Are the government’s new airline consumer protection rules good for passengers?

By | April 20th, 2011

After months of comments and deliberation, the Transportation Department this morning released its final consumer protection rules for airline passengers.

I covered the proposed rulemaking extensively on this site last year. Here’s a side-by-side comparison between the proposed and final rule (PDF).

I won’t bury the lede: We knew that the most talked-about issue in the proposed rulemaking was peanut allergies. It didn’t make it to the final regulation because of a bureaucratic error. It may never be addressed.

The most important issue — at least according to a survey of air travelers — was price disclosure for airline tickets.

And on that issue, the government appears to have punted.

The new rule would require U.S. and foreign air carriers to disclose so-called “ancillary” fees, including luggage fees, on their websites. But it will address fee disclosure at the point of sale — in other words, telling passengers the true “all-in” cost of an airline ticket — in a separate rulemaking.

That effectively resets the clock for the airline industry, giving it another year to offer tickets that don’t include the price of a checked bag, and collect billions in ancillary fees that it might otherwise not.

The rest of the rule changes, which take effect in four months, seem positive.

Among the rules:

• A provision that the price of an advertised ticket must include government taxes and fees imposed on a per-passenger basis. Previously, these extras were allowed to be excluded.

• A requirement that airlines refund any fee for carrying a bag if the bag is lost.

• A requirement that all domestic and foreign air carriers disclose all fees for optional services to consumers through a prominent link on their homepage.

Related story:   Is Hotwire's new advertising slogan, "2 1/2-star hotels. 3-star prices."?

• An increase in compensation for being involuntarily bumped from an oversold flight.

• Banning the practice of post-purchase price increases in air transportation or air tours.

• A requirement that all carriers that must adopt tarmac delay contingency plans to file data with the DOT regarding lengthy tarmac delays.

• Allowing reservations to be held at the quoted fare without payment, or canceled without penalty, for at least 24 hours after the reservation is made if the reservation is made one week or more prior to a flight’s departure date.

I have mixed feelings about this morning’s news. While DOT made some important steps toward protecting airline passengers, a lot of work still needs to be done.

What do you think?

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