The updated FAA Reauthorization bill (H.R. 3935), passed by the Senate on the evening of May 9, did not resolve a recent rule from the Department of Transportation (DOT) that burdens travel agencies with the responsibility for airline refunds when they act as the merchant of record.
“Time and time again, we’ve heard politicians in Washington give lip service to small businesses. Travel agencies are not positioned to float the kind of financial obligations that policymakers are strapping on their backs,” said Zane Kerby, President and CEO of ASTA. “Consumer protection could have been accomplished without sacrificing the interests of small business travel advisors who work diligently every day on behalf of the traveling public,” Kerby continued.
The American Society of Travel Advisors (ASTA) pointed out that the rule and the bill both indiscriminately categorize “ticket agents,” failing to consider the varying capacities among them. For instance, the financial capability of a major online travel agency (OTA) to handle an airline refund differs significantly from that of a family-owned retail travel agency spanning three generations.
“Those household name OTAs are resourced with billions more dollars than our retail agencies, 98 percent of which are small businesses. Airlines have been bailed out by Congress over and over, and they are now looking to travel agencies to serve as their bank, paying their customers with no onus to repay the agencies. Requiring advisors to extend credit from their own pockets to pay airline refunds is a gross misplacement of responsibility that must be rectified,” Kerby said. “Congress failed in its duty to protect Main Street from monolithic airline corporations. In the end, the consumer suffers, as travel advisors will be less inclined to book airfare, leaving the flyer without an advocate when travel plans go south,” Kerby concluded.
In September, travel advisors are set to discuss this crucial issue with legislators during ASTA’s annual Legislative Day. They are eager to learn about the measures their representatives intend to take regarding this significant oversight.
ASTA has expressed gratitude to Senator Rand Paul (R-KY) for proposing an amendment that would have reinstated the initial provision in the House version of the bill, assigning the refund responsibility to the party in possession of the funds. However, the Senate leadership did not allow for the consideration of this amendment.
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