El Al fined by government for “deceptive” luggage reimbursement rules

By | October 1st, 2010

Article 17 of the Montreal Convention holds airlines liable for loss of or damage to baggage, as long as it took place when it was in their possession. No exceptions.

It looks like El Al had a creative — and ultimately, flawed — interpretation.

At least that’s how the Transportation Department sees it. And the DOT has the power to fine El Al, which is exactly what it just did — to the tune of $30,000. Here’s the consent order (PDF).

The DOT’s Office of Aviation Enforcement and Proceedings, the nation’s airline cops, received a consumer complaint that El Al’s baggage policy wasn’t in line with the Montreal Convention. Specifically, the airline said it wasn’t liable for,

Loss of or delay in receipt of or damage to fragile or perishable items, medication, money, jewellery (sic) including watches, cameras, electronic equipment including computers, precious metals, silverware, negotiable papers, securities, or other valuables, business documents, or samples or goods intended for trade, passports and other identification documents, which are included in the passenger’s baggage or damage to overpacked or oversized baggage or to minor exterior damage to your suitcase or baggage parts such as wheels, handles, pockets, locks, zippers, attached items or scratches.

In other words, El Al wan’t liable for anything.

Interestingly, the government had warned airlines about luggage liability just last year. In an industry guidance document (PDF) dated March 26, 2009, the department reminded all airlines that in foreign air transportation, Article 17 prohibits them from applying blanket liability exclusions to any class or category of baggage that they have accepted for transport. The guidance also reminded carriers that violations of Article 17 constitute “unfair or deceptive business practices and unfair methods of competition” in violation of 49 U.S.C. § 41712.

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Maybe El Al didn’t get the memo.

According to the government, El Al continued to violate the Montreal Convention even after it clarified its rule.

Despite the explicit terms of Article 17, more than a year after the Enforcement Office’s March 2009 guidance, the Enforcement Office found a number of complaints indicating that it was EL AL’s practice to completely deny liability for the loss or pilferage of certain checked items in a passenger’s checked baggage, in contravention of Article 17.

What does El Al have to say for itself? It was going to change its rules. Really.

EL AL states that it is committed to complying with the Department’s consumer protection requirements. Indeed, EL AL asserts that it was, at the time it received the initial inquiry from the Department, already in the process of changing its General Conditions of Carriage and the terms and conditions applicable to EL AL’s Guidance on Airline Baggage Liability and Responsibilities of Code-Share Partners Involving International Itineraries.

That’s something to keep in mind, next time you read an airline’s “rules” — they are always trumped by federal law. And international law.

(Photo: Carib b/Flickr Creative Commons)

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