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The New Airline Passenger Rules, and How They Fall Short

There's plenty to like about new federal rules that will force airlines to treat passengers better. When booking a flight, the airlines will have to disclose all the potential ancillary fees such as the evil checked-bag fee you could get smacked with. The Department of Transportation also increased the fee airlines will have to pay customers they bump from flights. With airlines having cut back on the number of flights and using the sardine-can strategy to fill planes, it's helpful to impose a strong disincentive for overbooking flights.

But the new rules, while good, could have been even better. Here are some of the key new rules that go into effect in late August, and how they fall short:

  • Lost bag? Your checked-bag fee will now be reimbursed. Adding to the annoyance of losing your baggage was the fact that you had to make a stink to customer service to get your $25 to $30 checked-bag fee reimbursed. Now the reimbursement is automatic.
How it could have been even better: Airlines should also have been required to reimburse the fee if your luggage is delayed, not just lost.
  • Hidden fees can't be so hidden. The new rules require airlines to "prominently display" on their website all the ancillary fees you can get hit with. According to the Consumer Travel Alliance, airline passengers forked over more than $9 billion in these extra fees last year. So no surprise, the airline industry fought this one vociferously with the grade school argument of "well, why are you punishing me if he does it, too?" This is from a letter sent by an airline trade association to Congress:

"Interestingly, there is no proposed government mandate (nor should there be) that would require hotels, for example, to disclose at the time of booking the myriad optional fees (room location, beverages, parking, cancellation charges, to name but a few) that a guest may encounter while staying at a hotel."

How it could have been even better: Even though the airlines lost on this, it sure looks like there is plenty of wiggle room. Something tells me lawyers for the airlines are working overtime discussing what the heck "prominently" means. A truly consumer-friendly rule would have required the airlines to provide a line-item list of additional charges right along with your quoted price. Instead, those fees just have to be "prominently" displayed on the website. There's no requirement, however, that the fees have to be on the same screen as that showing the cost of the flight.

One nice caveat to this shortcoming is that the new rules do require the airlines to include all the government taxes and fees in the quoted price, rather than letting them surprise you with it when you're paying up. Given that government fees can add 20 percent or more to the ticket price, having these costs included during your preliminary search can help you focus on affordability long before you get to the payment screen.

  • The cost to bump you doubles. Under the old rules, if you got bumped from a flight, you were entitled to a cash payout equal to the cost of the ticket if you were delayed up to two hours for a domestic flight, and up to four hours for an international flight. If the bump caused a longer delay getting to your destination, you could get double the price of your ticket, up to a maximum of $800. Under the new rules, an airline must now pay you double your ticket price for a short bump (up to $650), and quadruple your ticket price for a longer bump (up to $1,300).

How it could have been even better: The airline industry is quick to point out that involuntary bumping occurs at a rate of about 1 per 10,000 passengers. That sounds great until you realize there were 787 million passengers last year, so that still works out to more than 75,000 folks being bumped. Maybe the higher penalties will bring that rate down even lower, but it would have been nice if there was a more proactive regulation that directly addressed the airlines' practice of overbooking.

  • The tarmac pity rule now applies to international flights. Thanks to a late-2009 rule change, airlines already face humongous fines if a domestic flight sits on the tarmac for more than three hours. That's all but stopped the practice. According to the DOT, from May 2010 through February 2011 -- the first 10 months the rule was in place -- there were just 16 incidences of tarmac delays exceeding three hours, compared to 664 from May 2009-Feb 2010. But the rule didn't apply to international flights. Apparently, though, the tarmac odysseys at JFK following last December's NYC blizzard were the tipping point for the DOT. That unfortunate incident was cited by the DOT as a reason for its new rule that imposes penalties if an international flight sits on the tarmac for more than four hours.

How it could have been even better: Four hours? That's still a long time.

Photo courtesy flickr user cyanocorex

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