When Hayley Hickcox-Huffman arrived in San Luis Obispo, Calif., on a US Airways flight last year, she made it on time, but her bag did not. Having paid $15 to check that piece of luggage, she felt entitled to a refund. After all, if her bag hadn't arrived with her flight, what exactly had she paid for?
Since then, lawyers and other passengers have challenged airlines in the courts on that very question, asserting a right to refunds when baggage fees are levied but the luggage doesn't arrive with the passenger. Airlines, meanwhile, are fighting back, claiming they never promise on-time baggage delivery, nor do they guarantee in their contracts of carriage refunds in instances of delayed luggage.
Hickcox-Huffman last month sued US Airways in California for breach of contract, unjust enrichment and breach of the covenant of good faith and fair dealing. The plaintiff argued: "When defendant began charging fees for baggage, it incurred the obligation to handle such baggage with care and ensure the timely delivery of the baggage to its passengers on arrival at their destination. Each time the defendant delays, damages or loses baggage, but fails to refund the baggage fee to the affected passenger, it breaches this obligation." Hickcox-Huffman and her lawyers are seeking class-action status against US Airways, which at press time had not filed a response with the court.
That suit is hardly the only legal action on the matter. One such suit against American Airlines was filed in July in Seattle. "American Airlines has chosen to charge a fee to deliver a customer's bag to a certain destination and, like most other airlines, has reaped significant profits from this practice," according to a statement by attorney David Ongaro of San Francisco-based law firm Ongaro Burtt & Louderback LLP. "With that business decision, however, comes the obligation to either perform the service, as promised, or return the fee. It's bad enough that most airlines now charge fees to transport baggage, but [it's] inexplicable for them to pocket the money when they fail to deliver this basic service." The law firm has worked to file "a number of baggage claim class-action lawsuits based on a simple theory that airlines charged passengers for a service but failed to deliver the bags as promised," according to a statement.
While they tap into traveler frustration regarding the decoupling of airline services from the base fare, such lawsuits stand on flimsy legal ground, said lawyer John Caldwell, president of travel management consultancy Caldwell Associates. "This is a certain amount of noise, and I think these cases probably aren't going to make it," he said. "If the first one or two get thrown out, I think that's the end of it."
American is seeking to dismiss the Seattle-area case, arguing, among other things, that there is no obligation in its contract of carriage to deliver bags on time. In court documents, AA wrote that those seeking obligatory refunds on delayed checked bags are proposing "legal rules that do not now exist." The carrier also argued that the Airline Deregulation Act supersedes claims made under state law. Absent an earlier resolution, plaintiffs expect the discovery phase to take a year before the case would be "ready for trial by December 2011," according to a court document.
While the U.S. Department of Transportation in the past two years has implemented several new air passenger protections, it has yet to address this particular issue. Caldwell viewed federal intervention as a more feasible avenue than the legal process, noting the plaintiff would "be better off going to DOT and trying to get a rule that would allow for compensation on this, but I don't think they'd want to do that, because that would be an administrative ruling and they'd get no money."
American, Continental Airlines, Delta Air Lines, United Airlines and US Airways all note that passengers could be eligible for a refund if they paid to check luggage on a flight that is canceled. For lost luggage, meanwhile, domestic airlines are bound by law to reimburse passengers up to $3,300, depending on circumstances. However, no legacy airline contract of carriage explicitly offers a refund for baggage that is merely delayed. A Continental spokesperson said, "Since the checked-bag fee is a transportation charge, we don't offer a refund if a bag is delayed."
Still, customers are free to file a refund request, and several airlines said they evaluate those on a case-by-case basis. All of the largest U.S. airlines have some mechanism, whether through their websites or via U.S. mail, through which travelers could request such refunds.
An AA spokesperson said, "The way we generally explain that is to say that checked-bag charges are not reimbursed just because bags are delayed. However, if the delay or loss is significant enough to file a loss claim for other items that results in any payment or reimbursement, then customers are also welcome to include their checked-bag charge as an element of that claim request." Though US Airways' baggage policy claims that "all bag fees are nonrefundable, per person and each way," the carrier noted on its website that "we have processes in place to compensate you on a case-by-case basis in the event of a service failure."
Despite the litigation this year, carriers pointed to the infrequent nature of such infractions, claiming less than 1 percent of bags fall into DOT's category of "mishandled," which includes lost, damaged or delayed luggage. AA similarly noted that 99.4 percent of bags arrive on the same aircraft as the passenger. When they don't, according to a spokesperson, half of the wayward luggage arrives "at the correct destination on the next flight in."
The rate of mishandled baggage has decreased. The 18 largest U.S. airlines on average mishandled 3.59 bags per 1,000 passengers during the first nine months of 2010, down from 4.02 bags in the same period in 2009, according to DOT's most recent Air Travel Consumer Report. Of the six largest U.S. carriers, Continental posted the best performance, mishandling 2.55 bags per 1,000 passengers, while AA posted the worst performance among legacy airlines, mishandling nearly four bags per 1,000 passengers. US Airways, Southwest Airlines, Delta and United each posted better than average baggage-handling performance, but many of the regional carriers with which they contract--including AA's American Eagle (7.26 bags mishandled per 1,000 passengers) and Delta's Comair (5.4 per 1,000)--performed below average.