Airlines protest proposed DOT luggage fee refund rule

You purchase tickets to fly to Los Angeles, and pre-pay your luggage fee. You arrive at the airport 2 hours prior to your flight and check-in your luggage.

At the LAX luggage carousel your bag never appears, so you file a claim and proceed to your hotel.

Just before retiring for the evening, there’s a knock on your hotel room door. The airline finally flew in your luggage to LA and delivered it to you. Of course, you didn’t have that fresh suit for your meeting that afternoon.

The next morning you call the airline to ask if they’re crediting your credit card or sending you a check for your luggage fee refund.

The airline’s representative says, …

“We’ll consider a refund, but you’ve got to apply for it in writing.” This scenario is played out daily. The airlines try their best to hold on to that luggage fee. Even when you get a refund, it’s usually in the form of a travel voucher, not cash.

Many US airlines charge an average checked-in luggage fee, of $25 for your first bag and $35 for an additional bag, for most of their passengers. As a result, during the 12 months ending in June, 2010, the top 10 US airlines collected more than $3.1 billion in baggage fees! Those $25 charges per bag really add up!

The airlines are getting better handling passengers’ luggage. In August, 2009, for example, airlines mishandled an average of 4.11 bags per 1000 passengers, but in the same month this year, the last one reported, mishandled bags were down to 3.50 per 1000 passengers, an almost 15% drop.

There’s little doubt that part of the improvement is attributable to the economy, but the airlines are working to improve in this area. They have great impetus to do so. Mishandled baggage cost airlines, worldwide, almost $3 billion in 2008, about $90 per bag.

US Airways, who had the best luggage handling record in August among the largest airlines, has spent millions improving their baggage handling, from upgrading their physical facilities at airports, to building their own centralized, real-time baggage monitoring system which includes scanning all bags at plane–side, during loading and unloading.

That’s good news about the improvement in handling passengers’ checked-in luggage, but I question the fairness of the airlines not automatically refunding baggage fees for lost, or delayed luggage. (Alaska Airlines does offer an automatic refund.)

Apparently, the US Department of Transportation (US DOT) also questions that fairness. On June 8, 2010 US DOT proposed new rules for the airlines, entitled “Enhancing Airline Passenger Protections” in the Federal Register. Among the proposals was the following section:

“Delivering baggage on time—The airline must make “every reasonable effort” to deliver mishandled bags within 24 hours; it must compensate passengers for reasonable expenses caused by the delay.”

Does the proposed rule make sense to you?

Does it surprise you to hear the Air Transport Association (ATA), representing most of the US’ largest airlines, oppose the requirement to refund baggage fees for lost or delayed luggage?

Here’s my translation of ATA’s arguments against the proposed rule requiring the airlines refund luggage fees when passengers’ luggage goes awry (You can read their exact words on page 28 of their Comments of the Air Transport Association of America concerning Docket DOT-OST-2010-0140):

• ATA asserts passengers can always choose to avoid paying the fee entirely if they want. They can use carry-on, or fly on Southwest or JetBlue (the only major US airlines not charging a luggage fee). They think passengers should rely on free enterprise to get a refund. Forgetting for a moment that Southwest and JetBlue aren’t available at every airport, and most people need to use checked-in luggage, what does this argument have to do with refunding a fee when a service isn’t provided?

• ATA asserts delivering a passenger’s luggage “timely” is a “arbitrary” standard. I’d like to ask any airline passenger if expecting their luggage to arrive at their destination, when they arrive, is “arbitrary.”

• ATA asserts that if they have to actually deliver your luggage on time, the airlines will have to raise their fees. Frankly, if luggage fee refunds for delayed or lost bags, cause a fee increase, the airlines, in my opinion, will have not done enough to ensure the on-time delivery of passengers’ luggage.

• Finally ATA asserts that US DOT cited no justification for the proposed rule. When I read that, I fell to the floor laughing. Can the airlines actually tell us they don’t understand, that not delivering their passengers’ luggage on-time, is the only justification needed to require a luggage fee refund?

Passengers should be able to expect their luggage will arrive at their destination with them. If not, at the very least, they should expect a cash refund of their luggage fee.