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U.S. Department of Transportation Proposes Rule to Require Airlines to Report More Data on Fees, Baggage and Mishandled Wheelchairs

The U.S. Department of Transportation (DOT) today proposed a new rule that will require airlines to report more information on the amount and types of fees collected from passengers, as well as the number of checked bags and mishandled wheelchairs. The proposal would revise current reporting requirements to improve data collection on the amount airlines receive from different, specific types of fees.

“Our goal is to improve the quality of data we collect from airlines and make airline pricing more transparent,” said U.S. Transportation Secretary Ray LaHood. “In an era of rising fees, passengers deserve better information about how airlines are performing, particularly when it comes to fees, baggage and accommodating passengers in wheelchairs.”

Airlines currently submit quarterly reports on revenue from baggage fees and reservation change fees to DOT’s Bureau of Transportation Statistics. Airlines received $3.4 billion from baggage fees and $2.3 billion from reservation change fees in 2010.

However, under current rules, revenue from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment, or any other ancillary items are reported in larger, combined categories and cannot be identified separately.

Notice of Proposed Rulemaking

Today’s Notice of Proposed Rulemaking (NPRM) proposes to require airlines to report 16 additional categories of fee revenue in addition to the baggage and reservation change fees. Identification of all ancillary fees and the amounts collected by each airline would improve information available to the public and help determine the impact of the increasing use of these fees on the Airport and Airways Trust Fund. Collection of data on fee revenue was recommended by the Government Accountability Office (GAO) in a July 2010 report.

The proposed changes to baggage reporting requirements will improve information useful to airline passengers. Currently, DOT compares the number of mishandled baggage reports to the number of passengers enplaned. With passengers checking fewer bags as a result of higher baggage fees, DOT tentatively believes passengers would have better information on airline service if the comparison is based on the number of checked bags. In 2010, carriers reporting on-time and mishandled baggage numbers posted a mishandled baggage rate of 3.57 per 1,000 passengers, an improvement over 2009's rate of 3.99.

Finally, many air travelers who use wheelchairs have indicated to the DOT that they are reluctant to travel by air due to concerns that their wheelchairs or scooters will be delayed or the equipment may arrive damaged. For this reason, the DOT is proposing to require more information about how well airlines meet the needs of passengers with mobility disabilities in order to understand and better address any problems.

The rulemaking proposed today is a part of the Department's broader effort to strengthen airline passenger rights and improve information available to the public. It is also consistent with the recommendation of the Future of Aviation Advisory Committee to bring greater transparency to airline pricing, including ancillary fees. In December 2009, the DOT finalized a rule that, among other things, prohibited lengthy tarmac delays, which in its first 12 months nearly eliminated extended tarmac delays. DOT also issued a final rule in April 2011 that expands the current ban on lengthy tarmac delays to non-U.S. carriers, requires airlines to reimburse passengers for bag fees if their bags are lost, provides consumers involuntarily bumped from oversold flights with greater compensation, and requires carriers to disclose hidden fees.

Friday, July 15, 2011