DOT: Airlines must refund fees for lost luggage

The Department of Transportation said Wednesday that it would require airlines to issue refunds of baggage fees when luggage is lost or delayed.

The new policy is among several additions to the so-called Passengers' Bill of Rights that most notably ordered fines for tarmac delays over three hours. Additionally, DOT will increase the amount that passengers can be reimbursed for being involuntarily bumped from a flight from $400 to $800 and allow fares to held for 24 hours after being quoted without payment.

Airlines have fought some of the changes, but Transportation Secretary Ray LaHood said Wednesday that “airline passengers have a right to be treated fairly."

“It’s just common sense that if an airline loses your bag or you get bumped from a flight because it was oversold, you should be reimbursed," he said. "The additional passenger protections we’re announcing today will help make sure air travelers are treated with the respect they deserve.”

The Air Transportation Association of America, an airline advocacy group, agrees.

“ATA appreciates that DoT shares our goal of providing safe, reliable transportation, treating customers fairly and providing the best service possible," ATA President Nicholas Calio said in a statement. "The airline industry supports increased communication and full transparency, ensuring that our customers always know exactly what they are getting every step of the way; and market forces — not additional regulations — are already providing customer benefits."

Calio, who joined ATA earlier this year, added that airlines have implemented customer service improvements recently.

"As the DoT statistics demonstrate, airlines already have made many service improvements and many of the regulations formalize procedures already in place, including prompt delay notification, one-way fare advertising, and irregular-operation contingency plans," he said. "We share the DoT goal of continuously improving the customer experience and our member airlines will implement the new rules as efficiently as possible."

Airlines took in more than $2.5 billion in baggage fees last year, according to statistics released recently by DOT's Bureau of Transportation Statistics.