Skift Take

The DOT is taking a tougher enforcement tack on travel agents' codeshare disclosure violations just as there is a changing of the guard looming at the top of the department. Coincidence? We doubt it. But, making codeshares more transparent is long overdue.

Traditional travel agencies, in particular, as well as online travel agencies, have been feeling some heat in recent weeks over improper disclosure, and even nondisclosure, of domestic codeshare flights, which have risen dramatically in recent years.

In fact, the DOT’s Office of Inspector General recently randomly phoned 16 traditional travel agents, asked them to identify the operating carrier involved in a codeshare, and 14 of the 16 failed to disclose or misidentified the operator of the codeshare flight.

It gets worse.

“In most of those cases, the travel agents actually provided incorrect information regarding which carrier was operating the flight,” the Inspector General’s February audit of domestic codeshares states.

Offline travel agents are required to inform travelers orally before they book a flight, and also in their written itineraries, which carrier is operating a codeshare flight.

Colgan Air crash

Much of the focus on codeshares grew out the 2009 crash of a Colgan Air jet near Buffalo, New York. Fifty people, including one person on the ground, died in the crash of the Bombardier Dash 8-Q400 turboprop, which was being operated on behalf of Continental Airlines as a Continental Connection flight.

The Inspector General notes that neither the DOT or FAA are required to review domestic codeshare agreements, which have been rising dramatically. The percentage of flights in 2011 marketed as American, Delta, United and US Airways, but operated by regional carriers under domestic codeshare agreements, was 61%, the audit says. That percentage was 40% in 2000. (Southwest and AirTran don’t operate domestic codeshares.)

The Inspector General recommended that the DOT crack down on traditional travel agents — or in the Inspector General’s parlance, “increase sampling of travel agents for codshare disclosure” — and that effort is under way.

The DOT told the Inspector General that it would make “test calls” to the 10 largest traditional travel agencies by revenue (probably including the likes of American Express, Carlson Wagonlit Travel, BCD Travel, Hogg Robinson Group, AAA Travel and others) through June 30, and would “take any enforcement action determined to be necessary.”

These travel agencies are likely aware of the monitoring as they were alerted to it by ASTA, the travel agency trade association.

Traditional travel agencies and onlines, too

Paul Ruden, ASTA’s senior vice president for legal and industry affairs, told Skift several weeks ago that he believes the testing will likely broaden beyond “brick and mortar” travel agents, too.

And, that is also believed to be under way as at least one online travel company tells Skift that there is a noticeable DOT change in tone and a more aggressive enforcement stance on codeshare-disclosure matters in recent months.

The Inspector General’s audit said online travel agencies and other online travel companies disclose codeshares in so many different ways that it creates “confusion” among travelers.

The DOT is expected to standardize how online travel agencies disclose codeshare information in a rulemaking this month.

Criticizing the FAA

The Inspector General also criticized the FAA, arguing that it hasn’t outlined standardized information-sharing practices on safety issues between codeshare airlines, and that airlines pass along this information in divergent ways.

The Inspector General’s audit recommended that the FAA publish best-practices on how air carriers and codeshare partners can share safety-related information.

The FAA responded that it would debut a safety management system, characterized by a “process-oriented approach to managing safety,” instead of publishing best-practices, the Inspector General said.

Why is a tougher approach under way at this juncture?

The burst in codeshares, and mainline airlines’ heightened use of regional carriers, undoubtedly has contributed to some sense of urgency.

And, cynics — or realists — might also point out that there is a changing of the guard looming at the DOT, with President Obama nominating Anthony Foxx to replace Ray LaHood as Transportation Secretary.

That may be another reason behind a potentially tightening of enforcement actions on codeshare disclosures and safety-information-sharing practices.

After all, bureaucrats need to cover their butts.

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Tags: codeshares, dot, faa

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