Alexandria, VA, May 10, 2024 – The amended FAA Reauthorization bill (H.R. 3935) approved by the Senate in the late evening on May 9 failed to address a recent Department of Transportation (DOT) final rule that leaves travel agencies on the hook for providing airline refunds in cases where they are 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.
ASTA notes that in both the regulation and the legislation, “ticket agents” were painted with a broad brushstroke, and not all ticket agents are created equal. The ability of a large online travel agency (OTA) to repay an airline refund is vastly different from a third-generation retail travel agency.
“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.
Travel advisors will meet with lawmakers this September for ASTA’s annual Legislative Day. This will be the first item on the agenda in those congressional meetings. Travel advisors will want to know how their lawmakers plan to address this significant oversight.
ASTA extends its appreciation to Sen. Rand Paul (R-KY), who introduced an amendment restoring the original language included in the House version of the bill that would have placed the refund obligation on the party holding the funds. Unfortunately, Senate leadership failed to provide an opportunity to consider amendments.