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Crossfire

Is It Time for Congress to Give Airline Passengers More Rights?

Aired February 15, 2001 - 7:30 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BILL PRESS, CO-HOST: Tonight: turbulent times for airlines as a new government report says they're doing a lousy job with delayed flights, lost bags, and not telling customers what's going on.

Is it time for Congress to come on board with a passengers bill of rights?

ANNOUNCER: Live from Washington, CROSSFIRE.

On the left, Bill Press; on the right, Robert Novak. In the CROSSFIRE: Democratic Congresswoman Eleanor Holmes Norton from the District of Columbia, a member of the Transportation Committee, and James Gattuso, vice president for policy and management at the Competitive Enterprise Institute.

TUCKER CARLSON, CO-HOST: Good evening and welcome to CROSSFIRE. It's not just your imagination. Air travel really is less pleasant than it used to be. According to a new report released Monday by the Department of Transportation, the friendly skies no longer are.

Bags get lost with alarming frequency. Planes sit on the tarmac for hours with no explanation. Overall, one out of four flights in the U.S. is delayed, canceled or diverted.

What is going on?

The airline industry points to a number of factors beyond its control: unusually bad weather, increasingly militant labor unions, more passengers flying out of not enough airports. "Mere excuses," say critics, "It's time for more laws." Several members of Congress have already proposed a passengers bill of rights.

Among other things, the legislation would require airlines to tell passengers why they're stuck on the tarmac. But can Congress really cure jet lag? Don't airlines already have incentives to improve service? Or is it time for Washington to step in and protect the beleaguered frequent flier?

We'll find out tonight -- Bill.

PRESS: Mr. Gattuso, good to have you here on CROSSFIRE.

JAMES GATTUSO, COMPETITIVE ENTERPRISE INSTITUTE: Thank you. PRESS: And good to welcome my own member of Congress.

DEL. ELEANOR HOLMES NORTON (D), DISTRICT OF COLUMBIA: Good to be here with one of my constituents.

PRESS: Congresswoman Eleanor Holmes Norton, good to see you here.

Let me start out by just reminding you that it was about a year and a half ago that Congress was ready to adopt -- John McCain was leading the fight -- this passengers bill of rights, and the airlines said, oh, no, no, no, don't do that to us, we'll fix the problem ourselves.

Well, here we are, the Department of Transportation has just come out with this report. I just want to show you a couple of things.

Before we came down here, we got this. This crossed the wire from Boston. The airport in Boston reports that over the last year, delays of 15 minutes or more have quadrupled, just in the last year alone.

And this Transportation report that Tucker referred to in the open, quoted in "The New York Times" on Tuesday, showed that over the last five years the number of flights delayed -- kept on the ground now for more than an hour; people get on and they sit on the ground for more than an hour -- went up from 17,300 to 46,000 last year.

Stuck on the ground for more than five hours: up from 33 to 79.

Now, isn't it pretty clear that voluntary deregulation didn't work? The airlines didn't do it.

JAMES GATTUSO, COMPETITIVE ENTERPRISE INSTITUTE: It's clear there's a problem with delays, and you have to look at who's responsible for that. There's three parts to the air travel system: There's the airlines, who were deregulated 22 years ago, with great success. Prices are down, more people are traveling than ever.

Then there's the airports and the air-traffic control system. We never reformed those two parts of the system. Those are the two parts most responsible for delays, for saying when a plane can travel, when it can't, how to get around weather, the capacity of the system. All of that has been neglected. That's the part that's not subject to market forces and that's the part that's not working.

PRESS: Well, you seem to be letting airlines off the hook. I mean, they're all operating under the same banners or under the same rules or in the same skies or in the same airports. You know, some seem to do better than others. But the airlines are saying, you know, "Leave us alone." As if they're some industry you can't touch.

I don't want to you think this is a liberal talking. I'd like you to hear one of the most conservative members of the United States Senate -- in fact, Mr. Republican in the United States Senate -- Trent Lott, who shot this message across the bow of the airlines today. Here he is...

(BEGIN VIDEO CLIP)

SEN. TRENT LOTT (R-MS), MAJORITY LEADER: A year or so ago, we were talking about the situation, and I tried to make it clear that the airlines and the industry needed to deal with this problem on a voluntary basis, on your own, or we were going to do it for you. And that was not necessarily a good idea.

(END VIDEO CLIP)

PRESS: Obviously, that was Tuesday, not today, but what he was saying was it was wrong to trust them then and it's wrong to trust them now.

GATTUSO: And you were right to point out that this is not a liberal- conservative issue. It's Jimmy Carter, a Democratic president, that first deregulated the airlines, that put us on a track toward those lower prices and increased travel that we have today.

And it's Norm Mineta, a Democrat in the Bush Cabinet, who proposed several years ago reforms in air-traffic control. That's been identified for years as the problem in the airline system.

I don't want to put the air -- I'm not getting the airlines off the hook. There's a lot of bad service out there. I have as many horror stories as anyone. We've got to deal with that with competition, choose another airline. Airlines like Southwest have much better consumer satisfaction levels. You've got to increase competition.

But at the same time, when you talk about delays and cancellations, you can't ignore that two-thirds of the system is controlled by government. You can't push that aside, and that's the part that the members of Congress can have the most control over.

NORTON: If I may say so, that's not the part that this report ignores. This report says that the airlines themselves have not dealt with the part of the problem that they themselves can deal with. And that's what made this report so damning.

CARLSON: Well, congresswoman, before -- let -- before you make the attack on the airline, let me just give you, present to you the defense that the airline industry itself is making. I want to read to you a quote from James Goodwin, who's the CEO of United Airlines, the biggest airline in the country.

He says -- quote -- "We're in the service business. And if we don't find ways to provide that level of service, passengers will obviously find other airlines that can."

Now, that's not just spin; that's a pretty good point. Why in the world would the airlines intentionally aggravate their customers?

Congress doesn't need to tell restaurants to serve tasty food. Restaurants that serve bad food go out of business. So why do you think you can improve what airlines...

(CROSSTALK)

NORTON: Yeah, we have fewer and fewer airlines, and I, for example, am not opposing all of the mergers of the airlines -- with fewer and fewer airlines and with many locations, with no choice, or very little choice whatsoever. Your comparison to restaurants is an apposite. It has nothing to do with the airline industry today.

Because it has nothing to do with the airline industry today, either the airlines are going to have to do it or somebody else is going to have to do it. And guess who somebody else turns out to be?

CARLSON: Wait, but congresswoman, the fact you're leaving out here is motive. It's still not clear to me why in the world airlines wouldn't have every possible incentive to make their service the best possible?

NORTON: You know, that's like saying -- that's like saying...

CARLSON: Because people still can choose other airlines.

NORTON: Since everybody wants customers in every industry, then that means that every single industry is going to improve itself automatically, and we know from our own experience that that's hogwash.

The fact is that unless you were on another planet last summer, if you were traveling by airplane any place in the United States, almost assuredly you experienced terrible delays.

Now we represent the people who experience those delays. What do you expect us to tell them? Especially after -- listen to what we did on our committee -- we held back on a patients bill of rights. The patients bill of rights was put forward by a very good Republican.

PRESS: Passengers bill of rights.

NORTON: Sorry. Passengers bill of rights.

PRESS: Another issue.

GATTUSO: There's too many bills of rights around.

(CROSSTALK)

NORTON: Bud Shuster -- Bud Shuster was also one of the great, great friends of the airlines. He had experienced some of this himself. He was -- he was -- he was -- he was as mad as a man can be. We held back, the airlines came forward with a set of commitments. They have, in fact, kept some of those commitments. Things are better in some respects.

But the things that passengers most want to get better have not gotten increasingly better -- delays. GATTUSO: Notice in the report, the report did explicitly say that the biggest part of the problem is delays and cancellations, and explicitly said that that is in large part outside of the airlines' control. They said they should try harder and they should do better, and everyone agrees with that, but the...

NORTON: And granted, and the report also said, but the airlines have not dealt with that part of the problem which is within their control. Now you do remember that part of the report, don't you?

GATTUSO: That's right, after they pointed out that the bulk of it was air traffic control, that the people writing the report are in the same department that operates the system, and they weren't looking at the reforms there.

NORTON: Well, could I -- could I say something that we've done -- done for the industry? Look what we did for the industry last year. We took off budget all this airport tax that you pay when you get on the airlines, you pay a tax. It was building up. It was helping to mask the deficit.

In one of the seven wonders of the world when it comes to budget (UNINTELLIGIBLE), we took it off budget, which means that in a few years you're going to see runways, air traffic control improvement and the rest of it.

You're right, that's not there yet. And I for one am not asking you to perform miracles, but I think we have a right to ask you to do better than you've done over the period of one year. For example, chronic delay in arrivals has gone up 400 percent.

GATTUSO: But in terms of choice and competition, there's still less choice with air traffic than there is with the post office.

PRESS: Will, I want to come back, though. I want to come back to the airlines. I'm not going to let the airlines off the hook, and I want to talk about specifically what this passengers bill the rights would say -- I mean, there are various versions of it. But here are the main points, and these deal directly to the airlines. This is not the air-traffic controllers, this is not the airports, these are the airlines.

And there are four points in most of the bills: Presenting timely information on cancellations and overbookings. Uniform standards for compensation of bumped passengers. Allowing that passengers can get off a plane if it's stuck on the ground for more than an hour. And informing passengers when they get on board of the on-time record for each flight, so at least they know what's coming up.

Now wait a minute, what's wrong with those? Why can they oppose those? How can you oppose them?

GATTUSO: First off, I've never seen Congress start out with a small set of regulations and end up with a bill that is not much, much larger.

NORTON: It's a slippery slope argument, huh?

GATTUSO: Every time I hear about passenger bill of rights, there are more things on it: healthful meals, larger seats, more comfortable accommodations. This is a -- this is a slippery slope. It is going to get far out of hand.

But even with -- even with those four criteria, you look at how the airlines are measuring up right now. You look at first one you mentioned, notification, explanation of why a flight's delayed.

PRESS: Yeah!

GATTUSO: Well, who are the airlines with the most complaints? You think of airlines -- I don't want to decrease anyone's stock. You think of airlines like Northwest. You know they scored the highest in the Department of Transportation's report?

Who's the airline with the best customer service reputation right now? Probability Southwest. Most people are pretty happy. They scored the lowest.

I don't know if Congress is measuring this right. I don't think Congress knows how to run an airline.

PRESS: But you're not getting -- you're not getting to the point of isn't this just basic stuff that any customer has a right to?

And you talk about the slippery slope -- I want you to hear Ron Wyden, the congressman from Oregon, who's one of the principal sponsors of this, speaks directly to your point. He's not...

(AUDIO GAP)

(COMMERCIAL BREAK)

PRESS: We obviously had a technical problem there and went to a commercial break before we were ready to, but now we're back. And welcome back to CROSSFIRE.

Air travel, it's the only way to go, until your flight is mysteriously canceled or it leaves the gate and waits two hours on the tarmac before taking off or it never takes off at all -- and you sit there with no food, no drink, no phone and no information. By that time, you're ready to join the passenger revolution. But what is the answer? More regulation or more competition?

Debating that issue tonight, Mr. James Gattuso, vice president for policy and management of the Competitive Enterprise Institute, and Congresswoman Eleanor Holmes Norton of Washington, D.C., member of the House Transportation Committee.

Tucker Carlson is sitting in on the right tonight. Tucker, before you take off, let's at least give Mr. Gattuso a chance to listen to and then respond quickly to this comment by Representative Ron Wyden.

(BEGIN VIDEO CLIP)

SEN. RON WYDEN (D), OREGON: I am not interested in calling for a constitutional right to a fluffy pillow on your airplane flight, but I do think that it is high time that the airlines made available information to the public that is in their possession.

(END VIDEO CLIP)

PRESS: Now, obviously a member of the Senate, but no fluffy pillow. It's basic stuff.

GATTUSO: He has every right to that opinion, and the people that are flying on discount airlines or airlines that don't provide that and get a lower price -- prices are lower -- have a right to their opinion. It's a tradeoff. Or maybe to -- to get both at the same time, let someone into the market to provide both if they can. But the point is that you have choice, you have competition in the marketplace -- the airlines will have the incentive to provide these services. And you can go elsewhere if you don't get it from them. It shouldn't be Congress deciding this. It shouldn't be one congressman or even 51 senators.

CARLSON: Now, speaking of one congressman -- congresswoman...

(LAUGHTER)

... you mentioned that Bud Shuster had a delayed flight, and obviously that's a tragic situation, and I don't mean in any to minimize the pain of Mr. Shuster's delay. On the other hand, a lot of good things have happened in airlines. It's much cheaper to fly, much cheaper between -- depending on your count -- 25 to 40 percent than it was 20 years ago.

So let's say I make $15,000 a year. I want to get on a flight to visit, say, my ailing mother. And the regulations that you're proposing raise the price so I can't afford that ticket. How have you helped me as a consumer, as a passenger?

NORTON: Well, one of the things we're not going to do is to raise prices on airlines. I'm the first to say -- it happened in a Democratic administration after all -- that deregulation has had very important benefits, and price benefits for the consumer have been among the most important.

But the notion, for example, of asking the airlines to provide information is hardly likely to cost money. When you can't even find out why there is a delay or when the next flight is taking off, that's not goings to raise the price. And part of the problem here is not...

CARLSON: But that's a small part. It's a small part of what you're proposing.

NORTON: Part of the problem -- no, I want you to know that that is not a small part. I believe that part of the problem that the airlines have now -- in fact, a great part of the problem -- is not that people don't appreciate that there are in fact huge problems that you can't deal with. It is the lack of information, it's the lack of that kind of service that you're not -- left there wondering what in the world happened, without amenities...

CARLSON: So basically, you're saying your regulation wouldn't raise ticket prices at all. You're confident of that.

NORTON: I'm saying that kinds of the regulations that the passenger bill of rights is talking about would not raise prices.

GATTUSO: I think Tucker answered that already. If there's no cost, there's absolutely no incentive for an airline not to offer that.

NORTON: So why hasn't it been done?

GATTUSO: That's -- that's the thing. So I don't think you can say there's no cost at all. Airlines are not in the business of turning away customers if they could do something at no cost. There's something else going on here.

One thing that I'm afraid is happening from the political side is a little bit of misdirection, that we're talking about notification of delayed flights and we're talking about information over an 800 line, which are important, people are concerned about that, but not nearly as important as getting those flights on-time to start with, of getting infrastructure and an air-traffic control system that can handle this.

And I'm really afraid that there's a political debate going on that is trying to -- to tell people don't -- pay no attention to the man up in the tower over there. He's not part of your problem.

NORTON: Now, if that isn't a red herring I've never heard one. I mean, are you talking to a Congress that in a bipartisan way threw money now at infrastructure? So we're really -- it's true that it's not all online yet. We just did it last year. And I don't want to hold you responsible for that.

But in the meantime, there is real pressure on the airlines to make whatever self-improvement they can pending that, and I think that what this report, an objective report, says today is that you have not done your part yet.

GATTUSO: Congress has put more money into the system, which is welcome, but they've done that without any structural reforms. It's still a government-owned system. We know from history and from every other country on Earth that government-run systems don't run as well as market-oriented ones.

NORTON: (UNINTELLIGIBLE) that's what's happening here, that government's running (UNINTELLIGIBLE)...

GATTUSO: There are two dozens air traffic control systems around the country -- around the world that are corporatized and operating successfully. Why are we behind? PRESS: I want to -- I want to ask you about -- everybody's got their horror stories. I don't want to tell my horror story. But I want to tell you the thing that bugs me the most, which is airlines are playing games with us.

What they've done to minimize the number of delays and to maximize the number of on-time flights is they've just on paper increased the length of the flights. It costs -- it's 26 minutes to fly to New York. And you know now -- it used to be an hour from National, which I still call it, congresswoman, to La Guardia. Now they say it's an hour and 20 minutes or an hour-and-a-half. They're lying through their teeth. And then they role up to the gate on time instead of 26 minutes in an hour-and-a- half, and everybody goes: "Whoopee! Another on-time arrival."

That is a just an absolute lie.

GATTUSO: I have my airline horror stories, too, but I think that proves that regulation is not the answer. You're putting these regulations without competition, without structural reform, without the real things that need -- putting in the real changes that need to be made. You're just going to have people playing around the rules with no real change.

NORTON: What I think you're going to -- what I think you're going to see is not an avalanche of regulations. But I do think that in those trouble areas you're going to see members on both sides of the aisle come forward and say that in those areas we're going to hold you accountable.

GATTUSO: I think there's a real divide here between...

PRESS: Here's the question, if I may. We regulate the oil industry, we regulate the automobile industry, we regulate the restaurant industry in terms of safety. I mean, why shouldn't the airline industry have to step up to the plate and meet certain standards within which they can compete like bloody murder?

GATTUSO: We don't regulate the restaurant industry in that sense. If there's a menu that doesn't have all the food on it, if you're missing a fork, you go to another restaurant. You don't bring Congress involved and say...

NORTON: But if it's dirty, you don't go to another restaurant. You regulate...

(CROSSTALK)

CARLSON: Actually, congresswoman, you derided Mr. Gattuso's argument as a slippery slope argument, but in fact, in real life for two years running, Congress in their transportation bill has taken up the question of when and how and where on an airline peanuts ought to be served. So in fact -- this is a true fact. In fact, Congress has already inserted itself into the smallest details of how airlines are run. And I guess my question to you is where does it stop.

NORTON: Well, it hasn't done any such thing. And the reason I think that...

CARLSON: Well, in fact, it has.

NORTON: Well, you know, you can your peanut argument all you want to. But I don't think that you can come at me with a slippery slope argument, because what did we do last year. When the passengers bill of rights came forward, did we march forward to put it into effect? No. We stepped back, and the airlines said, we'll regulate ourselves. And the came forward with a set of commitments.

Let me tell you how these commitments work. You can sign onto some of the commitments, but not others of the commitments. You can sign up for commitments for your domestic flights but not your international flights. Let me tell you one thing the patients bill of rights would do, it would even...

GATTUSO: Passengers.

NORTON: The passengers bill of rights -- you see what I've got to get...

GATTUSO: There are a lot of bill of rights.

NORTON: What -- what it would do is it would put everybody on an even playing field, so that it would relieve some of the competitive pressures that people feel when some people want to improve that service by doing this and the other guys don't do that. And they're all going by different rules and regulations, the ones they themselves made up. How do you like that?

GATTUSO: You do want to put pressure on the airlines. You want to put regulation on them through the market. That's the best way to regulate their practices: have the ability to go to someone else, some other airline, a choice.

NORTON: Even at National Airport, there are a limited number of airlines. Imagine what there are where most members of Congress come from. You tell that to most members of Congress.

GATTUSO: There are a limited number of airlines...

NORTON: You'll get a pie in the face.

GATTUSO: ... at National Airport because of government controls. Government controls limit the number of flights out of National Airport.

CARLSON: We are back to the suffering members of Congress.

(LAUGHTER)

Congresswoman Eleanor Holmes, James Gattuso, thank you very much. Bill and I will be back to tell our horror stories. Bill will tell his, I'll defend the industry against them in our closing comments. We'll be back in a moment.

(COMMERCIAL BREAK)

CARLSON: Check out how your favorite airline fared in the Department of Transportation report. Just log onto cnn.com/crossfire.

Bill, I have a theory this is all about members of Congress and how they're treated by the airlines. You'll notice Eleanor Holmes Norton about five times said, well, this member was -- he was held up at the gate, that's outrageous. This is about them. This is about their inconveniences, and they're taking it out on the country -- not the first time.

PRESS: Nice try, Tucker. Look, it's about you and it's about me, it's about everybody out there who flies. You know, most of the time -- I have to agree -- most of the time things go OK, plane leaves, plane lands, everything's fine. But it's those 10 percent maybe of the other times that just drive you crazy, and the airlines have proven that they cannot police themselves and they never will.

CARLSON: But they also can't control the weather, they can't control lunatic labor unions. I mean, it was the United Labor Union last summer that caused the delays, and they can't control bad air traffic.

(CROSSTALK)

PRESS: Here's what they can control. They don't have to treat people like mushrooms, you know, feed them BS and keep them in the dark. And that's what they do. They leave you on the plane. They don't tell you why the plane is not taking off, and they don't give you anything to drinks.

CARLSON: No drinks. That's -- we can find bipartisan consensus on that.

PRESS: From the left, I'm Bill Press. Good night for CROSSFIRE.

CARLSON: And from the right, I'm Tucker Carlson. Join us again tomorrow night for another edition of CROSSFIRE.

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