Airlines must refund bag fees for lost luggage

Airlines can’t lose your luggage and still expect to keep the bag fees, the Obama administration said Wednesday.

Responding to appeals from consumer groups and some leaders in Congress to make flying more passenger-friendly, Transportation Secretary Ray LaHood announced several new regulations, including a rule that will require airlines to refund bag fees if they lose luggage.

The new Department of Transportation rules also increase compensation for passengers bumped from flights, require airlines to publish “hidden” fees in their advertisements, and expand a rule to prevent international passengers from being stranded on tarmacs for longer than four hours.

The new regulations, which take effect in August, are intended to address a chorus of complaints from air travelers frustrated with rising fees, overbooked flights and long delays.

“It’s just common sense that if an airline loses your bag or you get bumped from a flight because it was oversold, you should be reimbursed,” Mr. LaHood said.

Consumer advocates welcomed the changes.

“There’s always more we would have liked, but today we are gratified,” activist Kate Hanni said. She became a leader of the passenger rights movement after she and her family were stuck for more than nine hours on a tarmac in Austin, Texas, in 2006.

She brushed aside criticism from free-market proponents who contend the regulations will hurt the airllines.

“If they can help people feel better about flying, I believe these new rules will actually put people back on planes,” she said.

In announcing the rules, the DOT specifically cited a Cathay Pacific Airways flight that sat on a tarmac at New York’s John F. Kennedy International Airport for more than 12 hours in December as “an important factor.”

The new regulations were greeted with some skepticism by airlines, especially international carriers that warned the regulations will lead to more inconveniences for travelers.

The International Air Transport Association predicted that the threat of a $27,500 fine per passenger for flights that sit on the tarmac for more than four hours will lead to higher prices and more pre-emptive cancellations — flights that are canceled outright are not considered “delayed.”

For fully loaded jumbo jets, a maximum fine could total in the millions — and with some overseas flights scheduled days apart, cancellations could strand passengers far longer.

“The market forces of this competitive industry give airlines every commercial incentive to treat passengers well when there are operational irregularities,” the Geneva-based trade group said in a statement released Wednesday.

“This intervention into international airline business practices will result in increased cancellations, higher ticket prices and greater inconvenience for passengers. We presented clear evidence to DOT demonstrating this. We are disappointed that it was not given greater consideration,” the group said.

The Air Transport Association of America, the lobbying arm of the domestic air industry, said the airlines had already been working to address the concerns of passengers.

“As the DOT statistics demonstrate, airlines already have made many service improvements and many of the regulations formalize procedures already in place, including prompt delay notification, one-way fare advertising, and irregular-operation contingency plans,” said ATA President and CEO Nicholas E. Calio in a statement.

Some consumer advocates had hoped the new rules would go even farther, but the DOT stopped short, for example, of requiring refunds for bags delivered late.

The rules require airlines to allow passengers to cancel reservations within 24 hours of booking without penalty, prohibit price increases after tickets are purchased, and require airlines to notify consumers of delays of more than 30 minutes. The rules also require airlines to disclose fees for checked bags, reservation changes, seat selections and upgrades on their websites.