WASHINGTON -- Airline passengers would receive as much as $1,300 for being bumped from a flight and would have 24 hours to cancel reservations without penalty, among other consumer protections proposed Wednesday by the Obama administration.
Currently, airlines must pay up to $800 for involuntary bumping of passengers.
The new rules, which will likely go into effect later this year, would also require airlines to fully and prominently disclose baggage fees as well as refunds and expense reimbursement when bags are not delivered on time, provide special notice any time baggage fees are increased, and notify passengers buying tickets whether they must pay to check up to two bags.
Price increases after a ticket is purchased would also be prohibited under the proposal. Airlines would also have to give passengers timely notice of flight status changes.
The proposal would extend to foreign airlines a three-hour limit on the time airlines can keep passengers waiting on airport tarmacs. The three-hour limit went into effect for U.S. carriers in April.
Currently, airlines may limit compensation to $400 for involuntary bumping of passengers 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.
They limit compensation 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 increase the limits to $650 and $1,300, respectively, and adjust those limits every two years inflation every two years.
"This administration believes consumers are entitled to strong and effective protections when they fly," Transportation Secretary Ray LaHood said.
While acknowledging the financially troubled condition of the airline industry, LaHood said he believes airlines can factor the new rules into their schedules with causing disruptions in service.
James May, president of the Air Transport Association, which represents major carriers, said airlines would evaluate the proposals "with a focus on minimizing potential passenger inconvenience."
Bumpings due to overbooking are becoming a more frequent occurrence. They rose in three of the past four years and jumped 10 percent to 762,422 in 2009, the highest total since 2002. They soared 17 percent in this year's first quarter.
Airlines are required to first ask for volunteers before involuntarily bumping ticket holders. They can reward volunteers with travel vouchers, but people forced off flights must be paid in cash or check. Critics say airlines often flout that rule. The Transportation Department recently fined Southwest Airlines $200,000 for that and other shortcomings in its bumping practices.
When the government first regulated bumping three decades ago, passenger no shows were far more common. Today, with most airline tickets are deeply discounted and nonrefundable, no shows are much less of a problem. Planes are also more likely to be full due to cutbacks in airline schedules over the past two years. That means passengers who are denied boarding because a flight is overbooked often have a harder time finding a seat on another flight.
Interested parties have up to 60 days to submit comments to the Transportation Department. LaHood estimated DOT will finalize the new rules some time this fall.