The U.S. Department of Transportation has decided to delay the implementation of some of its new passenger rights rules until January 24, 2012. Several carriers, carrier associations and travel associations had requested that DOT delay the effective date of certain provisions of the rule because they will require deployment of additional IT resources, development of new protocols and training of personnel. Additional reasons for the delay request were undue costs of implementation to the airlines, impracticality of implementation, and confusion to the traveling public. Some airlines have also commenced legal challenges to some of the requirements. Most of the requirements went into effect August 23, 2011. However, after consideration, DOT agreed to delay implementation of some rules, until January 24, 2012. Those portions of the new rules scheduled to go into effect January 24, 2012, include:

  • Requirements concerning full fare advertising; [399.84]
  • Requirements concerning baggage fees; [399.85(b) and (c) and 399.87]
  • Requirements banning post-purchase price increases [399.88 and 399.89];
  • Requirements allowing passengers to hold a reservation without payment or to cancel it without a penalty, for 24 hours after the reservation is made, if the reservation is made one week or more prior to a flight's departure date; [259(b)(4)]
  • Requirements concerning flight status notifications; [259.0]

Partial Recap of Passenger Rights Rules

As a partial recap of some of the more important requirements, the new rules include greater passenger protection during lengthy tarmac delays, require increased denied boarding compensation, detail requirements of a carrier's Customer Service Plan, specify certain air carrier website requirements, and impose requirements for addressing passenger complaints. The new passenger protection rules are additions to 14 CFR Parts 244, 250, 253, 259 and 399.

Increased Compensation for Involuntary Denied Boarding

Involuntary denied boarding ("bumping") is recognized by DOT as a legitimate practice by airlines to regulate passenger load. Under new regulations, however, a passenger who is involuntarily denied boarding will get significantly more compensation.

Previously, a passenger was entitled to double the one-way value of their ticket (up to $400) if the airline could get the passenger to their destination within one to two hours of their originally scheduled arrival time for domestic trips, and within one to four hours for international flights. If the passenger was delayed more than two hours for domestic flights and more than four hours for international flights, they were entitled to twice the one-way value of their ticket, up to $800.

Under the new rule, bumped passengers will get double the one-way price of their ticket (up to $650) for the shorter delays, and four times the one-way vale of their tickets (up to $1,300) for the longer delays. As was true previously, the passenger is not entitled to compensation if the airline is able to get the passenger to his or her final destination within one hour of the original arrival time. The amounts will be adjusted for inflation every two years. Special rules apply for "zero fare" tickets, such as frequent flyer award tickets.

Significantly, the compensation for bumped passengers is calculated off the fare for the particular flight from which the passenger is "bumped", not the round trip ticket price. Further, if the passenger is on a connecting flight, the mandatory payment applies only to the segment from which the passenger is involuntarily bumped, not the entire one-way ticket value. The rules for bumping only apply to flights on aircraft designed to hold 30 or more passengers.

The thought process behind these new "bumping" rules is that the more expensive it is for airlines to bump passengers, the less likely they are to overbook flights. Higher compensation required by the new rules may mean airlines will offer larger value vouchers to passengers to voluntarily give up seats so they can avoid expensive involuntary denied boarding compensation. Further, with the airlines flying fewer, fuller flights, rebooking bumped passengers will only get more difficult. According to the Air Transport Association, a little less than 1 out of every 10,000 passengers in the first half of 2011 was involuntarily bumped. Airline personnel should be trained to know that if a passenger is involuntarily bumped, the airline is required to provide the passenger with a written notice of his or her rights, and pay cash on the spot if that is the option chosen by the passenger, rather than a voucher toward future flights or alternative transportation. Further, passengers solicited to volunteer for denied boarding compensation must be informed as to all material restrictions on the use of the transportation vouchers offered in lieu of cash. If the passenger accepts the compensation and/or alternative transportation, he or she is not entitled to "denied boarding" compensation, and cannot later sue the airline for the same.

International Flights Tarmac Delay Rule

The rules require adoption of and adherence to a Contingency Plan for Lengthy Tarmac Delays, which must be coordinated with airport authorities, TSA and Customs and Border Protection. The rules also expand the airports at which airlines must adhere to the contingency plan to include small hub and non-hub airports, including diversion airports. Over a year ago, a three hour tarmac delay rule went into effect for domestic flights. As a result, an airline could not have an aircraft on the tarmac for more than three hours without returning it to the gate and allowing passengers to deplane. Initially, the rule was thought to lead to increased flight cancellations by airlines concerned about sending flights out into long delays. However, airlines have adapted with procedures such as bringing planes back to a gate if necessary, or not pushing planes out too soon into long delays. As a result, the number of flights delayed on the ground more than three hours has dropped substantially.

The new rule expands the tarmac delay rule to apply to international flights at U.S. airports, imposing a hard four hour time limit on tarmac delays. The rule covers both U.S. and foreign airlines operating international flights. All carriers subject to the tarmac rule will be required to report lengthy tarmac delays to DOT on a monthly basis. There are exceptions to these requirements for safety, security, and air traffic control-related reasons. Furthermore, after two hours, airlines have to provide adequate food and water, and must have working lavatories and provide any necessary medical treatment throughout the tarmac delay. Exceeding four hours on the tarmac may result in substantial government fines-up to $27,000 per passenger.

Air Carrier Website Requirements

Each carrier must post on its website its contract of carriage, contingency plan for lengthy tarmac delays, and customer service plan ("CSP"). The CSP is to include disclosures to passengers concerning lower available fares; information regarding flight delays, cancellations and diversions; baggage, reservation and refund policies; ADA policies; and other consumer and airline policies. Significantly, the CSP must include a plan allowing passengers to hold a reservation without payment, or to cancel it without a penalty, for 24 hours after the reservation is made, if the reservation is made one week or more prior to a flight's departure date. Air carriers are required to audit compliance with their plans, and provide the audit information to DOT upon request.

Response to Passenger Problems

Under the new regulations, each carrier must designate advocates for monitoring the effects of irregular flight operations on passengers. In addition, each air carrier must inform passengers how to file a complaint with the carrier, and provide written acknowledgement of each passenger complaint within 30 days, as well as a substantive responses to passenger complaints within 60 days.

Conclusion

Airlines will need to ensure that personnel are knowledgeable and adequately trained regarding the new requirements, and that new protocols and IT resources are in place to comply with the new regulations. DOT will no doubt closely monitor air carrier compliance.