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Mexico is trying to crack down on airline fees and flight delays. The carriers are having none of it.
Mexico’s consumer-protection agency fined five airlines including New York-based JetBlue a combined 22.4 million pesos ($1.27 million) for alleged transgressions such as charging fliers for their first checked bag. The entity, not known for taking on major corporations, is also monitoring whether airlines comply with a new requirement to compensate passengers when flights have major delays.
The question is whether Profeco, as the regulator is known, can make the fines stick – and defeat a legal challenge by the airlines in Mexican courts. The carriers are still charging for luggage on flights to the U.S. and Canada, saying an international treaty supersedes the new laws. The companies declined to say if they’ve paid any levies Profeco has assessed. That makes Mexico City the latest front in the clash between passengers’ rights and airline fees.
“This case is pitting the airlines’ economic freedom to do business against a large part of the population that uses these services,” said Julio Salazar, the legal director at Power to the Consumer, an advocacy organization that supports the effort to restrict the fees.
Profeco declined to comment, citing the ongoing court dispute. Three of the companies fined, Grupo Aeromexico SAB, Volaris and Viva Aerobus, also declined to comment. Interjet didn’t respond to a request for comment. JetBlue Airways Corp. referred questions to Airlines for America, the lobbying group for major carriers in the U.S.
“A4A has engaged with both Mexican and U.S. government officials to express our concerns on the effect of the new regulations regarding checked baggage fees on the U.S.-Mexico air services agreement,” said Kathy Allen, an A4A spokeswoman. “We remain committed to ensuring that the rights of U.S. carriers are being honored.”
At the heart of the matter is whether the Mexican constitution recognizes consumer rights as human rights, as some scholars have interpreted. The foreign treaty says airlines are free to set their own pricing models according to market principles. The conflict means the case has the potential to reach Mexico’s Supreme Court, Salazar said.
“This will come down to Profeco’s capability to litigate before the courts,” he said. Settling the dispute could take more than a year, Salazar said.
Profeco at least struck a chord on social media as consumers applauded its tougher stance. Airlines have seen a steady flow of negative headlines, especially in the U.S., where a video of Chicago security officials dragging a man off a United Airlines regional flight sparked public outrage.
There could be a downside to passengers, though. Getting rid of baggage fees would put pressure on airlines to raise fares, said Mauricio Martinez, an analyst at Grupo Bursatil Mexicano. Mexico’s total airline passengers have surged since 2006 when low-cost carriers like Volaris entered the market and won over many budget-conscious customers used to riding on long-distance buses.
“If an airline isn’t allowed to charge for luggage separately, the cost of the ticket has to absorb it, resulting in a higher total price” for those who don’t travel with bags, he said. “It’s not only Mexican companies moving to this model, it’s an industry trend.”