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Feds propose new airline passenger protections

By Marnie Hunter, CNN
New passenger protections are likely to be implemented in the fall, DOT Secretary Ray LaHood said.
New passenger protections are likely to be implemented in the fall, DOT Secretary Ray LaHood said.
  • Proposed rule would increase compensation for involuntarily bumped passengers
  • Rule would require airlines to fully disclose and prominently display baggage fees
  • Foreign airlines operating in U.S. would be required to have tarmac delay contingency plans

(CNN) -- Weary airline passengers may see some travel improvements if a new wave of passenger protections is adopted.

U.S. Transportation Secretary Ray LaHood announced a proposal Wednesday that would require more accountability from air carriers -- from increased compensation for bumped passengers to full disclosure of baggage fees and transparent price advertising.

Under the rule, the maximum compensation for passengers involuntarily bumped from flights would rise from the limits of $400 and $800 to $650 and $1300. Eligible compensation amounts depend on the length of the delay from the original scheduled arrival time, with a wider window allotted for international flights.

Among the 18 largest U.S. airlines, the rate of involuntarily bumped passengers in the first quarter of 2010 jumped to 1.73 per 10,000 passengers, up from 1.35 per 10,000 during the same period in 2009, according to DOT statistics. The number of involuntary bumpings has been climbing since 2007.

Capacity cuts prompted by the economic recession mean passengers who are bumped may have to wait longer to squeeze onto another packed flight.

Travel expert George Hobica, founder of, said the rule is likely to have an effect on overbooking, but the increased penalties may drive airfares up.

"I applaud the DOT for increasing the limits, which may discourage [airlines] from overbooking as much, but maybe the DOT should have said 'well, don't overbook,'" Hobica said.

The rule also calls for more thorough disclosure of fees and advertising that reflects an airline ticket's full price.

"Our proposed rule would drastically improve the consumer information airlines are required to post so that the consumers know what they are getting for their money," LaHood said at a news conference.

The rule would require baggage fees to be prominently displayed and fully disclosed, and passengers would be eligible for refunds of those fees when bags are not delivered on time.

Passengers would be allowed to make and cancel reservations within 24 hours without penalty under the rule. Carriers would be able to decide whether to provide refunds for passengers who cancel within that timeframe or to allow customers to make and hold reservations for 24 hours without payment, according to DOT officials.

The proposal also expands upon the tarmac delay rule that went into effect in April. Foreign airlines operating at U.S. airports would be required to develop contingency plans for tarmac delays and publish them to their websites. The rule also would be expanded to small and nonhub airports for U.S. carriers.

The new regulation was devised to respond to common passenger frustrations.

"There's no secret about what people get irritated about when they go to buy a ticket, when they get on an airplane, when they get stuck on an airplane," LaHood said.

"Anybody that's flown knows what the problems are with flying, and we tried to incorporate the most egregious, the most serious in this rule."

LaHood anticipates implementing the rule in the fall, following a 60-day public comment period and review of the feedback. The DOT encourages consumers to comment on the rule on