DOT Doubles Bumping Compensation

American Airlines MD-80 jets are seen parked at New York's LaGuardia Airport on Friday afternoon, April 11, 2008. In addition to arranging to provide more compensation for passengers who are 'bumped' involuntarily from their flights, the Department of Transportation has announced new slot-auction proposals for LaGuardia aimed at reducing congestion at the delay-plagued airport. Credit: AP Photo/Craig Ruttle

The U.S. Department of Transportation (DOT) has doubled the limit on compensation that airlines must pay passengers who are involuntarily bumped from their flights.

In other moves, the DOT is making airspace changes this summer to help reduce delays in the congested New York area, and is proposing new slot-auction initiatives for New York LaGuardia Airport aimed at reducing congestion at the delay-plagued airport.

Under the new bumping rule, which goes into effect in May, 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. They would receive up to $800 if they are not re-routed within that timeframe.

The new rule also covers more flights, extending the coverage to all flights operated by aircraft seating 30 people or more. The current rule only covers flights operated by aircraft with 60 seats or more.

Compensation-payment amounts are determined by the price of the ticket and the length of the delay. They 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,” said U.S. Transportation Secretary Mary Peters.

New air traffic measures to help cut delays

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, akin to adding another interstate highway lane in the sky. 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,” said Peters.

Congestion-pricing proposals for New York LaGuardia

The DOT 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 nation's top three airports for flight delays, said Peters.

Under a supplemental rulemaking, the DOT is proposing two market-based options that would require a limited number of landing 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 2 percent of the slots would be retired to help cut 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.

Peters said both options would 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.

ATA reacts angrily to LaGuardia proposals

However, the Air Transport Association (ATA), a Washington, D.C.-based trade association of which most of the larger U.S. airlines are members, reacted angrily to the DOT's LaGuardia proposals.

"It is truly mystifying, with the airline industry in a financial meltdown due to overwhelming fuel prices, that DOT decides now is the time for a costly economics experiment at LaGuardia," said ATA President and CEO James C. May.

"The solution to delays in New York is not figuring out how to charge airlines and their passengers more, as DOT proposes, but rather getting on with modernizing the antiquated air traffic control system," May added.

"The airlines and the Port Authority have worked in close cooperation with DOT in recommending concrete steps to add capacity and better manage schedule demands. While DOT is moving on 17 of those recommendations, which we appreciate, they are ignoring 60 others while wasting time and precious financial resources in ‘experimenting’ with increased costs to drive down demand," May continued.

"This proposal means fewer choices, higher costs and a reduction in service to smaller communities. The public does not want that, the Port Authority does not want that, and the airlines do not want that,” he said.

“More importantly, what the DOT has proposed will do nothing to reduce delays,” said May.

• Top 10 Ways to Avoid Air Travel Inconvenience
• It's Time to Think about Travel Insurance
• Top 10 Things You Need to Know when Kids Fly Solo