Wednesday, August 24, 2011

New Passenger Protection Rules Expand Reach of Existing Rules and Increase Fines

As a follow up to yesterday's post, here is an expanded description of the new DOT rules that just took effect. The main takeaway is that these new restrictions do little to regulate the airline industry in new ways, but instead apply existing regulations to previously unaffected entities and increase the penalties for violating certain regulations. Broken down by category, here are the changes:

Expansions of existing regulations

  • The required compensation for lost, damaged or delayed luggage must now include a refund of any baggage fees paid on the affected luggage.
  • Airlines must now disclose all optional fees on their web sites.
  • The three-hour limit on tarmac delays for domestic flights now applies to flights at small-hub and non-hub airports.
  • The four-hour limit on tarmac delays for international flights now applies to foreign carriers (mentioned in yesterday's post).

Fine increases for violating existing regulations

  • Passengers who are bumped and delayed for a short time will now be entitled to compensation equal to double the price of their one-way ticket, up to $650. Previously the compensation had only been equal to the price of the ticket and capped at $400.
  • Bumped passengers who experience longer delays will now be entitled to compensation equal to four times the price of their one-way ticket, up to $1,300. Previously the required compensation was for twice the price of the ticket with a limit of $800.

Aside from the potential implications, noted yesterday, of extending the tarmac delay requirements to foreign carriers, these new rules hardly break new ground. Unless one has strong feelings about the optimal penalty amounts opinions of the latest rule are unlikely to be much different than when the DOT first entered this area in late 2009.

http://lawprofessors.typepad.com/aviation/2011/08/new-passenger-protection-rules-expand-reach-of-existing-rules-and-increase-fines.html

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