DOT PROPOSES NEW RULE REQUIRING AIRLINES TO PROVIDE REFUNDS FOR UNUSED ANCILLARY FEES AND DELAYED BAGS
August 2, 2021
On Tuesday, July 20, 2021, the U.S. Department of Transportation (DOT or the Department) published a Notice of Proposed Rulemaking (NPRM), available here, concerning proposed requirements for airlines to provide refunds for delayed bags and unused ancillary fees.
The first proposed change would create a requirement under 49 U.S.C. 41704 for airlines to refund checked bag fees if the airline fails to deliver the delayed bags in a timely manner. Specifically, the regulation will require that airlines refund checked bag fees whenever a bag is delayed by more than 12 hours for domestic flight, or more than 25 hours for international flights (including those that comprise a domestic segment), or if a passenger notifies the airline of the lost or delayed checked bag. Under current law, airlines are only required to provide refunds to passengers if their bag is lost.
The NPRM also provides standards to be used to determine the length of a delay and how to determine if and when a refund is due, as well as detailing the statutory requirement that a refund be provided “promptly” and “automatically” when due. Under the proposed rule, the clock for calculating a delay will start when a flight arrives (defined as when the passenger reached their destination and is given the opportunity to deplane from the last flight segment). A bag will be considered delivered:
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When the bag is transported to a location agreed to by the passenger and airline, regardless of whether or not the passenger is present at the location to take possession of the bag;
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When the bag has arrived at the destination airport, is available for pickup, and the airline has given the passenger notice of the location and availability of the bag for pickup (in this instance the bag must be actually available for pickup upon notification); or
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If the airline has a delivery service and the passenger agrees to use this service, when the bag has arrived at the destination airport and the airline has provided notice to the passenger that the bag has arrived and will be delivered.
The NPRM states that each airline will have the ability to determine which of the above options to use in coordinating with each passenger.
DOT is also proposing a change under 49 U.S.C. 42301 related to ancillary fees, such as prepayment for Wi-Fi service or in-flight entertainment (IFE). Under the proposed rule, airlines will be required to provide a refund to a passenger, promptly, for any ancillary fees paid for services related to air travel that the passenger never received. Currently, airlines only have to provide refunds to passengers for optional services that could not be used due to certain occurrences including oversale situations and flight cancellations. This will be retained under the new rule. In the NPRM, DOT explains that the second proposed rule was included because its Office of Aviation Consumer Protection considers failure to provide refunds to passengers for unused ancillary services, that have already been paid for, to be an unfair and deceptive practice in violation of 49 U.S.C. 41712.
DOT is accepting comments on the NPRM until September 18, 2021.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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