USDOT Rulemaking on Refunding Fees for Delayed Checked Bags and Ancillary Services That Are Not Provided
September 16, 2021
As you may recall, the Department of Transportation issued a Notice of Proposed Rulemaking (NPRM) in which DOT proposed requiring airlines to provide refunds to customers for delayed baggage and unused ancillary services. To summarize, the first change would 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. The second change would require that airlines promptly provide refunds to passengers for any ancillary fees paid for services related to air travel that the passenger never receives.
In response to this, the International Air Transport Association has drafted comments to the proposed rule, which it plans to submit to the Department in the coming days, and has asked that interested airlines submit their own comments, or alternatively, submit comments in support of IATA’s comments.
DOT has requested that comments on this proposed rule be submitted by Monday, September 20, 2021. For your review, we have attached a template that may be used in order to provide general responses in support of IATA’s comments. On the other hand, if you would like to submit a more substantive comment addressing issues that are of particular interest to your airline, please let us know and we can help with drafting such a comment.
Also, as an FYI, we have summarized below the issues raised in IATA’s comments:
SUMMARY OF COMMENTS PROVIDED BY THE INTERNATIONAL AIR TRANSPORT ASSOCIATION
Comments on Rule Proposing Delayed Baggage Refunds:
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Length of Delay Triggering Refund Requirement:
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IATA asserts it would be very challenging for a carrier to deliver a delayed checked bag within the minimum length delay.
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IATA also expressed concern that the proposed 12 and 25 hour delay timeframes for domestic and international flights fail to take into account many factors that are outside of the airline’s control, including: (1) passenger travel that originates on the last flight of the day out of a particular airport; (2) the next available flight to transport a delayed bag might not have space available; (3) aircraft weight limitations; (4) passenger negligence (e.g., failure to pick up bags, traveling on two separate tickets, baggage contains dangerous goods); (5) passenger inadmissibility or deportation; (6) another passenger inadvertently claims the wrong checked bag; (7) labor strikes and work slowdowns; (8) severe weather conditions; (9) airport congestion; and (10) customs/security inspection.
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Domestic Segments of International Itineraries:
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IATA supports applying the international standard to the domestic segments of international flights.
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IATA agrees that carriers should not have to refund checked baggage fees in instances where a bag was available in the appropriate location at the first point of entry into the United States, to be picked up by the passenger for rechecking for a subsequent domestic flight segment on that itinerary, but the passenger failed to pick up the bag. IATA also agrees that airlines should not have to refund baggage fees when a passenger is traveling on two separate tickets and the passenger fails to collect the checked bag at the end of the first itinerary and check it with the carrier on the second itinerary.
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IATA supports a general exception for any circumstance that is outside of the airline’s control.
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Methodology for Measuring Length of Delay:
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IATA disagrees with the proposal to start the clock on a potential baggage delay when the passenger reaches his or her destination and is given the opportunity to deplane from the last flight segment. IATA suggests the clock should start when the passenger files a mishandled baggage report upon arrival.
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IATA supports the three options provided by DOT in the NPRM for stopping the clock on a potential baggage delay and believe they provide airlines and passengers with sufficient flexibility.
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Form and Evidence of Notification to Passengers:
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IATA asserts that DOT should specify a particular form of notification to passengers and that the final rule should adopt a performance-based notification standard that is focused on timeliness.
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IATA argues that DOT should not prescribe the form of record that a carrier must keep of the passenger notification since airline systems used to record vary greatly.
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IATA argues that passengers should be required to notify the airline about the delayed bag and give the carrier the opportunity to collect contact information from the passenger. If an air carrier does not receive a passenger’s contact information, it should not be obligated to notify the passenger or refund the passenger for the delayed baggage.
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Multiple Carrier/Ticket Agent Involvement and Responsibility
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IATA suggests that the entity that collects the checked baggage fee should be the one that provides the refund.
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Refund Mechanism and Passengers Notifying Carriers About Delayed Bags to Receive Baggage Fee Refunds:
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IATA argues that it is not overly burdensome for a passenger to be required to notify both the entity that collected the checked baggage fee and the last operating carrier in order to receive a refund.
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IATA argues that baggage transportation services that are either included as part of the fare or purchased as part of a baggage fee subscription service should not be subject to the refund requirement proposed in the NPRM.
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Oversized/Overweight Bag Fees:
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IATA does not support DOT’s position that the fees charged for oversized/overweight bags should be refunded in the same manner as for standard sized bags in the event of a qualifying delay.
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- Escalated Fee Scale for Multiple Bags
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IATA supports DOT’s proposal that if an airline charges an escalated baggage fee for each additional checked bag, assigns a specific fee to a specific bag, and can identify which bag is delayed, then only the fee for that bag should be refunded.
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IATA also agrees that if a carrier assigns a unique identification to each bag, but baggage fees were charged in a lump sum, then the refund for one delayed bag should be in the amount equal to the highest baggage fee per bag charged in that transaction.
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“Voluntary Separation” and Liability Waiver
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IATA supports DOT’s proposal that an exemption to the baggage fee refund requirement should be made if a passenger is informed there might not be enough time to load the bag on their flight, voluntarily agrees to travel without the checked baggage on the same flight, and signs a waiver of liability associated with the delayed bag.
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Alternative Transportation
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IATA supports DOT’s view that the baggage fee refund requirement should not apply when passengers voluntarily choose to not travel on their scheduled flight or a substitute flight offered by the carrier, by taking ground transportation that they arrange on their own, or by purchasing tickets on flights of another carrier.
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IATA supports DOT’s position that when a carrier arranges for alternative travel for passengers, either on ground transportation, on a later flight operated by that carrier, or on a flight by another carrier, the baggage fee refund requirement would apply, but IATA believes that the delayed bag calculation clock should start when the passenger files a mishandled baggage report.
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Comments on Rule Proposing Ancillary Fee Refunds:
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Scope of Ancillary Services:
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IATA supports DOT’s proposal to codify in the rule text a requirement that airlines must refund fees a passenger pays for an ancillary service that the passenger does not receive.
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IATA supports the Department’s proposed definition of an ancillary service.
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Refund Eligibility for Ancillary Services:
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IATA supports the idea that airlines should promptly refund an ancillary service fee they charged a passenger if the passenger did not receive the ancillary service for which they paid.
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IATA suggests that refunds should not be required when the service was available but was not used by the passenger, the passenger voluntarily changes or cancels their flight, or the passenger violates the check-in requirements, contract of carriage, or related policies.
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Prompt Refund
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IATA supports the DOTs proposal to apply the same ‘‘promptness’’ standards to refunding ancillary services fees when refunds are due that are currently applicable to refunds for tickets, optional services that could not be used due to an oversale, flight cancellation, and lost bags.
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Entity Responsible for Refund for Ancillary Services:
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IATA suggests that the entity that collects the ancillary fee should be the one that provides the refund.
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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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