Government to airlines: limiting lost-luggage compensation “a violation” of regulations

airportterminalThe Transportation Department has warned airlines against limiting compensation for passengers who purchase necessities because their baggage is lost or delayed.

In a notice (PDF) issued today, the government said policies that arbitrarily limit reimbursement are a violation of federal regulations.

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“Travelers should not have to pay for toiletries or other necessities while they wait for baggage misplaced by airlines,” Transportation Secretary Ray LaHood said in a prepared statement. “We expect airlines to comply with all of our regulations and will take enforcement action if they do not.”

LaHood’s tough talk comes on the heels of a record $375,000 fine against Spirit Airlines last month.

The Department’s Aviation Enforcement Office said that a number of carriers have policies stating that they will reimburse passengers only for buying necessities purchased more than 24 hours after arrival and limiting such reimbursements to the outbound legs of trips.

These policies may be contained in contracts of carriage or, more often, in informal printed advisory handouts available from ticket counters or carrier agents.

For example, we are aware of one such advisory handout that denies any reimbursement “for necessities” where the baggage is “expected” to reach the passenger within 24 hours of filing a delayed baggage report and limits reimbursement to actual expenses up to a fixed maximum amount per day after the first day.

Also, some carriers may be providing reimbursement to passengers for incidental expenses incurred only after the outbound leg of a roundtrip.

“This is in violation of DOT regulations which require that airlines cover all expenses caused by lost or delayed baggage up to $3,300 per passenger on domestic flights,” according to the government.

What should airlines do? The DOT wants them to review their policies and contracts and amend them accordingly.

These should not include terms setting arbitrary limits on reimbursement, apart from those set forth in Part 254. If appropriate, carriers should promptly modify any printed documents, such as internal
procedures and guidance and consumer informational materials, to conform to the Department’s rules and this guidance.

What if they don’t? The government is giving airlines 90 days to comply, after which it will “pursue enforcement action in the appropriate cases where unlawful reimbursement policies are not corrected.”

(Photo: thewamphyri/Flickr Creative Commons)