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US DoT proposes that fees be refunded for delayed bags

19-Apr-2011

The US Department of Transportation (DoT) has proposed that airlines which fail to reunite passengers with their bags on arrival be forced to refund any fees that were levied for carriage of said luggage. Over the past few years, fees for checked luggage on most US airlines have not only appeared but also steadily increased.

Additional cost should bring better service

Since their imposition, some passengers have insisted that additional payment should be accompanied by improved service. Now, the DoT has proposed that if a bag is not delivered in a “timely manner” that the passenger receive a full refund of any charges that have been paid.

The industry rate was 3.49 lost bags per 1000 passengers in 2010, down from 3.88 in 2009.

Airlines opposed

The airlines, which have added some USD3.3 billion to the bottom line through the collection of baggage fees, are nonetheless opposed. The Air Transport Association of America, a group that represents the interests of the airlines, has suggested that any such refunds should be left up to the individual airlines and used as a competitive advantage.

However, recent history has shown that with few exceptions the airlines’ primary focus is to garner as much ancillary revenue as possible. At present only two airlines, Alaska and Delta, do provide reimbursement, but rather than refunding the payment, they issue travel vouchers which only have value if they are used for future transportation.

The only way a refund can currently be claimed is if the bag is permanently lost or damaged beyond repair, in which case the fee can be claimed as part of the final settlement.

Consumers see some hope

In defense of the new plan, the American Society of Travel Agents noted that if charges for baggage are levied, “it is only reasonable” that passengers be reimbursed when there is a failure of service.

The airlines claim that such a system would involve additional cost and might further increase the charges. However, with a USD3.3 billion revenue stream available, and the rate of lost bags falling somewhat in recent years, it will be difficult to convince both the DoT and passengers that implementation of the rule will cause undue financial hardship for the carriers.


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