New rules to ban hidden airline fees
Full disclosure of fees and taxes will make shopping for airfares easier for travelers.
This post comes from Mark Huffman at partner site ConsumerAffairs.com.
The reason airlines charge fees for checked bags and peanuts is so they don't have to raise their fares as much. If airlines had to raise fares to reflect the true cost of flying, passengers might be less likely to fly, or would choose another airline.
But the fact is, consumers end up paying what amounts to a higher fare, when you factor in fees. So wouldn't it be better if consumers knew what they were going to be paying to get from, say, Cleveland to Kansas City? Post continues after video.
The U.S. Department of Transportation thinks so and has issued new rules requiring airlines to be more upfront about the fees they charge. They don't limit those fees, but just require that they be fully disclosed. Advertisements, for example, will have to disclose the full price, including taxes.
The new rules also require airlines to increase the compensation paid to passengers who are involuntarily bumped from flights. For the longest delays, this compensation could now be as much as $1,300.
You don't pay for lost bags
The rules also require airlines to refund checked-bag fees if those bags are lost during a flight. And the four-hour limit for domestic flight tarmac delays will be expanded to include international flights.
"Airline passengers have a right to be treated fairly," said Transportation Secretary Ray LaHood. "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. The additional passenger protections we're announcing today will help make sure air travelers are treated with the respect they deserve."
Specifically, the new rules require airlines:
- To refund any fee for carrying a bag if the bag is lost. Airlines are already required to compensate passengers for reasonable expenses for loss, damage or delay of luggage.
- To prominently disclose all potential fees on their websites. Also, airlines and ticket agents will be required to refer passengers both before and after purchase to up-to-date baggage fee information, and to include all government taxes and fees in every advertised price.
- To increase the amount of money passengers are eligible for if they are involuntarily bumped from an oversold flight. Currently, bumped passengers are entitled to cash compensation equal to the value of their tickets, up to $400, if the airline can get them to their destination within a prescribed amount of time and to double the price of their tickets, up to $800, if they are delayed for a lengthy period of time. Under the new rule, bumped passengers subject to short delays will receive compensation equal to double the price of their tickets up to $650, while those subject to longer delays would receive payments of four times the value of their tickets, up to $1,300.
- To allow 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.
- To promptly notify consumers of delays of more than 30 minutes, as well as cancellations and diversions.
- To refrain from post-purchase fare increases unless they are due to government-imposed taxes or fees, and only if the passenger is notified of and agrees to the potential increase at the time of sale.
Most of the rules are set to take effect in about four months.
More on ConsumerAffairs.com and MSN Money:
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Even those who don't like to shop are probably hitting the stores this month. Here's what to be on the lookout for and here's what to avoid.