.
The $1,350 maximum bumped passenger fee that is in DOT regs
today--I am sure folks intended that to be a floor, but it is,
in fact, a ceiling that developed in the industry.
If you can't roll the stairs to your plane, if you can't
take off, just because you want to take off, I want to
understand, if we are in the safest aviation environment we
have ever been in--as we go back historically, have we been in
a safer aviation environment, historically? No.
Well, as we go back, have we been in a more affordable air
travel environment ever in our Nation's history?
So, we are the safest we've ever been, we're the cheapest
we've ever been, and we want to figure out how to do better for
consumers, and we are thinking it might be more Federal
regulation that will do it.
Now, I did a quick back-of-the-envelope count on how many
flights take me back and forth to Georgia each and every day,
and Atlanta is a different case, and I understand that we have
Spirit going back and forth, we have Southwest going back and
forth, American takes us direct, Delta is going back and forth.
We don't have any shortage. About 36 flights a day take
folks back and forth from Atlanta to the region, and
competition sorts out the issues.
Does anyone's airplane model allow me not to purchase a
bigger seat if I would like one? Has anybody eliminated the
larger, more comfortable seats from the model? Nobody on this
panel has done that.
So, we haven't eliminated the larger, more comfortable
seats.
Whose model has added smaller, cheaper seats? Has American
added smaller, cheaper seats in the last 10 years?
Ms. Philipovitch. We have changed density on aircraft in
some cases where we have added seats, but we haven't changed
the size of the seats.
Mr. Woodall. Has Southwest added smaller, cheaper seats?
Mr. Jordan. We have moved to a new seat, but it's actually
wider and a more effective pitch.
Mr. Woodall. I just can't--I just can't understand who it
is on this panel that believes we care more about your
customers than you do.
I will ask my friends from United. Mr. Kirby, you are
crunching the numbers day in and day out. How much has United
been advantaged in this past 3-week episode?
Mr. Kirby. Well, we certainly--this was not--something we
regret, and it didn't help us financially, but it is going to
help us, by the way, be better in the future, because we are
going to learn and be a better airline.
Mr. Woodall. I regret that I spent so much time on my
previous round.
Think about the burdens we place on you. My flight
attendants today say, Rob, we are not even going to pay that
close of attention to whether or not your bag is tucked up
under the seat, whether or not your cell phone has been turned
off, because folks are so angry and passengers are pretty
tough.
We put these responsibilities on you. Every flight I get on
says Federal regulations requires you to follow the flight
attendant's instructions.
Your flight attendants had instructions. Folks don't follow
those instructions.
What is it--what would the enforcement mechanism be if the
Federal Government was not regulating in this place, if it was
not true that Federal regulations require you to follow flight
attendant instructions? What tool would you use to have a rowdy
group of passengers follow your flight attendant instructions,
which we need to do in the name of safety?
Ms. Philipovitch. We appreciate the role that the FAA plays
in ensuring that policies are in place to make our aircraft and
our customers safe.
Mr. Woodall. I don't believe that there is anyone in this
town that cares more about your customers than you do. I don't
believe the lesson of United's experience is that customers
don't matter.
I think the lesson is that customers do matter, and folks
are going to change extraordinarily policies in order to serve
their customer base.
We have never been safer. It has never been easier to get
on an airplane.
I would tell you, Mr. Chairman, the challenges that we face
may not come from the private sector. They may come from right
here on this committee and right down the road on Independence
Avenue.
Mr. Duncan. OK. Thank you very much.
Mr. Payne.
Mr. Payne. Thank you, Mr. Chairman.
You know, I have been listening for the last several hours,
and let me just associate myself with the comments made by my
colleagues on this side of the aisle. So, I won't be
repetitious and browbeat the issue.
We are clear where we are in this regard, and also, let me
state for the record that, you know, I oppose the privatization
of the air traffic controllers.
With that, I have been flying for a while. I am a little
older than I look. Well, that is what I am told, so--I remember
People's Express, who then became Continental, who then became
United, and their hub in my district, Newark Airport, for quite
some time, and so, I have seen the evolution and the
consolidation, and in some ways, it is positive, in other ways
it has been negative, but to me, it appears that Southwest is
really setting the standard here in the industry, and I would
hope that some of the practices of that airline would be
incorporated across the industry.
But with that said, you know, I have had the opportunity to
meet with Mr. Munoz on several occasions, as United has really
given back to the community where its hub there in Newark, New
Jersey, each year, students in my district are interns from
Newark and East Orange and Jersey City, and it's an opportunity
to expose young people to careers in aviation at that airport.
These communities are tremendously appreciative of these
opportunities.
So, I just wanted to put that on the record for my
district.
Mr. Munoz, the incident, you know, obviously, with flight
3411 really has kind of blemished United's reputation, but I am
glad to see your company has responded in the changes that it's
made to create a more positive experience for your customers.
You know, unfortunately, a lot of times--my colleagues on
the other side have talked about regulation, regulation, but
there are, unfortunately, sometimes in the industry, a lot of
things are reactive instead of being proactive, but I am sure,
if it wasn't clear before, this episode has highlighted some
issues that the industry needs to come to grips with.
So, how can Congress, the Department of Transportation, and
the airlines work together to improve the flying experience for
customers, because in the end, that is what we want.
We don't need to sit here and, you know, rehash--we
understand--we know--everyone knows what happened. How can we
all work together to make the experience more positive for
customers, because that is what we want to do as Members of
Congress, as well, help you and help the industry, as well,
make this a positive experience.
Mr. Munoz. Sir, thank you for your comments, and we love
our intern program at EWR [Newark Liberty International
Airport] and have actually expanded that to other places in the
country.
I think--I am new to this industry. I have worked in many
other industries, and I have had many a debate and a discussion
on all of these matters, and I think, at the end of the day, in
open discussion, any more proactive conversation, rather than
reactive, is always helpful to us in business.
The problem with introduced legislation or regulation at
any point in time is that it is so reactive, and it doesn't
really apply to the business needs, and if there is some way we
can do a more open debate and conversation between aisles,
between the different companies, I think it is important.
It is the old how-can-we-all-get-along aspect of that, and
I think it is an important one to note. Just as we govern the
country, as you govern us, I think it is important, but the end
all has to be the customer at the center of the universe for
us, and I think what you have heard from this panel is just
that focus.
Mr. Payne. Thank you.
Chairman, I will yield back.
Mr. Duncan. Thank you very much.
Mrs. Comstock.
Mrs. Comstock. Thank you, Mr. Chairman.
I guess we have gotten to that point in the hearing where
all the questions have been asked but not everyone has asked
them, and also, you know, many of the questions that we have
already heard from, I would associate myself with, and you
know, genuine concern, and really, you know, it was appalling
for everyone to see this, as I think has been expressed, and I
do appreciate, Mr. Munoz, your recognizing that and your very
strong statement on the initial--the whole incident, responses,
and the detailed plans that you have come here to outline for
us, and I hope we will continue that dialogue, and as I heard
Mr. Davis earlier talk about the survey that he took, I hope
you will take into mind, you know, focus groups, surveys, reach
out more to the flying public to hear from them, and in that
regard, this is a little different than some of the questions
we have had before.
I wanted to point out something that we have highlighted in
a working group that we have on women in the workforce and that
studies show--I know it's a little off what we have been
talking about, but studies show that companies with three or
more women in senior management functions scored higher in key
factors of leadership, accountability, and innovation, and more
than companies with no women that are the top, and I know, you
know, when I look in the transportation industry, in general,
and in aviation, it is very male-heavy, and you know, the
boards also are that case.
So, I would ask, as you are looking at this and making
improvements and taking into account all of the things that we
have discussed here today, sort of the diversification of
boards and taking that opportunity, I think technology is
something we can use much more, but also technology that really
takes into account the lives of your flying public.
I recently, you know, was--you know, I go online. I do a
lot of my things online. I was recently flying, and I wasn't
alerted, as I normally would be, that the flight was canceled,
and when we got there, quite a few of us--it wasn't United, so
I won't say who, but quite a few of us were not informed of
this cancellation that had been canceled fairly--you know,
several hours--I could have changed flights.
So, I hope you will have board members who really sort of
understand the on-demand economy, understand the diversity of
the flying public, and the needs, and use technology and
communication to improve, you know, letting people know,
because in the case that I was in, if I had known beforehand,
you know, I might have been able to be that one, OK, no, I will
stay here a little longer, adjust, let me know, and then, also
getting people, you know, when you're there in line and you're
in that frustrating situation, all of us have our devices.
It is a lot easier to do that than be standing in line, and
oftentimes, you just need to have a person there saying go
here, do this, so really having that consumer service mentality
that we have talked about today.
So, I just wanted--maybe all of you could maybe highlight
some of the ways that you are using technology and efforts that
you are making to diversify your management, diversify the
boards, and having who is working in our airlines more
reflective of the flying public.
Mr. Munoz. I will start. With regards to women in the
workforce, I have five sisters and two daughters, and so, I can
tell you that my focus is keen in that regard.
In our organization at United, we probably have one of the
most diverse management teams, certainly in the industry, if
not the country.
Our chief technology officer happens to be a woman, our
chief customer officer, my chief of staff, and so, we are very
cognizant of that.
We have two women board members. Our board in total needs
some work.
Mrs. Comstock. How many? Two out of----
Mr. Munoz. Fifteen.
Mrs. Comstock. OK.
Mr. Munoz. We had a proxy situation, so we have an oversize
board.
With regards to the technology application, that is one of
the most exciting things, and we don't have enough time to
really walk you through it, but I mentioned an in-the-moment
application.
We have rolled out 60,000, 70,000 iPhones with applications
that actually assist our employees assist our customers,
information and data about who is flying, where they are
flying, connections, and now we are going to have an additional
application or a capability that allows you to solve--allows
our front-line folks to solve issues right on the spot.
So, it is a whole broad aspect. I could talk about big data
and personalization and some of the things that we are doing in
the future, but I will yield some time to somebody else that
may want to answer.
Mr. Sprague. Congresswoman, I might just comment on the
Alaska Air Group board of directors. It's 40 percent female and
has other elements of diversity represented on the board, as
well, and we believe we are one of the most diverse boards of
any Fortune 500 company in America. That sort of sets the tone
for us.
I would tell you that our senior officer group at Alaska
does not have quite that same good percentage, but we are
working towards that, because we do recognize the benefits that
you spoke to of having that diversity throughout not just the
leadership of the company but throughout the entire company.
I would also say, on the technology front--I mentioned it
in my prepared testimony, but we have outfitted our entire
customer-facing employee group of flight attendants, as well as
airport customer service agents, with mobile devices, so they
have readily available information on all of our customers, and
importantly, our empowerment tool kit is available to those
airport customer service agents in the moment on that device so
that they can address problems quickly.
Mrs. Comstock. Thank you.
Mr. Jordan. Congresswoman, we all have a long ways to go.
Mr. Duncan. We will have to do that very quickly for the
next two.
Mr. Jordan. I am proud to say that, at Southwest, to just
take a few examples, our CFO, our VP of inflight, diversity,
our controller, our VP/internal audit, our VP/communications,
VP/revenue management, VP/technology--and I could keep going--
are all female, and so, we have got a very targeted activity
there, and not just to increase diversity but because they are
the right people for the right positions.
Ms. Philipovitch. Diversity and inclusion is a core value
at American, and we have a number of females on our senior
leadership team, myself included, and I am proud to represent
American today.
Also have been focused on building diversity within our
leadership team and our board, and to your point about
technology, I wish we had more time to talk about it. We have a
lot of exciting changes coming.
As I mentioned before, service recovery is one of our most
important customer service initiatives, and that really
includes being better able to communicate timely and accurate
information to customers, particularly during disruptions, and
giving both our employees and our customers the tools in order
to provide options and solve problems.
So, we have a number of new pieces of technology coming out
this summer, and I would be glad to tell you more about them
later.
Mrs. Comstock. Thank you, Mr. Chairman, and I would
appreciate having some more along those lines, discussion on
the technology.
Mr. Duncan. Thank you very much.
Mrs. Lawrence.
Mrs. Lawrence. Thank you so much.
To everyone that is here today, thank you for coming.
There is, I feel, a very direct need to address the term
``overbooking.'' It implies lack of efficiency.
You have X amount of seats, and then you have X amount of
customers.
We keep using a term that is automatically perceived as
being inefficient, and I think we need to look at that from a
marketing--you all are in customer service.
I don't want to be overbooked anywhere. When I--when you
take my reservation, I expect for you to honor that. That is
just a whole marketing piece that I think this industry needs
to look at. You need to relabel it or call it something else.
I want to know from the panel that is here--because I have
found every time there is a correction--let's give an example.
We validate the enormous amount of fees on luggage because of
fuel costs, and now we're saying--now I heard today that we are
able to give lower passenger fees, because we charge more for
luggage.
Are we going to now see an increase justified by the fact
that, now, if I take you out of a flight, I will give you up to
$10,000.
So, can I expect a justification for an increase in travel
based on these new policies that you all are touting, because
to give me $10,000 for kicking me off a flight is a lot of
money, because I don't know too many tickets that cost $10,000.
So, am I now going to hear from my customers that the
prices of our plane tickets have gone up as a result of this
enormous response to something that was totally inappropriate?
Then the last thing I want to put--and then you can answer.
I am always so frustrated by the frustrated staff when
there are delays. I have had the counter clerk be so hostile to
the--she says don't ask me any more questions, I am telling you
everything I know, and she or he are overwhelmed, and I had an
example--and it was none of you that's here--where the flight
attendant stopped the line of boarding because he wanted to
take the orders of the first class for their drink orders and
said would you please wait here and stretch for a minute, I
need to take care of them, and backed up the loading.
We need to understand, and some of you seemed a little
frustrated by the questions.
We are customers, myself, all of us, and customer service
is something that--I don't know why Southwest is so darn happy
every time you are on their flight. I don't know what they give
them, happy pills or what, but they're just like happy, come on
in, we are so excited, and then some of them are so uptight,
and I see these flight attendants running to get on a flight
because they are holding the flight for them to get there.
So, please, in the few minutes that's left, those are the
concerns I have, and I would like some answers.
Ms. Philipovitch. We, as leaders of airlines, we own the
morale and the mood of our teams, and we know that, and we
accept that responsibility, and it is our responsibility to
take care of our teams, make sure they know we care about them,
that we have provided the right tools, the right resources, the
right support to deliver----
Mrs. Lawrence. Do you recognize you need to improve in that
area?
Ms. Philipovitch. Absolutely, we recognize that we need to
improve, which is why that we are here today. I apologize if we
have seemed frustrated with questions, because it is really my
honor to come and reiterate American's commitment to serving
our customers well.
Mrs. Lawrence. I am glad to hear that. I am glad to hear
that.
Can someone address--will there be an increase as a result
of this new policy?
Mr. Kirby. No, ma'am, and in fact, we think that, by the
new--not just this policy but the new policies we have put in
place, which really do allow our employees to have the tools to
use their common sense to solve customer problems, by leading
to better customer service, will actually help us and will lead
to a more profitable airline.
We don't view this as a cost or something that is going to
cause us to drive ticket prices up.
Mrs. Lawrence. Mr. McGee.
Mr. McGee. Thank you, Congresswoman.
There has been a lot of talk about cost today, and price,
but I think when we dig down into the weeds on these issues, we
find that there is not always a correlation between an
airline's costs and the fares that they charge.
Just last week the Economist noted that jet fuel prices had
fallen by half since 2014.
The profit per passenger for airlines in Europe is $7.84.
The profit per passenger for airlines in North America is
$22.40, three times more, and they stated, when costs fall,
consumers in America fail to enjoy the benefits. So, you have
hit on a very key issue.
We are told that if we don't check a bag, we are going to
see a lower fare. Well, I didn't check a bag yesterday, and as
I pointed out earlier, on my flight from Bradley International
Airport, it was a $250 differential in 7 hours.
It is very hard to tell consumers that, you know, they are
going to see a lower fare when they do certain things and then
they don't.
Mrs. Lawrence. Thank you all.
I yield back.
Mr. Duncan. Thank you very much.
Mr. Sanford is next.
Mr. Sanford. I tell my boys all the time that life is a
series of course corrections, and what you don't get right in
one day, you may get right the next, and to err is human, and I
guess, with that in mind, you know, what happened on the United
flight was a disaster, just cutting to the chase, and there is
no getting around it, and some of what my colleague, Mrs.
Lawrence from Michigan, just mentioned in terms of the way in
which a passenger is handled at times is equally disastrous,
but I would go back--it was actually Churchill who said never
let a good crisis go to waste.
Rahm Emanuel actually changed just one word in that phrase.
He said never let a serious crisis go to waste, but in essence,
he was paraphrasing Churchill, and what he was getting at is
Government has a tendency, in the wake of any disaster, to
react, at times to overreact, at times to overregulate, and at
times to fight yesterday's battle, and so, what may be
supposedly a remedy turns out yet to produce another
consequence that the people didn't see coming in terms of
higher bag pricing or whatever else, and so, I guess my
question to each one of you all is to follow up on what my
colleague from Georgia was getting at, which is, you know, in
some cases, Government creates some of these problems, given
the conduit that you've got to work through on a daily basis.
If you were to pick three regulations that cause you either
to not give some of the service that the customer would expect
or to price things a bit differently, what would be the three
regulations that you would choose to erase?
Mr. Munoz. I am going to let Scott, who has been in this
industry quite a while, across other airlines--he probably has
a good view on that. I have my own.
Mr. Kirby. I am not sure I would call--they aren't
necessarily regulations.
High on our list would be for our partners at the TSA and
the Customs and Border Protection to have more ability to plan
in the future and respond.
You know, some of our worst--some of our hard customer
experiences at long TSA lines--it has been mentioned by a
number of Members today--and Customs and Border Protection,
where we will have situations where we have hours long backups
at Customs and----
Mr. Sanford. OK, but that is a Government action. I mean,
you punted on my colleague's question, and I want to bore back
down.
Are there a couple of things that Government, you think,
ought to do different from a regulatory standpoint that would
help you to serve customers better?
Mr. Kirby. Well, you know, high on our list would be FAA
privatization, because we believe it would really--that is one
of the biggest thing that we could do to ultimately serve
customers better, because----
Mr. Sanford. OK, but that's a big broad umbrella. I want to
get down in the weeds. Are there three specific, small things
that are pint-sized, measurable, specific, and achievable in
nature that would help you to better serve the customer?
Mr. Jordan. I think one would be just our--the full fare
advertising regulation, just the ability to make it very
transparent, because it includes just the taxes today, but just
to put us all on a level playing field.
Mr. Sanford. OK. That's one.
Ms. Philipovitch. That would be one that I had on my list,
as well. We don't have the ability to----
Mr. Sanford. OK. I've got that. That's one.
Ms. Philipovitch. Then also just regulation around GDS, the
global distribution systems, in how we display and sell our
products--relaxation there would be helpful.
Mr. Sanford. OK. We are at two.
Mr. Munoz. Sir, I would add in--we talked about the
carriage and the charter and the thick documents. I think that
Chairman Shuster is correct. A lot of that verbiage is driven
by things that have happened in these rooms, and as we move to
a more streamlined approach, it would be helpful to be able to
work back and forth on how we can reduce some of that density.
Mr. Sanford. You're general. Could you be more specific?
Mr. Munoz. You all place a lot of stuff on us.
Mr. Sanford. Like what? I am trying to get to three.
Mr. Munoz. I haven't been in the business long enough to
understand, but I know it from other----
Mr. Kirby. Well, I agree the consumer-facing rules are the
ones that are most frustrating for us, because we feel like we
are not adequately--there's a number of rules within
advertising where we would like to actually more clearly
communicate to customers, and we would like our partners who
sell tickets, people like Expedia, to clearly communicate to
customers, and there's a host of specific rules in there. I
don't know the specific--exact rules now, but we just have a
whole set--similar to what my two colleagues referred to--of
rules we have a bunch of requirements to communicate to
consumers, and we wind up confusing the issue. We would much
prefer clear communication.
Mr. Sanford. Mr. McGee, would you see that from a different
vantage point? Again, I am trying to get really specific.
I just saw a note passed to Mr. Jordan. Did you have a good
one that he just handed you? Then I will come to you, Mr.
McGee. My staff does that to me, so I get it.
Mr. Jordan. Yeah, this is an old one, revenue diversion, so
taxes and fees should stay within the aviation system.
Mr. Sanford. Yes, sir, Mr. McGee. I'm sorry.
Mr. McGee. Thank you, Congressman.
We have just heard from several airlines that they are
looking for less regulation on fares and fees and how that is
translated to consumers.
From our perspective, yes, we have an absolutely different
perspective.
The airlines are the ones that are imposing these ancillary
fees. They say they are optional, but as has been pointed out
here today, for many people, not taking a suitcase is not an
option, it is necessary, and yet the transparency on getting a
full and complete fare, inclusive of mandatory taxes and fees
that we all have to pay, and ancillary fees that the airlines
impose at their will--that has become more cumbersome and more
difficult from a consumer perspective both on airlines' own
branded websites and on third-party sites than it's been.
Mr. Sanford. Thank you.
I see I have gone over my time. Thank you, Mr. Chairman.
Mr. Duncan. I am required to call a 5-minute recess at this
point, 5 minutes.
[Recess]
Mr. Duncan. Let's go ahead and have the witnesses and
others take their seats, and we will go at this time to Mr.
Nolan.
Mr. Nolan is next.
Mr. Nolan. Thank you, Mr. Chairman, and I want to thank all
the witnesses for being here and being candid and
straightforward, and I am particularly grateful for your
assurances that what has happened to some passengers in recent
weeks and months and other times when they didn't necessarily
get recorded on video--we appreciate your assurances that that
will never happen again, and I am sure everybody in the country
will be watching to make sure that those assurances are
fulfilled, and we are grateful and thank you for that.
I am going to just, quickly as I can, relate a recent
incident, and then ask you to respond. My colleague,
Congressman Lewis, and I were at the airport a couple weeks ago
on a Thursday, and because of weather, our flight was delayed
and delayed and then delayed again and delayed again, and
nobody was able to get any opportunity to discuss with anybody
on the airline any alternatives that might be made available.
Our distinguished acting chairman, Mr. Duncan, pointed out
that, some years ago, people in Russia had to wait as many as 4
days to get an alternate flight. Well, that is exactly what
happened to us here in our Nation's Capital.
After the flight was finally canceled--again, no
opportunity to talk with anybody to get any information about
anything, nobody offering compensation for hotels or food, or
nobody offering to put anyone on another airline--everybody was
just unilaterally informed that they wouldn't be able to get a
flight out until the following Monday, and of course, it was
Cherry Blossom Festival, and hotels are running $500 or $600 a
night, and needless to say, there was a lot of very upset
people, and understandably so.
Mr. Lewis and I were able to get a couple of tickets to a
nearby city, and through a number of efforts, including my
granddaughter, able to get back home, but there was--because
the airline was overbooked in every flight, there was no place
in America we could fly to and catch a connecting flight to get
back to Minneapolis, Minnesota. I never would have believed
that was possible. For crying out loud, we could have flown to
London and back and, you know, gotten home in a timely manner.
So, my question of each of you--and I know we have only got
5 minutes here, but what kind of policy does each of you have
for compensation for people that are caught in those
circumstances?
I understand weather caused the initial--but you know, can
we extend the cause of weather to the second day, the third
day, the fourth day, the fifth day? I mean, what kind of
compensation do you offer--what kind of alternatives do you
offer for other airlines, and what kind of communications do
you offer to your customers in a situation like that, which is
so troubling and confusing and difficult for so many airline
passengers?
Please.
Mr. Kirby. Thank you, Congressman, and I hope that wasn't
United. I think it probably wasn't, but----
Mr. Nolan. It wasn't one of the airlines who is represented
here today.
Mr. Kirby. It was Minneapolis, so I guess I know who it
was.
Mr. Nolan. Yeah.
Mr. Kirby. At United, those follow-on cancellations--our
policies will be to take care of the customers and treat them
as if they are cancellations that are caused by us, and so, to
try to provide accommodations in follow-on cancellations that
are occurring.
Mr. Nolan. Would you put them on another airline?
Mr. Kirby. We put several hundred thousand people on other
airlines, and in those situations, our focus in any of those
situations is to take care of the customer first. Our operating
people are not concerned with a P&L. They are focused on taking
care of the customers.
Mr. Nolan. All right. Thank you, Mr. Kirby.
Mr. Sprague. The same, Congressman. One thing I would add
to your question is communication is incredibly important in
those situations, and so, we have minimum guidelines for
intervals between communication updates that we ask our staff
to adhere to, and we have also started asking our captains, who
we know our customers have deep respect for, in certain
irregular operation situations, to also provide an update.
Mr. Jordan. Congressman, really, the same thing. We treat
those follow-on cancellations the same way. We provide vouchers
for hotels and meals and those kinds of things, but the desire
is constantly to take care of the customer.
Ms. Philipovitch. Likewise for us at American, and as I
have mentioned before, service recovery is really one of our
top priorities, and I think your experience is illustrative of
the importance of that, and when we get into irregular
operations, making sure not only that we are communicating with
customers but we are providing options and providing
compensation, so that is something that will always be our
focus, as well.
Mr. Nolan. Mr. McGee?
Mr. McGee. Thank you, Congressman.
Your joke about flying to London and back may not have been
as absurd as you would think, because 2 years ago, I was on a
Delta Airlines flight, of course a U.S. carrier, out of
Brussels. There was a mechanical delay for 4 hours. It was
handled beautifully, it was textbook, and my companion said how
would you rate Delta in how they have handled this, and I said
A-plus, but then I pointed out that had the exact same delay,
the same mechanical problem, same aircraft, same crew, occurred
not in Brussels but in Atlanta, Delta's hometown, the results
would have been very different.
The reason was that we were flying on a U.S. airline and
the reason we were treated the way we were and it was handled
so beautifully, with the meal vouchers, with the updates, with
accommodations, was because the EU rules were in effect, even
for foreign airlines in the EU, and when left to their own
devices, unfortunately, situations like yours are not as rare
as we would hope.
Mr. Nolan. Thank you, Mr. Chairman. I yield the balance of
my time.
Mr. Duncan. Thank you very much.
Mr. Katko.
Mr. Katko. Thank you, Mr. Chairman, and I thank everybody
on the panel for your testimony. I know you've been here for
quite a while, and it's almost over, so hang in there.
I was just thinking back to when I first started traveling,
back in the 1980s, on airlines, and just how much has changed
since that time, and I just wanted to kind of highlight a few
things and then ask you a few questions.
Reservations. It is very difficult to get a human being,
many times, calling airlines nowadays, whereas before it was
very easy, and there is much more you have to go online for.
Food. You used to have a decent meal. It got to a snack,
and now it's nonexistent on many flights.
Seats. I am 6 feet 3 inches. I am not the tallest guy in
the world, but it oftentimes where I can't even sit up straight
in the seat, I have to stick my legs out in the aisle, because
the seats are so crammed together. The comfort of them is very
difficult.
The baggage fees.
The overbooking, which we have talked about.
Frequent flier miles. There was a time when you had
frequent flier miles where you could actually use them and you
could take a short flight or a flight somewhere and it was a
set amount. Now, the miles are getting less and less powerful
and less and less able to be used.
Flight cancellations. Planes sitting on runways for hours.
You know, lack of instructions or information when people are
sitting at the gates or sitting in airplanes as to what is
going on, and frustration just searching for tickets online or
trying to figure out what a ticket price should be.
You come to a conclusion after all this--and I understand
what the shakeup has been in the industry in the last several
decades, but it really has come to this culture to basically
commoditizing the passenger, and this culture seems to be one
of indifference towards the passengers at times, and I looked
at--when I was sitting here, just out of curiosity, to see how
the airlines are doing, and you can correct me if I am wrong,
but this is what I pulled up on Google.
United made a profit of $2.9 billion this year or last
year. American, $2.7 billion. Southwest, $2.24 billion. Alaska
Airlines, $911 million. So, you are doing good.
Now, I understand there were times when you weren't doing
good, I understand that that is business, but now that you have
this financial stability again--and you know the next crisis
could be right around the corner, but now that you do, you
know, I started thinking about the changes you announced today,
and let's face it, and let's be honest with ourselves, you
wouldn't be here announcing some of the changes were it not for
reacting to a situation.
I am wondering if any of you, any of these airlines, have
taken a step back to really look at what has happened to the
culture of service and the culture of making it a much more
pleasant experience.
I think one of my colleagues on the Democratic side tells
you basically how much of a hassle it is to fly. It is no
longer pleasant to fly. There was a time when it was. It is no
longer there.
So, do any of you ever take a look at the big picture? I
don't want to hear about small programs here and there. Do you
ever take a look and involve passengers in trying to think
about how to make it a better experience and not wait for
instances like this to happen with United or what happened with
American, maybe stop and think and look back and say, OK, how
can we get back to a time where there was more--passengers were
treated with more appreciation, passengers were treated with
more professionalism, and the overall experience was far more
pleasant, because I can tell you, you know, I fly American a
lot, and it is a fine airline, it gets me where I need to be,
but it is not pleasant. It is hard.
You can't even be comfortable in the seat when you sit
down, and you are paying hundreds and hundreds of dollars for a
ticket. That is difficult for me, and I think that that is a
larger problem, and again, you are reacting.
I am asking you--don't react. Take a step back and look at
the larger picture.
So, if anyone wants to respond to that, I will be happy to
listen.
Ms. Philipovitch. Well, Congressman, first of all, thank
you for choosing American for your travels. We appreciate that.
I think that the recent incidents certainly have put us in
the spotlight and, as you said, are the reasons that we are
here today, but the fact of the matter is that we have been
focusing on improving our customer experience ever since we
have had the financial wherewithal to do that.
As you noted, we are kind of, in the last few years, coming
out of a time of decades of turmoil, and I think what we lost
during that time was, while we were changing our business
model, in ways that, as you noted, were not always popular for
customers, and really just trying to survive, that was the time
when other industries were really investing to form more
customer centric cultures, and so, our customers' expectations
are not only formed by the experiences they have with us but
also experiences they have with other industries, and we know
that we have some catching up to do. We are very focused on
that.
As we noted in the opening remarks, American is investing
billions of dollars in new aircraft, new product and amenities
for customers. We are investing in service training for our
people. We are adding team members. We are growing service, and
alongside of that all, we have significant efforts invested
across our leadership team in finding ways that we can do
better for our team members and do better for our customers.
So, you have our commitment. We are gratified to see
customer satisfaction scores improving, and we will continue to
work towards that goal.
Mr. Katko. Thank you very much.
Mr. Duncan. Thank you.
Ms. Wilson.
Ms. Wilson. Thank you.
Let me welcome everyone here today. I am an American
Airlines traveler. I travel American Airlines twice per week,
every Monday or Friday or Tuesday or Thursday, I am on an
American Airlines plane, and I just want to sum up what I see
happening.
It seems to me as if this whole scenario is like sororities
and fraternities, and you have people hazing all the time, and
everyone who is in charge of these sororities and fraternities
know that this hazing is going on, but no one does anything to
stop the hazing until one day it is exposed on social media,
and when it is exposed on social media over and over again,
then panic reigns throughout the industry and throughout the
whole Nation that this is what is happening on our airplanes
today and this is what is happening in airlines.
So, I am just wondering if now, all of the sudden, we have
had these difference scenarios where we see customer service
just breaking down, everyone is going to be trained now. We are
going to start training.
Well, what was happening prior to this incident becoming
such a publicity phenomenon? Are you connected at all with a
university or someone to train your employees the day they are
hired, or is this something you hire and put them to work
without any training, and then you wait 6 months, until you
have maybe 30 people, and then you train all of them?
Explain to me--I would like for each of you to explain to
me, especially American and United--explain to me how the
training process takes place for new employees coming in, and I
have some real reservations about the baby with the stroller.
I have four little grandchildren, and whose responsibility
is it to stop a lady from getting on a plane with a stroller?
Isn't there someone there at the door to say let us take
this stroller, because it can't get on the plane, and whose
decision is it, and how did you make the decision? How did you
make the decision that this gentleman should be the one to be
removed from the plane, and he was traveling with his wife.
So, was she not a part of the equation? You were just going
to separate him?
I couldn't get my arms around what was going on. Those are
the two things that slapped me in the face from TV. So, help me
with this, in this frat house.
Ms. Philipovitch. First, I just want to take the
opportunity to apologize for what you saw onboard the American
flight from San Francisco to Dallas with our customer and her
stroller.
We did not handle that situation as it should have been
handled, and we take responsibility for that.
To your question of who should--we should have helped her
to gate check her stroller before she brought it onboard. The
fact of the matter is the aircraft that she was boarding didn't
have storage capacity for it, and so, that should have been
resolved before she got in the aircraft door, and we are taking
steps to make sure, in the future, we do better.
To your question about training, all of our employees work
in safety-critical jobs, and so, they absolutely receive
training before they start working at American. Nobody starts
doing their job without receiving training.
Our initial training for customer-facing employees does
include some measure of customer service training and training
how to deescalate complicated situations, but we know that we
need to provide that training more effectively and more
frequently, and we are working to do that.
Ms. Wilson. Thank you.
Mr. Munoz. I would echo the same sentiments on training.
With regards to your specific question with regards to how
Dr. Dao was--Dr. Dao and his wife were selected as a couple, so
we weren't going to----
Ms. Wilson. Were they both ejected?
Mr. Munoz. Yes. They were both selected for de-boarding.
Ms. Wilson. Did she leave the plane?
Mr. Munoz. She did with Dr. Dao, eventually, and with
regards to how they were selected, it is an automatic system
that simply applies some logic to the fact that the fare that
you paid--how much you paid for the ticket--and your status as
a Mileage Plus member, across other dimensions--those are the
two basic ones that we work through.
Ms. Wilson. Let me see. In the last 5 years, has anyone
ever been ejected from your airlines for other than security or
health reasons, physically, any of you?
Mr. Munoz. There are instances, more often than we would
care, with regards to--well, for safety and security. With
regards to the specific process with Dr. Dao and his wife, we
can't remember a time when that happened. So, it was an
incident that was one----
Ms. Wilson. What about Southwest or----
Mr. Jordan. I don't know specifically. My guess is very
few, if any, but with the exception of just safety and security
reasons, no.
Ms. Wilson. American?
Ms. Philipovitch. I am not aware of anybody being
physically removed from a plane other than for a safety or
security reason.
Ms. Wilson. Alaska?
Mr. Sprague. The same.
Ms. Wilson. OK. And thank you for flying American.
Mr. Duncan. We are getting very close to a vote. So, Mr.
Rokita, please.
Mr. Rokita. I thank the chair, and I thank the witnesses
for hanging in there. I appreciate--it looks like I am the last
one. I hope I didn't jinx us.
I had some other hearings and whatnot going on this
morning, so I couldn't be here in person, but I watched a lot
of this on the closed circuit TV and C-SPAN, and I felt I
wanted to come down here, because I think your flight
attendants, I think your employees, generally, ought to be
commended.
I think that you generally do a great job. I do fly a lot,
in this job and doing other things, and I appreciate the
attention to safety, number one, which is why a flight
attendant is there, let's not forget, and the attention to
detail that your employees generally provide, and I commend
United and Southwest for--and perhaps other airlines--for what
they have learned from this incident that did go viral.
You know, I think the response has been appropriate, and I
appreciate each of your leadership in that regard.
I also wanted to say that this is a bit of a two-way
street. I mean, what happened on that United flight shouldn't
have escalated to where it was, and it has been acknowledged,
and steps have been taken, but a grown man assumedly saying,
when approached by law enforcement on an aircraft, should abide
by the request being made, and I do not know that that, Mr.
Chairman, has been said in this hearing, or generally in the
conversation, so I wanted to make a record of that, because it
deserves to be said.
Mr. McGee, in your testimony, from what I read, you
proposed to put the risk of overbooking on the air carrier, and
I do not think that has been discussed here yet in much detail.
Can you, within 30 seconds or a minute, go into more detail
on that proposal?
Mr. McGee. Certainly, Congressman. What we are saying is
that there should only be voluntary denied boardings----
Mr. Rokita. OK.
Mr. McGee [continuing]. Not involuntary denied boardings.
From our perspective, we don't really see a downside to a
passenger being offered compensation to take a later flight. I
have done it myself with my son.
You know, from a passenger perspective, that is fine, but
we have called today, and in my opening remarks, I said----
Mr. Rokita. What happens in a situation--and I am not
trying to be argumentative with you. I am just trying to
respect the time here, so we can all get on votes and lunch and
whatnot, and bathrooms, for that matter. What happens when no
one volunteers?
Mr. McGee. The compensation is raised.
Mr. Rokita. Theoretically, if that doesn't happen--like it
was going to be happening on United, off that United flight. I
mean, the plane just doesn't move at the end of the day.
Mr. McGee. Well, United has said now there is an offer of
$10,000. I mean, statistically, if 100 people are offered
$10,000, I have a feeling there is going to be an empty seat
pretty quickly.
Mr. Rokita. OK. I guess. Maybe. Maybe not. I don't know. I
just didn't know if you had any data around that or if you had
a fail-safe measure if you got to that point. I guess the plane
just doesn't move, right?
Mr. McGee. Unfortunately, a lot of this is opaque. We are
still not clear, just as we were talking about transparency
with fares, we are still not clear, although we have--you know,
it has been asked several times--about those algorithms of how
people are selected.
Mr. Rokita. Fair enough.
Mr. Munoz, regarding denying passengers boarding or
removing them from seats or whatever, involuntary or otherwise,
what is the trendline? Is this a growing problem or something
you feel the airline--or the industry, I should say--has a
handle on?
Mr. Munoz. I am not exactly sure of the industry trends,
but I obviously have watched and monitored ours as a regular
course.
Our involuntary denied boardings, year over year, have
dropped 44 percent as we operate more reliably, invest in the
business, and so on, and in fact, it is 1 in 23,000 that
actually get affected by this, and so--and that involuntary
denied boarding is often, if not a majority of the time, caused
by more operational issues, not necessarily this oversold
conversation.
Mr. Rokita. Do you have percentages on that? You say more
often than not. I don't know if there are statistics around
that or not.
Mr. Munoz. Scott was looking at this.
Mr. Kirby. We don't have exact statistics, but roughly two-
thirds of our involuntary denied boardings come from
operational.
Mr. Rokita. And by operational, you mean--could that be
anything from mechanical to weather to----
Mr. Kirby. It is almost always--weather is the biggest, and
the second one is we have an aircraft downgrade, which is
usually--can be because of weather or because of mechanical.
Mr. Rokita. An aircraft downgrade meaning less seats of
some sort?
Mr. Kirby. Fewer seats on the airplane.
Mr. Rokita. That would occur because the original airplane
had a mechanical----
Mr. Kirby. Either a mechanical or it has got weather in a
station and hasn't made it back to where it needs to be to fly
its next flight.
Mr. Rokita. OK. Again, I thank the witnesses, I thank your
employees, and I would be very hesitant, Mr. Chairman, to have
this committee go down an avenue of regulating this, and I, in
that vein, would associate with the comments that former
Governor Sanford made. I yield back.
Mr. Duncan. Well, thank you very much, and I am going to
turn the chair back over to Chairman Shuster, but before I do,
I do want to say that, for one, really appreciate what I
consider to be significant actions taken by all of the airlines
in regard to these unfortunate incidents that have happened.
Thank you very much, and Chairman Shuster is back.
Mr. Shuster. The gentleman from Oregon is recognized.
Mr. DeFazio. Thank you, Mr. Chairman.
Mr. Kirby, I want to get something straight. When you were
asked by Mr. Cohen about--you were saying you had films of
evacuation drills. The last time I am aware of a physical
evacuation drill was the certification of the 777, and it is
done by the FAA.
Your airline doesn't do evacuation testing on the planes.
Mr. Kirby. Yes, sir, we do.
Mr. DeFazio. You do.
Mr. Kirby. We do do evacuation testing.
Mr. DeFazio. Physically. You load a plane up and you get
everybody off in 90 seconds, because he also said 3 minutes,
and I understand the standard is 90 seconds.
Mr. Kirby. Yeah. We do evacuation testing. We do it in
concert with the FAA, but we actually do the testing.
Mr. DeFazio. OK. That is interesting, because that's not
our impression. So, I would like to follow up on that. I would
love to--because I have always wanted to watch one of these
drills.
Now, Dan Reed, in Forbes, pointed to something that I think
is fairly obvious that we haven't discussed here in terms of
performance, and that is that everybody wants to schedule their
planes to take off and land at the same time, and the FAA just
says sure, fine, whatever you want to do. There are no rules.
I mean, for instance, I just looked. There are 17 flights
scheduled at Chicago O'Hare at 12:15.
Now, can 17 planes take off in 1 minute?
Mr. Kirby. At O'Hare, about five, on five parallel runways,
and we schedule--at United, we call it sloping the schedule.
Mr. DeFazio. What I am getting at--so, what Mr. Reed, who
is an advocate of privatization, says--he says don't
overpromise, and he says, you know, only airlines can make
their planes back off their gates in the right order, right
times, reduce congestion in airport taxiways. They can only
schedule flights in such a way they're neither delay-prone nor
excessively long.
Now, you talked about RNAV versus radar, and I, you know,
again, looked on Flight Aware and looked at a bunch of your
planes that are in the air now, and they are all doing climb-
outs, straight lines, long distances.
For instance--this is just one of many I saw--Houston to
San Francisco, it's flying an RNAV GPS-based departure route.
It climbed directly to its cruise altitude. It is flying a
straight-line GPS-based route called the Q route and then
descending into SFO using RNAV, GPS-based arrival routing.
So, what percent of your flights--your mainline flights--I
am not talking about United Express--are using RNAV now and
GPS-based?
Mr. Kirby. I am not sure, Congressman.
Mr. DeFazio. OK, but there are----
Mr. Kirby. There are some RNAV routings.
Mr. DeFazio. Right, because you were talking about the
zigzags. I mean, again, just in looking at this, I mean, it
seems to me the most frequent cause of that now is inadequate
capacity.
For instance, everybody wants to land about the same time,
and so, then you've got to start flying zigzags to get there on
a radar approach versus, you know, using RNAV, because you just
can't land more than one plane at a time when you have only got
one runway or two planes if there is enough separation.
I recommend the article to you, because I mean, I know you
are advocating privatization and others advocating it, but you
really should read this article, and he says don't overpromise,
and he is particularly, you know, critical of Mr. Cohn.
Mr. McGee, do you have any comments along those lines? I
mean, right now, we are hearing about customer issues. We are
hearing about concentration of the industry, very little choice
for people, particularly in the 55 or so airports that are 1
and 150 that are 50 percent more than 1 airline.
So, the question would be, now, if we give control of the
air traffic system to the airlines, effective control, 4 seats
on a 13-person board, what do you think that means for
customers and efficiency?
Mr. McGee. Well, it is going to be particularly hard felt
in the high-density airports and the busiest airports in the
country.
Now, I mean, what you just said is obviously a critical
enough issue, 17 flights scheduled at the same time, but
underlining that is another problem that hasn't been really
discussed and that is the outsourcing--and it is outsourcing,
the airlines call it partnering, but outsourcing of mainline
flights to regional carriers.
Up until recently--I don't know if it is still on there,
but the Regional Airline Association, on its home page, boasted
about the fact that not only are more than 50 percent of all
domestic departures operated by regionals on behalf of major
carriers, but in addition, they boasted of the fact that most
of the departures every morning between New York and
Washington, two of the busiest airports not just in the country
but on the planet, LaGuardia and Washington National, are
operated by regionals.
So, we have to ask ourselves, is that the best use of those
slots to use smaller aircraft on some of the----
Mr. DeFazio. So, you are saying that, just because it is--
you have got a small aircraft, and basically maybe you can
follow it a tiny bit more closely, a little bit more closely,
but--because of wake turbulence, but you are taking up
basically a slot with 60 people onboard versus a slot with 180
people onboard.
Mr. McGee. Absolutely. I am rusty on some of these issues.
It has been a long time since I worked as an airline
dispatcher, but the bottom line is that, you know, as they used
to say, you know, all metal requires X amount of space between
it.
So, whether it is a large aircraft or a small aircraft--
there are differences with wake turbulence and things like
that, but the bottom line is, again, are we using--these are
public resources, let's remember. These are not airline
resources, the slots. They belong to the public.
They are treated as if they were private domain, but are we
using them to the best ability, you know, in many ways, not
just in terms of safety and efficiency but also in terms of the
carbon footprint.
Mr. DeFazio. Just one last observation from the Bureau of
Transportation Statistics. On time in 2016, 81.42 percent. Air
carrier-caused delays, 5 percent. Weather delays, .5 percent.
National Aviation System delay, 5 percent, same as triggered by
air carriers. Security delay, .03 percent. We are doing a
little better there. Aircraft arriving late not due to the
National Air System, 6.22 percent. Canceled, 1.17 percent.
So, I mean, again, let's talk about the reality of what the
problems are with the system, and I think that was a very good
point you made, which is if you substitute regional carriers
and they need two or three planes to land the same number of
people and it is SFO or it is here at National, then we have
just used up a lot of airspace, and they are all trying to land
at the same time anyway.
Mr. McGee. I think we also want to ask, well, why would
they do that?
Now, the response often comes from the airlines that
customers prefer high frequency, you know, to consolidating
flights, but there is also another factor that doesn't get
discussed as much, and that is the competition factor. In other
words, if you have scarce slots at LaGuardia and you are trying
to, you know, prevent the competition from low-cost carriers,
then, you know, you use more frequencies out of those airports,
and again, these are the most high-density airports that we are
talking about.
Mr. DeFazio. I would congratulate United. They brought back
real United to Eugene, and the flights actually go, versus fake
United, United Express, where we had seven flights a day but
not so dependable, because they are the first thing canceled
when Chicago fogs in or delayed, whereas your mainline flights
aren't.
So, we have now three flights a day, and people, I think,
are much happier with three, as opposed to, theoretically,
seven with these commuter airlines.
Thank you, Mr. Chairman.
Mr. Shuster. Thank you, Mr. DeFazio.
Again, I appreciate our witnesses being here today, but I
have a couple of final questions.
One--and we talked about this a little bit earlier--
contracts of carriage. I think Mr. Sprague said your goal is to
get to one page.
Is that like an executive summary, because I can't imagine,
with all the legalities, with all the things that swirl out
there, that you could actually get to one page. So, can you
tell me, can you really get to one page?
Mr. Sprague. I think, Mr. Chairman, the one-page objective
was offered by one of the committee members, but what we did
commit to at Alaska Airlines is, firstly, acknowledging that
ours is too long. We do want it to be a usable document for our
customers. So, getting to a much more concise summary or
contract of carriage.
Mr. Shuster. I appreciate that, but is my observation
correct--anybody, yes or no, disagree with me? Part of the
reason it is so long is because of the litigious society we
live in today, so you are trying to cover everything from A to
Z just in case. Is that a fair observation? Just a yes or no.
Mr. Munoz. That is a fair observation, and there was a
reference to the EU, and I think the legal system in the EU is
drastically different than the U.S.
Mr. Shuster. Very different. In many places, it is.
Mr. Sprague. It is a fair observation.
Mr. Jordan. Yes, sir, that's correct.
Ms. Philipovitch. Agreed.
Mr. Shuster. Mr. McGee, what are your thoughts?
Mr. McGee. Well, again, I think, you know, when you held
up--it is very visual, when you held up documents that are 78
pages long. There is no question that there--you know, that
there are litigation issues here, but that really doesn't speak
to the fact that they are so hard for consumers to read.
I have researched this and written articles for Consumer
Reports where I have spoken to aviation attorneys, and I have
said, look, I am reading a clause to you, because I genuinely
can't figure it out, I am not an attorney, and I have said I am
going to read you a clause, and they have said I am not sure, I
am not sure myself, and those are attorneys who work in the
aviation industry. So, what hope do the rest of us have, even
assuming we do the due diligence and read it in the first
place? So, there is no question that there are issues here.
Mr. Shuster. I don't take issue. I agree with Mr. DeFazio,
they are way too long. I just--for me to fathom they can get
down to one or two pages is just unbelievable to me.
Finally----
Mr. McGee. Actually, if you don't mind, Mr. Chairman, you
mentioned an executive summary. That may not be a bad idea in
some cases, to at least have a brief two-page thing saying,
well, you know, here are the most frequently asked questions,
that type of thing.
Mr. Shuster. Sure. I get that.
Mr. McGee. Thank you.
Mr. Shuster. Finally, just another observation I would like
to make, because there has been some talk--I am glad the focus
of this hearing was on customer and, you know, what you folks
are doing to make sure we treat them better, fair, but there
were some things brought up about forming an out-of-government,
not-for-profit corporation, and it is my view that when we talk
about all the congestion we see on the ground, if we make the
system more efficient and drive down costs, that gives
everybody more money to spend on taking care of those problems,
because--airport runways, not having enough of them, not having
spaces, not having the places to pull planes off--that all
costs money, and if we have a robust, profitable industry and
the Government is able to drive down its cost, everybody
benefits by that. So, that is kind of where we are going with
my proposal, is let's have as efficient a system as we can,
everybody saves money, and also, if we look at the airline
industry over the last--I think Warren Buffett said--somebody
said the airline industry is in the hole over the last 30
years, and Warren Buffett said the airline industry has 80 bad
years.
I mean, you are finally getting to a place where you are
making money, so from our standpoint up here, we expect to see
some of those profits driven back into the company to make sure
the customer experience is better, because as I said in my
remarks before I left--I am glad I got back here in time. I am
just going to reiterate them.
If you don't take this as a silver lining, if the industry
doesn't sit down together, collectively, and figure out how to
move forward in a positive way, put aside your marketplace
differences where you do what you have to do, but come
together, because the last thing in the world you will want is
this committee and this Congress to put out things out there
that, as I said, it's going to be one size fits all, and it is
not going to fit anybody at the end of the day.
So, again, I appreciate you being here, I appreciate you
taking the time, and we look forward to hearing from you and
watching as you move down the road and watch these things take
hold.
So, thank you very much, and with that, I ask unanimous
consent that the record of today's hearing remain open until
such time as our witnesses have provided answers to any
questions that may be submitted to them in writing and
unanimous consent that the record remain open for 15 days for
any additional comments, information submitted by Members or
witnesses to be included in the record of today's hearing.
Without objection, so ordered.
Once again, I want to thank everybody for being here today.
Thank you so much.
Adjourned.
[Whereupon, at 1:54 p.m., the committee was adjourned.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]