Bumped travelers to get more cash

Compensation is boosted for those denied boarding

April 17, 2008|By Laura McCandlish | Laura McCandlish,SUN REPORTER

Airline passengers involuntarily bumped from oversold flights will receive as much as $800 in compensation - double the current limit - under new federal rules announced yesterday in a move the government hopes will increase protections for passengers bedeviled by increasing congestion and delays.

Such passengers rescheduled to arrive more than two hours late at their domestic destination will be entitled to twice the cost of their ticket, up to $800. Those delayed between one and two hours will receive the value of their ticket, up to $400. Any compensation is in addition to the value of the ticket, which the passenger can use for alternate transportation or have refunded if not used.

In addition, the new rule extends required compensation to smaller regional jets - those with 30 seats and up - a move the U.S. Transportation Department said was appropriate as big airlines increasingly use regional carriers to ferry passengers to connecting flights. Previously the rule applied only to passengers on planes with 60 or more seats.

The increase, scheduled to take effect next month, is the first in 30 years and comes as denied boardings have increased annually since 2004, reaching their highest rate in 10 years in 2007.

"We're trying to get it out in time before summer travel begins," said D.J. Gribbin, general counsel for the Transportation Department, who helped draft the rules change. "We need to make sure that passengers are compensated for the time they've wasted. It's overdue to be increased."

Passenger rights groups heralded the change, saying it should have come years ago. With airlines tightening capacity, more and more complaints come from travelers who are involuntarily bumped, said Kate Hanni, founder of the Coalition for an Aviation Passenger Bill of Rights.

But airline trade groups had resisted the increase, which comes at a time when the beleaguered industry is grappling with record fuel prices and resulting bankruptcies and mergers. Overbooking flights is a common practice for airlines, which want to be able to fill the seats of no-show customers.

"Without overbooking, no-shows would cause almost all fully booked flights to leave with empty seats," Bill Owen, the lead schedule planner for Southwest Airlines, wrote in an October post on the company's blog. "The potential for revenue lost due to no-shows could easily undermine Southwest's Low-Fare Leadership."

Southwest, which operates half the flights at Baltimore-Washington International Thurgood Marshall Airport, had the seventh-highest rate of involuntary bumps among the 18 U.S. airlines last summer. Atlantic Southeast Airlines had the most denied boardings, followed by Comair and its partner Delta Air Lines, according to government data.

Airlines could end up raising fares if the higher payments induce them to cut back on overselling their planes, said Daniel M. Kasper, managing director of LECG, a Cambridge, Mass., consulting firm that tracks the industry.

"By overbooking - that actually has the effect of holding ticket prices down a bit," Kasper said. "Going out with more empty seats will put pressure on them to raise prices across the board."

Any increases would come as airlines are raising various fees, such as charging for a second piece of checked luggage and imposing fuel surcharges.

Smaller regional carriers with legacy airlines said the change will particularly weigh on them. Regional carriers, such as Delta Connection carrier Comair, might be forced to drop service to less popular destinations, said Roger Cohen, spokesman for the Regional Airline Association.

"It's certainly going to hurt," Cohen said. "What the bumping rule is going to do is make it even tougher for airlines to continue to provide service to the smaller communities."

In addition to the bumping rule change, the Transportation Department announced measures to curb congestion at New York's crowded airports, where delays last summer had a domino effect at other airports.

Secretary Mary E. Peters said two new airspace routes will be opened out of New York. An emergency route through Canadian airspace could prevent weather delays by allowing airlines to avoid thunderstorms and high winds. The Federal Aviation Administration will also open a second westbound route to free up a heavily traveled "aviation corridor" out of New York.

Peters also proposed auctioning off slots to carriers at New York's crowded LaGuardia Airport.

Many delays at BWI last summer were tied to delays at LaGuardia and the New York area's two other main airports, John F. Kennedy and Newark Liberty.

"Any improvements to the congested Northeast airspace should have some benefit to BWI," said airport spokesman Jonathan Dean.

At BWI yesterday, arriving passengers had mixed feelings about the new measures.

Business traveler Brian Renda said that increasing compensation limits wasn't a solution for corporate customers. They need to arrive at their business destination on time, regardless of the payout, he said.

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