Increases Compensation For Bumped Passengers; Proposes LaGuardia Caps

US Transportation Secretary Mary Peters announced Wednesday a series of new measures to strengthen airline passenger protections, improve consumer choice and reduce congestion -- including doubling the limits on compensation airlines must pay flyers bumped from oversold flights, and establishing operational improvements to cut delays this summer.

"We are taking steps to improve the travel experience, cut delays and lower fares in one of America's busiest aviation markets," Peters said.

The Department finalized changes Wednesday to Part 250, the so-called bumping rule, which doubles the limit on compensation airlines must pay passengers who are involuntarily bumped from their flight. Under the new rule, which goes into effect next month, fliers who are involuntarily bumped would receive up to $400 if they are rescheduled to reach their destination within two hours of their original arrival time or four hours for international flights, and up to $800 if they are not rerouted within that timeframe.

The new rule also covers more flights, including those operated with aircraft seating 30 people or more; the current rule covers flights with 60 seats or more. The amount of these payments are determined by the price of the ticket and the length of the delay, and are in addition to the value of the passenger's ticket, which the flyer can use for alternate transportation or have refunded if not used.

"It's hard to compensate for a missed family occasion or business opportunity, but this rule will ensure flyers are more fairly reimbursed for their inconvenience," Secretary Peters said.

Peters also announced new air traffic measures designed to help cut delays this summer. The first involves new and greater flexibility for aircraft to use alternative routes in the sky to avoid severe weather. This includes a new routing alternative that provides an "escape route" into Canadian airspace from the New York metropolitan area, so airlines can fly around summer thunderstorms and high winds.

In addition, the FAA will open a second westbound route for aircraft taking off from northeastern airports. This would in effect provide a parallel route along a heavily-traveled aviation corridor, helping cut westbound delays from the New York area. "By making better use of our skies, we are working to limit the impact weather has on travelers on the ground," Secretary Peters said.

The Department also is proposing a new way to manage congestion at New York's LaGuardia Airport. Even though this facility has been capped since 1968, it is still consistently one of the top three most delayed airports in the nation, she said. Under a supplemental rulemaking announced Wednesday, the Department is proposing two market-based options that would require a limited number of flights operated by the airlines in a given day, known as slots, to be made available through an auction process.

"This proposal increases choices for passengers and adds competition, which is proven to lower fares. It also cuts delays and funds new aviation capacity projects for the region," Peters said.

Under the first option, all air carriers would be given up to 20 slots a day for the 10 year life of the rule. Meanwhile, over the next five years, 8 percent of the additional slots currently used by an airline would be made available to any carrier via an auction. An additional two percent of the slots would be retired to help cut the record delays at the airport. Proceeds from the auction would be invested in new congestion reduction and capacity improvement initiatives in the New York region.

The second option also gives airlines permanent access to up to 20 slots a day for a 10 year period. Beyond those flights, 20 percent of the slots currently used by the airlines would be made available over the next five years to all airlines through an auction. Under this option, the carriers would retain the net proceeds of the auction.

The Secretary said both options provide financial stability to the airlines operating at LaGuardia by providing them with a defined right to operate at the airport for a decade, something they do not have today. These rights are given in recognition of the significant financial investment the airlines have made in the airport's infrastructure, she said.

"Our plan strikes a sound balance between protecting investments by incumbent carriers and ensuring that all airlines have the ability to fly to New York's LaGuardia," Secretary Peters said. "While the status quo at LaGuardia has led to stagnant service, delays and unnecessarily high fares, open access and competition will help give flyers more choices, fewer delays and lower fares."

Overall, the Secretary said improving the passenger experience is central to the Department's efforts and that she wanted to hear directly from travelers how they are being impacted by problems in the air travel industry. To do so, she has launched a series of Aviation Consumer Forums to hear from consumers and help educate air travelers about their rights and responsibilities.

The first DOT-hosted forum is scheduled for April 17, in Miami, to be followed by public meetings in Chicago and San Francisco in the near future.

FMI: www.fightgridlocknow.gov/aviation.htm