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White House turns up the heat on airlines with baggage refund rule

By Ben Ames | October 19, 2016 | 1:08 PM

More than 700 million passengers are expected to board nine million domestic airline flights in America this year, and many of those travelers pay extra fees to check their baggage.

Now airlines may have to refund those $25 or $50 handling fees for each bag that is delayed in transit, according to a new rule proposed Tuesday by the Obama Administration. Airlines are already required to reimburse passengers for bag fees if their bags are lost, so the new rule would extend that policy to bags that are delayed.

Airlines face a complex challenge in tracking bags as they whisk through the skies above Rhode Island, North Dakota, or New Mexico, touch down briefly at a hub like Atlanta or Denver, and then take off again for final destinations. If approved, the new rules could make them rethink the way they charge for that service.

Just as online retailers are groaning under the weight of shipping and handling fees to support American consumers’ online shopping habit, airlines are trying to recoup the costs of material handling and the effort to track travelers’ bags along airport conveyors, tarmac freight cars, and airplane cargo bays. But instead of promising free shipping or express delivery like Amazon.com and other e-commerce giants, most airlines have followed a very different strategy—charging travelers extra to check their bags at all.

The problem with that strategy is that when an airline provides delayed delivery, it is not holding up its end of the bargain, the White House says. “Passengers should not be charged for services they do not receive,” the U.S. Department of Transportation said.

The proposed regulations would also require large U.S. airlines to overhaul the methodology they use to report mishandled baggage, so that passengers are better informed of their actual chances of receiving their checked baggage in a timely manner. Another proposed change would require airlines to share fee information for services—such as checked baggage or priority boarding—with ticket agents, so that customers can get an all-in-one price when they shop online.

The industry group Airlines for America has announced it plans to contest the proposed new regulations on the basis that airlines themselves have the best incentive to provide competitive fees and services.

 

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