DOT Proposes Cracking Down Even Harder on Airlines, Wants Curtailing of Some Ticket-Change Penalties and Other Consumer Protections

The Department of Transportation is proposing to crack down even harder on airlines, now that its policy providing fines of up to $27,500 per passenger for most tarmac strandings over three hours is in effect.

The biggest kicker in the proposal, it seems to me, would affect airlines' lucrative revenues in collecting penalty fees for making changes on so-called nonrefundable tickets. Holy (cash) cow! The agency wants to require airlines to allow you to change a nonrefundable ticket within 24 hours after purchase without penalty. Right now, most airlines charge you a fee of $100 to $150 for making any change -- and then you're also subject to whatever new fare prevails when you make that change.

Today’s proposed rule also would expand the requirement for having contingency plans to include foreign airlines’ operations at U.S. airports, and would require carriers to adopt contingency plans for small- and non-hub airports. That rule extension would impact about 300 additional airports, said the Airports Council International- North America, the domestic airport trade group, which supports the DOT proposals. (See below)


Here's the full DOT announcement:

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Transportation Secretary Ray LaHood today proposed new consumer protections for air travelers, building on the Department of Transportation’s recent rule banning carriers from subjecting passengers to long tarmac delays and other deceptive practices.

Specifically, the new proposed rule would:

--Increase compensation for passengers involuntarily bumped from flights

--Allow passengers to make and cancel reservations within 24 hours without penalty

--Require full and prominently displayed disclosure of baggage fees as well as refunds and expense reimbursement when bags are not delivered on time

--Require fair price advertising

--Prohibit price increases after a ticket is purchased. [My note: That's the proposal for allowing ticket changes without penalty for 24 hours after purchase.]

--Mandate timely notice of flight status changes

"Airline passengers have rights and should be able to expect fair and reasonable treatment when they fly," LaHood said. "With this rulemaking, we’re proposing to strengthen the consumer protections enacted last month and raise the bar for airlines when it comes to treating passengers fairly."

The rule published last December, which adopted a three-hour limit for airline tarmac delays for domestic flights, also required U.S. carriers to adopt contingency plans for lengthy tarmac delays at large-hub and medium-hub airports and to publish those plans on their websites. Today’s proposed rule would expand the requirement for having contingency plans to include foreign airlines’ operations at U.S. airports and would require carriers to adopt contingency plans for small- and non-hub airports.

The rule also would require the reporting of additional tarmac delay data to DOT. The department would collect this data from all U.S. and foreign airlines operating aircraft of 30 or more seats on flights to and from the United States and charter flights. Currently, the department collects this data only for the domestic scheduled flights of the 18 largest U.S. airlines.

The proposed rule also would increase the potential compensation for being involuntarily bumped from oversold flights. Currently, airlines may limit compensation for involuntary bumping on flights to $400 if the carrier arranges substitute transportation scheduled to arrive at the passenger’s destination one to two hours after the passenger’s original scheduled arrival for domestic flights, or one to four hours for international flights, and to $800 if the substitute transportation is scheduled to arrive more than two hours later for domestic flights, or more than four hours later for international flights. The proposed rule would quickly increase these limits to $650 and $1,300, respectively, and thereafter adjust the amounts for inflation every two years.

The department also proposed a number of measures to make it easier for consumers to know how much they will have to pay for air transportation. Carriers would be required to provide special notice any time baggage fees are increased, and to notify passengers buying tickets whether they must pay to check up to two bags. It also asked for comment on several alternatives under consideration to provide greater access to air transportation to persons with severe peanut allergies.

To support President Obama’s open government initiative, the department has partnered with the Cornell eRulemaking Initiative in a pilot project, Regulation Room, designed to improve the public’s ability to understand and participate in this rulemaking through a web-based discussion format. Information on the Regulation Room can be found at www.regulationroom.org. ...

Comments on the proposal are due in 60 days. The text of the proposed rule and comments are available on the Internet at www.regulations.gov, docket DOT-OST-2010-0140.


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Here's the DOT summary of the changes.

Here is the Airports Council International North America reaction in support of the new DOT proposal.

And here's a statement from James C. May, the head of the the airline trade group, the Air Transport Association, which says it is evaluating the new proposed rules:

The Air Transport Association of America (ATA), the trade organization for the leading U.S. airlines, today issued the following statement regarding the passenger-protection notice of proposed rulemaking (NPRM) issued by the Department of Transportation:

"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," said ATA President and CEO James C. May.



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