DOT Proposes New Airline Passenger Protections

The U.S. Department of Transportation today proposed a host of new airline passenger protections slated for enactment in about six months, including new provisions to increase compensation for passengers bumped from flights, allow airfare bookers to hold fares before final purchase for 24 hours and require carriers to more prominently display baggage fees and more fully quote fares through various channels.

DOT said it plans to adopt the rules in 180 days, following a public comment period. Among the new provisions, DOT plans to increase the maximum compensation airlines are required to give bumped passengers from $400 to $650 if alternatively arranged transport delivers domestic passengers to their destination within two hours, and international passengers within four hours, of the original schedule. In instances where the arrival exceeds two hours, DOT would require compensation levels to increase from the current $800 to $1,300. DOT said it would adjust those new levels every two years to account for inflation.

According to analysis prepared for DOT and released today by research and management consulting firm Econometrica Inc., passengers rarely invoke their right to the maximum compensation fee, as "90 percent of boarding refusals attributable to carrier oversales in 2008 were resolved by recruiting volunteers."

Under today's DOT proposal, carriers would have to prominently disclose baggage fees on their websites and include fee disclosures on e-ticket confirmations. DOT also is requiring carriers to quote the full price, including taxes and fees, when advertising airfares.

Econometrica's analysis noted that current regulations already require the disclosure of "all fees, surcharges and taxes," though DOT has allowed carriers to break out—either in fine print or through footnotes—the display of such add-ons. The new advertising provisions apply not just to print or online ads, but also to fares displayed and quoted by travel agencies or on booking sites.

DOT today also said it is considering requiring carriers to make the disclosure of optional service fees, such as those for checked bags, available through global distribution systems. "This would ensure that the information is readily available to both Internet and 'brick and mortar' travel agencies and ticket agents so that it can be passed on to the many consumers who use their services to compare air transportation offers and make purchases," DOT said in the proposed rule.

Yet another proposal DOT released today would require carriers to allow "reservations to be held at the quoted fare without payment, or cancelled without penalty, for at least 24 hours after the reservation is made."

DOT said today's proposals build on a number of other passenger protections announced in December 2009 and enacted in late April. Chief among those was a rule requiring domestic carriers to let passengers deplane any aircraft held on the taxiway for three hours or face hefty federal fines. In addition, DOT required domestic airlines to develop contingency plans for such delays at large and medium hub airports, which account for about 88.5 percent of passengers, according to Econometrica. Today, however, DOT said it also would require international carriers to make such contingency plans, as well as domestic airlines at smaller airports. DOT also is expanding the number of carriers from which it collects tarmac delay data.

The Air Transport Association, which challenged DOT's last set of passenger rules, today said, "The ATA member airlines' shared goal is to provide a safe, efficient, reliable and economically viable air transportation system consistent with the expectations of their customers, employees and shareholders. Today's DOT notice of proposed rulemaking will be evaluated against that standard, with a focus on minimizing potential passenger inconvenience," according to a statement issued by ATA president and CEO James May.