Should you pay airline for the bag it misplaced? U.S. says no

New protections make airlines more liable for missing baggage, late flights

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By Alan Levin and Michael Sasso, Bloomberg

The Obama administration has unveiled sweeping new consumer protections for airline passengers, including a plan to give travelers refunds when bags arrive late, which carriers called a harmful attempt to “re-regulate” the industry.

The U.S. government is also moving to require carriers to release significantly more information about tardy flights, make purchasing tickets more transparent and give consumers clearer data on the percentage of bags that get lost in transit.

“We are committed to a system of fair treatment and fair play for the 700 million passengers that will board 9 million domestic flights this year,” Transportation Secretary Anthony Foxx said at a White House briefing. “These new protections will do just that.”

The combination of executive actions and proposed rule changes are the third major effort at improving air-passenger consumer protections by the Obama administration. Some of the consumer measures would take effect soon while others, including the late-baggage proposal, may take more than a year.

Airlines reacted swiftly to the proposals, saying they would harm customers and ultimately drive up the cost of travel.

“Competition is alive and well in the airline industry, and all pricing information is available to consumer at the click of a button,” said Nicholas Calio, chief executive officer of Airlines for America, a trade group representing most large carriers. “Consumers have multiple information sources independent of airline sites.”

“Efforts designed to re-regulate how airlines distribute their products and services are bad for airline customers, employees, the communities we serve and our overall U.S. economy,” Calio said.

Delta Air Lines, which severed its ties with Airlines for America last year, said it already complies with many of the proposals put forth by the government or is willing to do so. That includes reporting the reliability of its regional airline affiliates. The airline said it opposes an administration plan to examine the withholding of fare information from some online ticket sellers, saying it needs the flexibility to cut off information from websites it calls “bad actors.”

The nation’s other major carriers — United Continental Holdings, American Airlines and Southwest Airlines — didn’t immediately respond to requests for comment or referred to their trade group’s statement.

Some lawmakers said the administration proposals didn’t go far enough.

“We need immediate action to ensure customers get an all-in-on price when shopping and full access to airline flights and schedules so they can comparison shop — not just promises of further review of these well-known problems,” Democratic Sens. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts said in a joint release.

The administration said it will explore making new regulations to require carriers to give customers more information about additional charges, such as fees for checking bags, securing seats and changing flights. The transportation agency will seek industry and public input on whether such changes make sense, stopping short of endorsing those changes.

The U.S. Travel Association, a trade group mostly representing non-airline businesses in the travel industry, praised the government plan, but said it should do more to promote the entry of low-cost carriers to help consumers.

Since a round of bankruptcies and mergers in the 2000s that shrunk the number of major U.S. carriers to four, most have begun generating significant revenue from charges for checking bags and other services. Last year they took in $3.8 billion for luggage fees, according to the Transportation Department.

In response to consumer complaints about the practice, Congress in July passed a measure requiring the government to examine whether to require carriers to refund bag charges if luggage arrives late.

Transportation officials are beginning that process by asking the industry and the public questions about how late bags must be for a refund to be issued, and how quickly the airlines should repay customers.

The administration also will require major airlines to include statistics on delays from regional carriers that operate under their brands. Currently, if a domestic flight operated by an airline partner is late, that information doesn’t always have to be reported. The new measure will go into effect in January 2017, according to the transportation agency. Smaller carriers that don’t currently report data on delays will have to do so under the plan.

As more people purchase airline tickets from online portals, the administration wants websites to disclose arrangements with airlines in which some flights are highlighted over others. The Transportation Department didn’t provide details of how such arrangements work or identify sites that take that approach.

The effort is part of an initiative by the administration to promote competition in U.S. business, Jason Furman, chairman of the U.S. Council of Economic Advisers, said Tuesday.

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