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NPRM Refunding Fees.Pdf DEPARTMENT OF TRANSPORTATION Office of the Secretary 14 CFR Parts 259 and 260 [Docket No. DOT-OST-2016-0208] RIN 2105-AE53 Refunding Fees for Delayed Checked Bags and Ancillary Services that Are Not Provided AGENCY: Office of the Secretary (OST), Department of Transportation (DOT or the Department). ACTION: Notice of proposed rulemaking (NPRM). SUMMARY: The U.S. Department of Transportation (Department or DOT) is proposing to mandate refunds for delayed checked baggage and ancillary fees for services related to air travel that passengers did not receive. DOT is required by law to issue regulations mandating both refunds. DATES: Comments should be filed by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN FEDERAL REGISTER]. Late-filed comments will be considered to the extent practicable. ADDRESSES: You may file comments identified by the docket number DOT-OST-2016-0208 by any of the following methods: • Federal eRulemaking Portal: go to https://www.regulations.gov and follow the online instructions for submitting comments. • Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave. S.E., West Building Ground Floor, Room W12-140, Washington, D.C., 20590-0001. • Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 1200 New Jersey Ave. S.E., Washington, D.C., between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. • Fax: (202) 493-2251 Instructions: You must include the agency name and docket number DOT-OST-2016-0208 or the Regulatory Identification Number (RIN) for the rulemaking at the beginning of your comment. All comments received will be posted without change to https://www.regulations.gov, including any personal information provided. Privacy Act: Anyone is able to search the electronic form of all comments received in any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT’s complete Privacy Act statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you may visit http://DocketsInfo.dot.gov. Docket: For access to the docket to read background documents and comments received, go to https://www.regulations.gov or to the street address listed above. Follow the online instructions for accessing the docket. FOR FURTHER INFORMATION CONTACT: Clereece Kroha, Kimberly Graber, or Blane Workie, Office of Aviation Consumer Protection, U.S. Department of Transportation, 1200 New Jersey Ave. S.E., Washington, D.C., 20590, 202-366-9342 (phone), 202-366-7152 (fax), [email protected], [email protected], or [email protected] (e-mail). SUPPLEMENTARY INFORMATION: I. INTRODUCTION A. Purpose The purpose of this NPRM is to ensure that travelers are treated fairly when requesting refunds for ancillary service fees by implementing two statutory aviation consumer protection provisions. The first statutory provision is 49 U.S.C. 41704, note, which requires the Department to promulgate a regulation that mandates that airlines refund checked baggage fees to passengers when they fail to deliver checked bags in a timely manner. Currently the Department’s regulations at 14 CFR part 259 require that airlines refund baggage fees for lost bags. The Department proposes to add a requirement that airlines must also refund passengers for any fee charged to transport a checked bag that is not timely delivered. The NPRM sets forth the standards to be used to determine the length of delay that would trigger the requirement to refund baggage fees. It also addresses the statutory requirement that a baggage fee refund should be provided “promptly” and “automatically” when it is due. The second statutory provision is 49 U.S.C. 42301, note prec., which requires the Department to promulgate a rule that mandates that airlines promptly provide a refund to a passenger of any ancillary fees paid for services related to air travel that the passenger does not receive. Currently the Department’s regulations at 14 CFR part 259 require that airlines refund fees charged to a passenger for optional services that the passenger was unable to use due to an oversale situation or flight cancellation. In addition, the Department’s Office of Aviation Consumer Protection (formerly known as the Office of Aviation Enforcement and Proceedings), a unit within the Office of the General Counsel which enforces aviation consumer protection requirements, considers any airline practice of not refunding fees for ancillary services that passengers paid for but are not provided to be an unfair or deceptive practice in violation of 49 U.S.C. 41712.1 The Department proposes to retain the existing requirement regarding ancillary fee refunds arising from flight oversales or cancellations. The Department also proposes to clarify that the refund requirement applies to any situation in which an airline fails to provide passengers the ancillary services that passengers have paid for (e.g., passengers paid for using the in-flight entertainment (IFE) system but the IFE system was broken and could not be used by the passengers). The inclusion of regulatory text requiring that airlines must refund ancillary fees for services related to air travel that passengers did not receive, as provided in 49 U.S.C. 42301, note prec., would not impose additional requirements on airlines as airlines are already 1 The Department’s Office of Aviation Consumer Protection uses its general authority to prohibit unfair or deceptive practices of air carriers, foreign air carriers, and ticket agents to conduct oversight in the area of refunds. A practice is ‘‘unfair’’ to consumers if it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition. A practice is ‘‘deceptive’’ to consumers if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter. These definitions are consistent with the Department’s past practice and are based on case precedent and policy of the Federal Trade Commission. providing refunds of ancillary fees when they fail to provide services that passengers paid for, consistent with the Department’s interpretation of section 41712. B. Unfair or Deceptive Practice The provision at 49 U.S.C. 41712 authorizes the Department to investigate and, if necessary, take action to address unfair or deceptive practices or unfair methods of competition by air carriers, foreign air carriers, or ticket agents. On December 7, 2020, the Department issued a final rule that, among other things, adopted definitions for the terms “unfair” and “deceptive” when used in discretionary aviation consumer protection rulemaking actions brought pursuant to section 41712.2 That rule also requires that when the Department issues a new discretionary aviation consumer protection rulemaking declaring that a specific practice in air transportation or the sale of air transportation is unfair or deceptive within the meaning of section 41712, the Department shall employ the definitions of “unfair” and “deceptive” set forth in 14 CFR 399.79. This rulemaking, which would implement statutory mandates, is not a discretionary aviation consumer protection rulemaking. As a result, the procedures set forth in the Department’s rule on Defining Unfair or Deceptive Practices would not apply. II. REFUNDING BAGGAGE FEES FOR DELAYED BAGS A. Background The Department’s aviation consumer protection regulation, in 14 CFR 259.5(b)(3), requires carriers to provide refunds of baggage fees to passengers when their checked bags are lost. The provision at 49 U.S.C. 41704, note requires that the Department issue a final rule requiring an air carrier or foreign air carrier to promptly provide to a passenger an automated refund for any fees paid by the passenger for checked baggage if (1) the carrier fails to deliver the checked baggage to the passenger not later than 12 hours after the arrival of a domestic flight, or not later than 15 hours after the arrival of an international flight; and (2) the passenger has 2 See Final Rule, Defining Unfair or Deceptive Practices, 85 FR 78707, Dec. 7, 2020. notified the air carrier or foreign air carrier of the lost or delayed checked baggage. In addition, the Department can extend one or both of the deadlines, up to 18 hours for domestic flights, and up to 30 hours for international flights, if the Department determines during the rulemaking process that one or both of the shorter deadlines is not feasible and would adversely affect consumers in certain cases. In addition, 49 U.S.C. 41704, note does not define what constitutes “promptly” when providing an “automated” refund. Accordingly, the Department published an advance notice of proposed rulemaking (ANPRM) to seek public comment on the terms and implementation of the statutory provision (81 FR 75347, October 31, 2016). As noted in the ANPRM, many consumers and consumer rights advocacy groups have emphasized to the Department that delayed delivery of checked bags greatly inconveniences passengers and urged that airlines be required to reimburse passengers for baggage fees when bags are delayed. Some have asserted that lengthy delays may render the bag transportation service useless to consumers. The Department shares consumers’ concern about the inconvenience and frustration associated with delayed bags. According to data collected by the Department’s Bureau of Transportation Statistics (BTS), in calendar year 2019, the largest 10 U.S. carriers and their branded codeshare partners collectively mishandled nearly 3 million bags from passengers they transported on domestic scheduled flights.3 Although the mishandled baggage data collected by the Department does not distinguish among lost, delayed, damaged, and pilfered bags, data published by an aviation analytics firm show that delayed bags are by far the most common type of mishandlings.
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