NewsIn Focus


Refund Rules in the Airline Industry

Proposed rule would require refunds for 'significantly' delayed baggage
Airline luggage
Posted at 4:55 PM, Oct 12, 2021
and last updated 2021-10-12 16:55:55-04

While the cruise industry grapples with a proposed rule to provide refunds for "non-performance," the U.S. Department of Transportation is considering something similar for airlines.

RELATED: Government agency flooded with cruise refund complaints now considering a rule change

Airlines are already required to compensate passengers for a canceled flight, but the new rule would require the companies to also refund customers baggage fees in case of "significantly delayed" luggage.

The proposed rule also adds a requirement for the airlines to refund any "ancillary services that were paid for but not provided."

The Department of Transportation gives the example of a passenger paying for wifi, but the wifi not working on the flight.

Based on comments from both individual airlines and lobbying groups representing several airlines, the industry seems overall receptive to the new rule.

One point of contention, however, is how the Department defines a "significant delay."

"According to comments submitted in response to the ANPRM, airlines generally support adopting the maximum lengths of delay allowed by the statute (18 hours for domestic flights and 30 hours for international flights). The airlines believe that any DOT requirement should provide carriers maximum flexibility to take into account the multiple variables that could impact their operations. Some airline commenters express concerns about the difficulties they encounter in delivering delayed bags for international long-haul flights they operate in low frequencies, which they state would take 24-48 hours. The National Air Carrier Association (NACA), Allegiant Air, and Spirit Airlines specifically expressed concerns about the difficulties Ultra Low-Cost Carriers (ULCC) face in transporting delayed bags due to their low frequency of scheduled flights and the lack of interline agreements with other carriers. The American Society of Travel Advisors (ASTA) and Consumers Union are in favor of adopting the minimum lengths of delay prescribed in the statute because they believe the default timeframes set by the statute are necessary to mitigate consumer harms resulting from delayed baggage and any extension of the default timeframes would “adversely affect consumers.” Some individual commenters suggested that the Department should adopt a tiered standard based on not only domestic versus international flights, but also on the length or frequency of the flights."
The US Department of Transportation

The DOT's response states, "The Department believes it is feasible for airlines to return a bag within 12 hours for domestic flights because airlines have tracking systems in place to identify the location of bags and airlines should be able to place delayed bags on the next available flight."

The Department also said it believes 25 hours is a reasonable deadline for international flights.

According to a DOT spokesperson, the next meeting to discuss this proposed rule is expected in the fall. As of October 12, the Fall Unified Agenda for Regulatory and Deregulatory Actions does not appear to have been published with a Spring agenda being the latest on the OMB's website.