U.S. Airlines Caught in Storm of Criticism

The U.S. government scolded the nation’s airlines Monday for coming up short in their voluntary effort to improve customer service and warned that air travelers will face another chaotic summer unless the carriers act quickly to better their performance.

One in four flights were delayed, canceled or diverted last year--affecting 163 million U.S. passengers--and consumers’ complaints have soared, according to a report by the Department of Transportation’s inspector general.

The report comes at a time when the airline industry is being vexed on several fronts, from labor strife to increased competition to threats of regulation. Airlines successfully lobbied Congress over the last two years to stave off legislation for a “passengers’ bill of rights,” saying they would work to improve service on their own. But the report Monday found their efforts lacking.

The agency also extended blame for the delays, cancellations and lost luggage that plagued U.S. travel last summer to airports and the Federal Aviation Administration because they haven’t kept up with surging passenger growth. It expects the same problems to recur this summer.

“There is no single solution to the growing problem of delays and the resulting consumer concern over air travel,” the agency said. All the parties, “and most important, the traveling public, know the aviation system is not working well.”

But it’s up to the airlines to improve matters in the short term because airport and FAA plans to add runways and upgrade air traffic control technology are at least several years away, the agency said.

This summer, “when the next major crunch in air travel is likely to occur, is just around the corner,” it said.

The agency’s report card adds to the recent turbulence in the airline business, which reached a peak last summer when more than 25,000 flights were canceled or delayed because of bad weather, employees’ work slowdowns and other factors.

After a brief respite, the industry is again in upheaval because of these factors:

* Spreading discontent among both leisure travelers and business fliers who are fed up with delays, cancellations and poor service.

* Renewed plans by lawmakers to introduce bills to secure “passengers’ rights.” They have been waiting for the DOT report as the basis for refiling the legislation.

* Widespread labor unrest that could lead to strikes against four of the biggest U.S. airlines this spring. The Bush administration is on record as being willing to intercede to block a strike, a position that has angered airline labor unions.

* The slowing U.S. economy, which could reduce consumers’ demand for air travel and make it tougher for airlines to reach more lucrative pacts with their unions.

* Merger plans among four of the nation’s eight major airlines, and the prospect of more, that many fear would saddle travelers with even worse service and higher fares. With fewer airlines, some fret a strike against one airline could throw the U.S. travel system into chaos.

For now, the DOT is urging the airlines to implement better systems for telling passengers about lengthy delays or cancellations, for making accommodations for travelers stranded overnight and for reducing the number of chronically delayed or canceled flights.

Airlines also need new ways to offer consumers the lowest fares for which they’re eligible, without requiring them to ask, the DOT said.

Reaction to the report was predictably mixed.

The airlines defended their voluntary efforts and rejected calls for government intervention. Some travelers’ advocates said the DOT confirmed that the airlines aren’t managing themselves and that their merger plans should be shelved.

But some industry watchers pointed the blame back at the DOT.

“The DOT runs the FAA” and therefore “has no business claiming that the airlines have to do something” when the FAA has failed to keep air traffic control in lock-step with passenger growth, said Michael Boyd, who heads Boyd Group, an aviation consulting firm in Evergreen, Colo.

Congressional plans to partly re-regulate the airlines to achieve better service “wouldn’t change any of that,” but would hobble the airlines with a set of procedures that “would make it more expensive for them to operate and thus would raise fares,” Boyd said.

The Air Travelers Assn., a Washington advocacy group, said “it is far better for the airlines to institute these changes on their own than to have government regulation.”

“The last thing we need is a bunch of government bureaucrats making airline service decisions for us,” said the group’s president, David Stempler.

But Kevin Mitchell, head of the Business Travel Coalition, a group that represents business fliers, said the report illustrates that the airlines’ progress “has been insufficient.” Mitchell called for a one-year moratorium on the carriers’ merger plans so they can first improve service.

If those mergers proceed anyway, “customer service in commercial air transport might become an oxymoron for many, many years,” he said.

UAL Corp.’s United Airlines, the biggest U.S. carrier, is in the process of buying US Airways Group, and AMR Corp.’s American Airlines unit plans to acquire Trans World Airlines. Some of the other major airlines are also decrying those deals on grounds they’ll further harm customer service. But they’re also saying that if those mergers go through, they’ll look for partners.

“If you thought last summer was ‘airline hell,’ buckle your seat belts, because with these pending mega-mergers, you haven’t seen anything yet,” Continental Airlines Chairman Gordon Bethune told a Senate hearing last week.

Lawmakers began pushing for better service in 1999, after hundreds of Northwest Airlines passengers were stuck on Detroit runways for several hours during a snowstorm. Last month the airline agreed to pay $7.1 million to more than 7,000 passengers forced to wait for hours on grounded airplanes at Detroit’s airport during a 1999 storm.

Among those planning to refile legislation is Sen. Ron Wyden (D-Ore.), who said the DOT audit shows the airlines are “not doing enough.”

“Passengers should not have to wait until more runways are built for the airlines to stop making excuses and start telling passengers what they know, when they know it,” Wyden said.

Yet the DOT report reminded Capitol Hill that Congress can back off, at least for now, and allow the “option of first giving the airlines the opportunity” to again voluntarily beef up their service.

That’s certainly what the airlines want. The carriers should be allowed to tweak their operations themselves to reduce delays, keep travelers informed of problems and compensate passengers for service interruptions, United President Rono Dutta said.

“That flexibility is just one reason that United, like the industry, favors a voluntary industrywide service plan with accountability,” Dutta said. He added that United is “very proud” of its “accomplishments in this first year” under the airlines’ voluntary push for better service.

But a key factor in last summer’s travel nightmare was United’s labor dispute with its pilots, whose refusal to fly their normal overtime hours forced the carrier to delay or cancel thousands of flights. Labor again could crimp the airlines’ ability to do better this year.

Though United settled with its pilots, it’s now locked in a contract fight with its mechanics. Various employee groups at American, Delta and Northwest also are in testy labor negotiations, and all could strike this spring if contracts aren’t reached.

Delta’s pilots overwhelmingly voted to authorize a strike if their talks fail, the Air Line Pilots Assn. announced Monday.

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Times staff writer Ricardo Alonso-Zaldivar in Washington contributed to this report.