June 3, 2010 - U.S. Transportation Secretary Ray LaHood has proposed new consumer protections for air travelers, building on the Department of Transportation’s recent rule banning carriers from subjecting passengers to long tarmac delays and other deceptive practices.

Specifically, the new proposed rule would increase compensation for passengers involuntarily bumped from flights, it would allow passengers to make and cancel reservations within 24 hours without penalty, require full and prominently displayed disclosure of baggage fees.

In addition as well as refunds and expense reimbursement when bags are not delivered on time, prohibit price increases after a ticket is purchased, require fair price advertising and mandate timely notice of flight status changes.

The proposed rule also would increase the potential compensation for being involuntarily bumped from oversold flights. Currently, airlines may limit compensation for involuntary bumping on flights to $400 if the carrier arranges substitute transportation scheduled to arrive at the passenger’s destination one to two hours after the passenger’s original scheduled arrival for domestic flights, or one to four hours for international flights, and to $800.

If the substitute transportation is scheduled to arrive more than two hours later for domestic flights, or more than four hours later for international flights.  The proposed rule would quickly increase these limits to $650 and $1,300, respectively, and thereafter adjust the amounts for inflation every two years.

The Department also proposed a number of measures to make it easier for consumers to know how much they will have to pay for air transportation.  Carriers would be required to provide special notice any time baggage fees are increased, and to notify passengers buying tickets whether they must pay to check up to two bags.   It also asked for comment on several alternatives under consideration to provide greater access to air transportation to persons with severe peanut allergies.