Global Airport News

US airlines must offer bag fee refunds for losing luggage, according to a new regulation aimed at holding carriers more accountable for service lapses that include 2 million lost bags annually.

The Transportation Department order to be unveiled on Wednesday also doubles the penalty for involuntarily "bumping" passengers from sold out flights and builds on steps initiated previously by the agency or ordered by Congress to address passenger complaints.

The airline industry relies on a range of fees for bags, drinks, preferred seating and other services to supplement what it collects in fares. Airlines collected more than USD$2.5 billion in bag fees alone last year, the latest government estimates show.

But passengers, transportation officials and members of Congress are frustrated with escalating airline-related prices, claims of hidden charges, and difficulty gaining redress if something goes wrong.

"It's just common sense that if an airline loses your bag or you get bumped from a flight because it was oversold, you should be reimbursed," Transportation Secretary Ray LaHood said in a statement.

Airlines, who want government to reduce regulation, taxes and fees, are already required to reimburse passengers for reasonable expenses if their luggage is lost or damaged.

But the new rule taps into bag fees, a particular sore spot with consumers who had to put up with 2 million lost bags in 2010, government figures show.

Airlines in recent years have charged up to USD$25 to check one bag and up to USD$35 for each additional piece of luggage that must be loaded and stowed under the cabin. Higher charges are imposed for oversized or overweight bags.

More than 700 million passengers fly annually but not all check bags.

In addition to the refund requirement, the new regulation also:

• Requires airlines to prominently disclose all potential fees on their websites, including for bags, meals, cancelling or changing reservations, and seating upgrades.
• Doubles the amount of possible compensation when passengers on oversold planes are "bumped" or involuntarily placed on another flight. Currently, "bumped" passengers can collect compensation equal to the value of their tickets — up to USD$400 — with certain restrictions.
• Expands the existing ban on lengthy runway delays to cover flights operated by overseas airlines at US airports.