U.S. proposes tougher passenger-rights rules for airlines
Airline passengers would be able to cancel new reservations within 24 hours without penalty and collect up to $1,300 in compensation for being bumped from an overbooked flight under rules proposed Wednesday by the Obama administration.
Under the proposal, airlines also could not increase fare prices after a ticket is purchased and would be required to clearly disclose information to passengers about baggage fees, flight status changes and passenger bumping rules.
Unveiled as Americans get ready for the busy summer travel season, the proposed rules come only six months after the administration adopted hefty new fines against airlines that strand passengers on delayed flights.
“Airline passengers have rights and should be able to expect fair and reasonable treatment when they fly,” said U.S. Transportation Secretary Ray LaHood, who added that he hopes to put the rules in effect by this fall after a 60-day public-comment period.
The proposed rules were applauded by passenger rights groups and criticized by airline industry experts.
“This is incredible news,” said Kate Hanni, founder of FlyersRights.org, a nonprofit passenger rights group. She said her group has been advocating all of these proposed rules to the administration.
The new rules could help the airlines by eliminating some of the headaches that discourage people from flying, other experts said.
“A lot of people don’t fly, saying it’s too frustrating, customer service is terrible,” said Anne Banas, executive editor of SmarterTravel.com, an online resources guide for travelers. “A lot of these changes bode well for consumers and airlines.”
For example, she said the proposed rule to require airlines to advertise the full fare, including all fees and taxes, would make it easier for passengers to shop for the best price.
The Air Transport Assn. of America, a trade group that represents the nation’s largest airlines, issued a statement saying only that it would evaluate the proposed rules. But some industry experts said the latest rules would make little difference in the way airlines operate.
Bob McAdoo, an airline expert and senior research analyst for Avondale Partners, a Nashville-based investment bank, said the increased compensation for passengers who are denied a seat won’t make a big difference because most bumped passengers give up their seats voluntarily.
“That is one of those things that makes politicians feel like they’ve done something,” he said of the proposed rule.
The proposal to increase compensation for bumped passengers comes as slumping travel demand has prompted airlines to cut back on flights and fill planes to near capacity.
Federal law allows airlines to oversell a flight to compensate for passengers who don’t show up. But if an airline overbooks a flight and must deny a paying passenger a seat, the airline is currently required to compensate each flyer up to $800, depending on how long the passenger is delayed getting on the next flight.
Under the rules proposed Wednesday, the compensation amount would increase the limit to $1,300 and rise every two years to reflect inflation. The changes would also require that airlines compensate bumped passengers traveling on tickets issued through a frequent flyer reward program.
Although many airlines already allow passengers to cancel a reservation within 24 hours without penalty, the proposed changes would extend the penalty-free rule to all airlines.
The new rules come six months after the Department of Transportation adopted fines against airlines that strand passengers on airport tarmacs more than three hours. The fines of up to $27,500 per passenger took effect in April.
McAdoo, the airline analyst, said such fines could deal a financial blow to a struggling industry.
“The tarmac rule is off the charts in being unreasonable,” he said.
But Hanni said airline executives need to worry about the rights of passengers over their profit margins.
“We should not be concerned about them being profitable or not profitable,” she said. “Ultimately, we are the biggest stakeholder in the [airline] companies.”
The federal agency is also considering how to accommodate airline passengers with peanut allergies. It asked for public comments on several options, including whether to ban peanuts from flights with passengers requesting a “peanut-free” flight in advance.
