The proposal is part of a much larger executive order to revamp the economy, including airline competition issues
The Department of Transportation has proposed new rules that would require airlines to refund baggage fees when checked bags are ‘significantly’ delayed. Under the proposed rule, that would mean a bag not delivered to the passenger within 12 hours for domestic itineraries and within 25 hours for international itineraries.
Currently, passengers are entitled to baggage fee refunds only when their baggage is lost. The department estimates the proposed rule change could mean $10.7 million to $11.4 million annually in refunded baggage fees.
The proposal would also require the airline to automatically refund fees on any ancillary services the carrier failed to deliver – such as advance seat selection or onboard WiFi that does not work. Existing rules require only that the airline refund fees for ancillary services that were not provided because the flight was either canceled or oversold.
While the DOT reported airlines collected approximately $5.8 billion in baggage fees in 2019, the pandemic year of 2020 saw many ancillary fees reduced or dropped. That was one factor in higher satisfaction scores for airlines in the most recent J.D. Power survey of airline passengers.
The proposed rule changes, which will be open for public comment for 60 days, come as part of President Joe Biden’s executive order signed Friday that is intended to encourage competition across the economy.
Beyond the proposed consumer protections, the order directs the federal government to take on several other aviation related issues, including a review of airport slots and aviation market structure. Changes in those rules could have a big impact on airline competition and market access for low-cost carriers.
The order also requires DOT to submit a report within 45 days “to address the failure of airlines to provide timely refunds for flights canceled as a result of the COVID-19 pandemic.” The move is the latest government action on the question of how to reimburse travelers for flight cancellations.
Earlier this month, members of Congress renewed calls for airlines to offer passengers cash refunds or eliminate the expiration of travel credits for flights impacted by pandemic-related travel restrictions.