DOT ANNOUNCES SWEEPING NEW CONSUMER PROTECTION REGULATIONS
October 21, 2016
Late Tuesday, the U.S. Department of Transportation (DOT) announced several new regulations aimed at further protecting consumers of air transportation. Specifically, DOT announced the publication of two Final Rules, as well as an Advance Notice of Proposed Rulemaking (ANPRM) and a request for information, all of which are aimed at spurring competition in the airline industry and giving consumers more information to make informed choices. We are in the process of reviewing all of these publications in depth, and will distribute more detailed summaries as applicable in the coming days. In the meantime, we have briefly summarized them below.
- Potential new Regulation: Refunding Baggage Fees for Delayed Checked Bags
DOT is soliciting public comments ahead of publishing a proposed rule that, if enacted, would require airlines to refund checked baggage fees when they fail to deliver bags in a timely manner. The FAA Extension Act of 2016 provides that DOT shall issue a final rule within one year of the enactment of the Act that requires U.S. and foreign carriers to promptly provide an automated refund for any ancillary fees paid by the passenger for checked baggage – if the carriers fail to deliver the bag to passengers within 12 hours of arrival for domestic flights and within 15 hours of arrival for international flights, if the passenger notifies the carrier about the delayed or lost baggage. DOT is seeking comment to help it determine the appropriate length of delay that would trigger the refund requirement, and this ANPRM will ultimately result in a requirement that airlines refund consumers’ baggage fees when their luggage is “substantially delayed”. Specifically, the Department seeks comments on how to define a baggage delay, and the appropriate method for providing the refund for delayed baggage. Interested carriers will have a chance to comment before a Final Rule is issued. Comments are due 30 days after publication in the Federal Register.
A copy of the ANPRM is available at:
- Final Rule: Enhancing Airline Passenger Protections III – 14 C.F.R. Parts 234, 244, 250, 255, 256, 257, 259, and 399
This Final Rule addresses the following issues and is effective 30 days after publication in the Federal Register:
- Transparency in Display of Code-Share Operations as Required by 49 U.S.C. § 41712(c) – the Final Rule amends the Department’s existing code-share disclosure regulation to codify the statutory requirement that carriers and ticket agents must disclose any code-share arrangements on their websites, requiring disclosure on the first display presented in response to a search of a requested itinerary for each itinerary involving a code-share operation. The Final Rule also adopts a simplified format for display of code-share disclosures via mobile websites and apps by permitting disclosure of the corporate name of the operating carrier. And, it enhances code-share disclosure in oral communication by requiring the disclosure be provided at the first time the flight is offered by a carrier or ticket agent or requested check luggage by a consumer.
- Data Reporting for Domestic Code-Share Partner Operations – the Final Rule requires reporting carriers to separately report the following data for domestic scheduled flights operated by code-share partners: on-time performance, mishandled baggage, and oversales. In addition, it allows a simplified data report for on-time performance of code-share flights if the operating carrier of the flights is a reporting carrier itself.
- Additional Reporting Carriers for Service Quality Data – the Final Rule expands the pool of reporting carriers from any carriers that account for at least 1% of domestic scheduled passenger revenue to any carrier that accounts for at least 0.5% of domestic scheduled passenger revenue. It also mandates reporting of data for scheduled flights to and from all large, medium, small, and non-hub U.S. airports.
- Prohibition of Undisclosed Bias – the Final Rule prohibits undisclosed biasing by carriers and ticket agents in any online displays of the fare, schedule or availability information of multiple carriers.
A full copy of the Final Rule is available at: https://www.transportation.gov/sites/dot.gov/files/docs/Final%20Rule%20Enhancing%20Airline%20Passenger%20Protections%20III_0.pdf
Interestingly, DOT has decided to delay rulemaking on some of the more controversial topics included in its original Notice of Proposed Rulemaking(NPRM). According to the Department, it will be issuing a Supplemental Notice of Proposed Rulemaking (SNPRM) to seek additional information on the disclosure of fees for basic ancillary services to consumers at all points of sale and the remaining topics discussed in the 2014 NPRM (e.g., customer service commitments by large ticket agents, prohibition on post-purchase price increases for ancillary services) will be addressed in another final rule that the Department plans to issue at a later date.
- Final Rule: Reporting of Mishandled Baggage and Wheelchairs
The second Final Rule issued by DOT changes the mishandled-baggage data that air carriers are required to report to provide more transparency for the travelling public. Air carriers must now report to DOT their total number of mishandled bags (as opposed to only reporting the number of Mishandled Baggage Reports filed, as well as the total number of checked bags. Additionally, this rule orders airlines to collect separate statistics for mishandled wheelchairs and scooters used by passengers with disabilities and transported in aircraft cargo compartments. This rule is also effective 30 days after publication in the Federal Register.
A full copy of this Final Rule is available at:
- DOT request for information on display of fares, schedules, and availability information
DOT is also investigating potentially unfair business practices by releasing a Request for Information (RFI) to solicit feedback from consumer groups, industry, and other stakeholders about the impact on consumers when airlines restrict access to schedule and fare information. Currently, some airlines prevent online travel sites from listing all fare and flight options. DOT will be looking into whether that kind of restriction is an unfair practice that makes it harder for travelers to find the most affordable and convenient flights that match their needs. We expect more information on this topic to become available in the coming weeks.
If you have any question on either of these topics please feel free to contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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