U.S. to propose rules requiring airline refunds for delayed baggage

[July 03, 2021]  By David Shepardson and Diane Bartz

WASHINGTON (Reuters) -The Biden administration will soon propose new rules to require passenger airlines to refund fees for bags that are significantly delayed and refunds for services like onboard Wi-Fi that does not work, the White House said Friday.

White House National Economic Council Director Brian Deese confirmed the planned rules at a briefing that were directed by President Joe Biden, saying it is "part of a broader effort that the president will release shortly around driving greater competition in the economy in service of lower prices."

Under existing U.S. Transportation Department rules, passengers are entitled to a fee refund if bags are lost, but not when delayed. Under the proposed rule to be released in the coming days, a “significantly delayed checked bag” is one not delivered to the passenger within 12 hours for domestic itineraries and within 25 hours for international itineraries.

Airlines for America, a group representing major airlines, did not immediately comment.

Reuters reported the planned actions by the Transportation Department earlier Friday.

U.S. airline passenger traffic has jumped with rising vaccination rates, regularly topping 2 million daily passengers, which is about 75% of pre-pandemic levels.

The administration proposal would also require airlines to promptly refund fees – such as for advance seat selection, Wi-Fi and other flight services – if the passenger does not receive the service or it does not work, Deese said.

Under a forthcoming executive order on competition, President Joe Biden is directing the Transportation Department "to engage in a series of rulemakings to protect airline passengers and to promote fair competition in the airline industry," the source told Reuters.

A baggage claim employee grabs bags from an empty baggage claim area in Delta terminal at LaGuardia Airport in New York, U.S., March 21, 2018. REUTERS/Shannon Stapleton

U.S. airlines collected approximately $5.8 billion in baggage fees and $2.8 billion in change and cancellation fees in 2019, up from just $464 million in baggage fees and $915 million in change and cancellation fees in 2007.

The Transportation Department also intends to issue a separate proposed rule in coming months to require upfront disclosure of baggage fees, change fees and cancellation fees at the time a plane ticket is purchased, Deese confirmed.

The Biden administration held a call on Friday to discuss the issue with major airlines, two other sources said.

Reuters first reported the planned executive order earlier this week.

In 2018, Congress dropped plans to mandate “reasonable and proportional” baggage and change fees under heavy lobbying from U.S. airlines.
 

(Reporting by David Shepardson in Truro, Mass.; writing by Diane Bartz in Washington; Editing by Dan Grebler and David Gregorio)

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