Wednesday, April 20, 2011
The U.S. Department of Transportation has issued its final rule establishing penalties for tarmac delays on international flights and lost baggage. See Enhancing Airline Passenger Protections, Final Rule Dkt. No. OST-2010-0140 (Dep't of Transp. Apr. 20, 2011) (available here). Under the new penalty scheme, airlines which leave passengers on the tarmac for more than four hours may be fined as much as $27,500. Additionally, passengers bumped off of flights may be eligible for up to $1,300 in compensation.
It's difficult to discern the logic behind imposing such burdensome regulations on the airline industry at a time when air carriers are facing rising operating costs. Arguably, the DOT should have left the matter of delays and cancellations for the market to sort out. Airlines which develop a reputation for bumping passengers without attractive compensation or stranding passengers on the tarmac will be penalized by a loss of business. Moreover, when serious delays do occur, it's important to bear in mind that they are typically beyond the airlines' ability to control. Even without the threat of government penalities, delays impose substantial operating costs on airlines. They have no "incentive" to leave their planes on the tarmac or thwart their customers' travel plans.