Document ID: DOT-OST-2016-0208-0080
Agency: dot
Document Type: Proposed Rule
Title: Refunding Fees for Delayed Checked Bags and Ancillary Services That Are Not Provided
Posted Date: 2021-07-21T04:00Z

[Federal Register Volume 86, Number 137 (Wednesday, July 21, 2021)]
[Proposed Rules]
[Pages 38420-38433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13736]

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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).

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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 September 20, 2021. 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. SE, West Building Ground Floor, 
Room W12-140, Washington, DC, 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Ave. SE, Washington, DC, 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.

[[Page 38421]]

    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. SE, Washington DC, 20590, 202-
366-9342 (phone), 202-366-7152 (fax), clereece.kroha@dot.gov, 
kimberly.graber@dot.gov, or 99fbf5f8f7fcb7eef6ebf2f0fcd9fdf6edb7fef6ef (email).

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 
providing refunds of ancillary fees when they fail to provide services 
that passengers paid for, consistent with the Department's 
interpretation of section 41712.
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    \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.
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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.
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    \2\ See Final Rule, Defining Unfair or Deceptive Practices, 85 
FR 78707, Dec. 7, 2020.
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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 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

[[Page 38422]]

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. Specifically, according to 
the 2019 SITA Baggage IT Insights Report,\4\ globally, delayed bags 
represented 77% of all mishandled bags in 2018, while damaged or 
pilfered bags account for 18%, and lost or stolen bags account for 5%. 
Assuming delayed bags are 77% of mishandlings in 2019 for domestic 
flights by U.S. reporting carriers, similar to 2018, we estimate that 
at least 2.3 million checked bags transported domestically were delayed 
in 2019.
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    \3\ Source: Air Travel Consumer Report, February 2020, page 36, 
https://www.transportation.gov/sites/dot.gov/files/2020-02/February%202020%20ATCR.pdf.
    \4\ https://www.sita.aero/resources/type/surveys-reports/baggage-it-insights-2019.
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    To better address the concerns regarding fees for delayed checked 
bags and implement the requirements of 49 U.S.C. 41704, note, the ANPRM 
specifically sought comment on (1) how to determine the appropriate 
length of the delay within the statutory parameters that would trigger 
the refund requirement for delayed checked bags; (2) how to determine 
when a bag has been delivered for the purpose of measuring the length 
of delay, and (3) how to determine the appropriate method for providing 
``automated'' refunds as provided in the statute. Approximately 60 
individuals, ten representatives of airlines and airline associations 
(Airlines for American, Allegiant Air, American Airlines, Delta Air 
Lines, International Air Transportation Association, Sun Country 
Airlines, National Air Carrier Association, Spirit Airlines, the 
Association of Asia Pacific Airlines, and Virgin Atlantic), one 
consumer group (Consumer Union), and one trade association for travel 
agencies (American Society for Travel Advisors) submitted comments. The 
Department has carefully reviewed and considered the comments received 
on the ANPRM and is proposing a rulemaking designed to ensure that 
airlines provide prompt refunds for ancillary fees paid by passengers 
for delayed checked baggage as provided in 49 U.S.C. 41704, note. The 
summary of the ANPRM comments, the Department's responses to the ANPRM 
comments, and the Department's proposal is set forth below.

B. Proposals

1. Length of Delay Triggering Refund Requirement
The ANPRM
    In the ANPRM, the Department sought comment on how to determine the 
appropriate length of delay that would trigger the refund requirement 
for checked baggage. The provision at 49 U.S.C. 41704, note prescribes 
the minimum lengths of delay that would trigger the refund requirement 
as not later than 12 hours for domestic flights and not later than 15 
hours for international flights. It also provides the Department the 
flexibility to modify these timeframes to up to 18 hours for domestic 
flights and up to 30 hours for international flights if the Department 
determines that the 12-hour or 15-hour standards are infeasible and 
would ``adversely affect consumers in certain cases.'' The Department 
asked why a particular length of time within this timeframe would be 
more appropriate than other times. The Department also asked if there 
is a reason to establish a secondary set of criteria, such as the 
flight duration or the frequency of service to determine the 
appropriate timeframe.
Comments Received
    According to comments submitted in response to the ANPRM, airlines 
generally support adopting the maximum lengths of delay allowed by the 
statute (18 hours for domestic flights and 30 hours for international 
flights). The airlines believe that any DOT requirement should provide 
carriers maximum flexibility to take into account the multiple 
variables that could impact their operations. Some airline commenters 
express concerns about the difficulties they encounter in delivering 
delayed bags for international long-haul flights they operate in low 
frequencies, which they state would take 24-48 hours. The National Air 
Carrier Association (NACA), Allegiant Air, and Spirit Airlines 
specifically expressed concerns about the difficulties Ultra Low-Cost 
Carriers (ULCC) face in transporting delayed bags due to their low 
frequency of scheduled flights and the lack of interline agreements 
with other carriers. The American Society of Travel Advisors (ASTA) and 
Consumers Union are in favor of adopting the minimum lengths of delay 
prescribed in the statute because they believe the default timeframes 
set by the statute are necessary to mitigate consumer harms resulting 
from delayed baggage and any extension of the default timeframes would 
``adversely affect consumers.'' Some individual commenters suggested 
that the Department should adopt a tiered standard based on not only 
domestic versus international flights, but also on the length or 
frequency of the flights.
DOT Response
    The Department proposes to require an airline to refund an 
ancillary fee paid by a passenger for a checked bag if the airline 
fails to deliver the bag to the passenger within 12 hours of arrival 
for domestic flights. The note in 49 U.S.C. 41704 provides that the 
Department shall issue a rule that requires carriers to promptly 
provide a refund for any ancillary fees paid by a passenger for checked 
baggage if a carrier fails to deliver the bag to passengers within 12 
hours of arrival for domestic flights. There is an exception if the 
Department determines that the 12-hour standard is not feasible and 
would adversely affect consumers in certain cases. The Department 
believes it is feasible for airlines to return a bag within 12 hours 
for domestic flights because airlines have tracking systems in place to 
identify the location of bags and airlines should be able to place 
delayed bags on the next available flight, often resulting in bags 
being delivered within 12 hours for domestic flights.
    With respect to international flights, the Department proposes to 
allow carriers up to 25 hours to deliver checked bags without having to 
issue a refund because the Department considers it not feasible, in 
many cases, for airlines to return a bag in less time and believes a 
timeframe that is shorter than 25 hours would adversely affect 
consumers. The statute provides the Department discretion to extend the 
timeframe for when carriers must refund fees paid by passengers for 
delayed checked baggage from 15 hours to up to 30 hours of the arrival 
of international flights if the Department makes a determination that 
15 hours is not feasible and would adversely affect consumers in 
certain cases. The Department considered and was

[[Page 38423]]

persuaded by the comments stating that many international long-haul 
flights are scheduled once a day which makes recovery and delivery of a 
delayed checked bag within the minimum length delay of 15 hours 
prescribed in the statute extremely challenging for carriers. Also, 
consumers may be negatively impacted by a 15-hour deadline because 
carriers may have less incentive to deliver the delayed bag on the next 
flight when flights are scheduled once a day. This is because even if 
the bag arrives on the carrier's next flight, the 15-hour deadline 
would have already passed. Setting the timeframe for returning bags to 
25 hours exceeds the minimum length of delay in the statute but 
increases the likelihood that carriers can meet the deadline even if 
their flights are scheduled 24 hours apart. The Department believes 
that the 12-hour deadline for domestic flights and 25-hour deadline for 
international flights provides carriers sufficient time to recover and 
return the bags to consumers. It also incentivizes carriers to return 
bags as soon as possible, limiting the inconvenience to consumers.
    The Department solicits comment on whether it has adequately 
considered the impact on consumers and airlines of the proposed 25-hour 
deadline for international flights. Commenters should identify any 
factors that they believe the Department may not have considered fully. 
The Department also seeks comment on whether the proposed 12-hour 
deadline for domestic flights is reasonable, particularly for ULCC that 
may have a lower frequency of scheduled flights and a lack of interline 
agreements with other carriers. The Department notes that, according to 
the aforementioned SITA baggage report, transfer mishandling is by far 
the leading cause of bag delays, which accounted for 46% of total bag 
delays in 2019. Most ULCCs operate point to point itineraries that do 
not involve transfer of bags from one flight to another and therefore 
do not incur the delays caused by transfer mishandling in nearly the 
numbers that network carriers are likely to experience. The Department 
requests comment on whether the proposed deadlines are feasible and 
whether they would negatively impact consumers. Commenters should 
articulate specific concerns and provide reasons for any alternative 
deadlines that they would endorse.
    The Department has tentatively determined not to propose a tiered 
standard based on flights' frequency, length, or other variables. To 
avoid having to provide a refund under such a standard, carriers would 
have to implement a costly system of sorting and prioritizing delivery 
of delayed bags based on the length or frequency of each individual 
flight. The cost and complexity of such a system would likely outweigh 
the benefits to carriers and consumers. Consumers may be negatively 
impacted because carriers may have less incentive to deliver the 
delayed bag as soon as possible. Conversely, a simplified standard 
based on domestic and international flights is expected to be easier 
for carriers to implement, for consumers to understand, and for the 
Department to enforce.
    Also, there is a proposed editorial change to the rule text in 14 
CFR 259.5(b)(3). The existing rule requires carriers to make every 
reasonable effort to return mishandled baggage within twenty-four 
hours. In light of the proposed delay thresholds that would trigger the 
baggage fee refund requirement for delayed bags, the Department is 
proposing to remove the reference to ``twenty-four hours'' and, 
instead, require carriers to return mishandled baggage ``within 12 
hours for domestic flights and within 25 hours for international 
flights.''
2. Domestic Segments of International Itineraries
The ANPRM
    The ANPRM requested comment on whether the international or the 
domestic deadline should apply to a delayed bag transported on domestic 
segments of international itineraries.
Comments Received
    In response, most airlines supported applying the international 
deadline for bags transported on domestic segments of international 
itineraries. They explain that the duration and frequencies of 
international itineraries should be taken into consideration when 
establishing such a deadline. ASTA states that consumers will benefit 
from one standard being applied by avoiding confusion and uncertainty 
regarding when a refund is due.
DOT Response
    This NPRM proposes to apply the 25-hour international deadline to 
delayed checked bags on international itineraries that include a 
domestic segment or segments. Based on information provided by the 
airline industry on mishandled baggage reporting, for bags traveling on 
itineraries that include both domestic and international segments, 
mishandlings occur more frequently on the international segment(s). The 
Department believes that applying the international deadline to such 
itineraries appropriately takes into account that many delayed bags 
traveling on an international itinerary were likely delayed on the 
international portion of the trip. Also, as pointed out by ASTA, 
applying one standard prevents confusion as to when a refund is due. 
The Department solicits comment on whether the 25-hour international 
standard is the appropriate standard to apply for domestic segments of 
international flights. Are there any instances in which the 12-hour 
domestic standard is more appropriate for an international itinerary 
that includes a domestic segment? For example, assuming an 
international itinerary on one ticket starts with a domestic segment 
from Seattle to New York followed by an international segment departing 
from New York many hours later, should the 12-hour deadline apply when 
the bag did not arrive in New York on time for the passenger to recheck 
the bag for the international portion of the journey?
    For domestic segments of international itineraries, the Department 
also solicits comment on whether any mandate for refunds for delayed 
checked baggage should exclude instances in which a bag was available 
in the appropriate location at the first point of entry into the United 
States, to be picked up by the passenger for rechecking for a 
subsequent domestic flight segment on that itinerary, but the passenger 
failed to pick up the bag. Most bags arriving to the United States from 
an international flight would require their owners to claim them at the 
first point of entry and recheck them with the connecting carriers 
after they pass through U.S. Customs and Border Protection. The 
Department requests comment regarding not requiring carriers to issue a 
refund for a lengthy delay in delivering the bag if carriers determine 
that a bag delay was caused by a passenger's failure to pick up and 
recheck the bag at the first point of entry into the United States.\5\
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    \5\ The Department permits reporting carriers not to report as a 
mishandled bag when undisputed evidence shows that delay was caused 
by a passenger's negligence at the first point of entry. See, Number 
30A Technical Directive: Mishandled Baggage (Amended), effective 
Jan. 1, 2019. https://www.bts.gov/topics/airlines-and-airports/number-30a-technical-directive-mishandled-baggage-amended-effective-jan.
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    Similarly, the Department requests comment regarding not requiring 
carriers to issue a refund in instances in which a passenger is 
traveling with two separate tickets and the passenger fails to collect 
the checked bag at the end of the first itinerary and check it with the

[[Page 38424]]

carrier on the second itinerary. Are there other circumstances in which 
not requiring carriers to issue a refund of bag fees if the bag did not 
arrive at the final destination by the applicable deadline would be 
appropriate? Instead of specifying particular circumstances in which 
airlines are not required to issue a refund for a lengthy delay in 
delivering the bag, would a general exception for checked baggage 
delays that were a result of a passenger's negligence be preferable? 
The Department seeks comment on whether such exceptions are reasonable 
and, if so, what level of proof, if any, carriers should be required to 
provide to show that a bag delay was caused by the passenger's 
negligent action or inaction.
3. Methodology for Measuring Length of Delay
The ANPRM
    While the Department did not specifically ask for comment on when 
the clock starts for purposes of measuring the length of the delay for 
delivering checked baggage, the Department did seek comment on how to 
determine when the clock stops running, i.e., bags have been delivered 
to the passenger.
Comments Received
    Comments received in response to the ANPRM indicate that many 
airlines prefer an interpretation that considers the bag to be 
delivered to the passenger (i.e., stops the clock) when the bag is 
physically present at the intended destination airport and the 
passenger has been notified that the bag is available for pick up. 
Several airlines oppose stopping the clock when the bag is transported 
to an offsite location and handed over to the passenger, citing 
difficulties arising when the offsite location is far away from the 
airport, when the passengers are in control of the delivery time and 
may choose to receive the bag at a later time (e.g., postponing the 
handover of the bag until the next morning when the bag could have been 
delivered during the night before), or when carriers have less control 
over delivery services provided by vendors in international operations. 
A few airlines supported stopping the clock when the bag is transported 
to an offsite location even if the passenger does not have physical 
possession of the bag and has not yet been notified. ASTA commented 
that the clock should stop when passengers have physical possession of 
delayed bags because the disruption caused by the delay continues until 
passengers are reunited with their bags. Consumers Union stated that 
the clock should stop when the bag is physically handed over to the 
passengers or when the bag has arrived at the place where the passenger 
has asked the bag to be delivered. Consumers Union specifically opposed 
making the destination airport the designated delivery place because it 
believes that requiring the passengers to make another trip to the 
airport would further inconvenience passengers.
    With regard to how to measure the start of the delay for delivering 
checked baggage, airline commenters stated that the Department should 
not use the published scheduled arrival time of the flight. Instead, 
airlines support an approach of starting the clock at the aircraft's 
``block-in time,'' meaning the time when a flight has parked at the 
arrival gate or another disembarkation location and blocks were placed 
in front of its wheels.
DOT Response
    To calculate the length of delay that a passenger experiences in 
receiving a checked bag, it is necessary to specify the start and end 
of the delay. The provision at 49 U.S.C. 41704, note states that the 
clock starts at the ``arrival'' of a flight. The statute does not, 
however, specify what constitutes the ``arrival'' of a flight. The 
Department generally agrees with airlines that using the actual arrival 
time of the last flight segment on which a passenger traveled as 
opposed to the scheduled arrival time of that flight is a reasonable 
approach. However, rather than using the aircraft's block-in time, the 
Department proposes that the start of the delay be based on the time 
that the passenger reached his or her destination and was given the 
opportunity to deplane from the last flight segment. Airlines already 
track this information for the purpose of ensuring compliance with the 
Department's tarmac delay rule in 14 CFR part 259.
    As to when the Department would consider bags to be delivered to 
the passenger, the Department is not persuaded by comments advocating 
for the clock to stop when a passenger is reunited with the delayed 
bag. This approach would not be workable as passengers have significant 
control over when they would reunite with the bags. For example, a 
passenger may be notified that a bag is ready for pick-up at the 
airport in the morning but choose to not pick up the bag until that 
evening or the next day; or a passenger may request hotel delivery but 
be away from the hotel during the day and only receive the bag in the 
evening. Carriers facing the hurdles of deferred baggage handover time 
are less likely to make the mandated deadlines and would be required to 
provide refunds despite the bags being available to passengers for 
pickup at an earlier time.
    Pursuant to the proposal in this NPRM, at the carriers' discretion, 
a delayed bag would be considered delivered (1) when the bag is 
transported to a location agreed to by the passenger and the carrier, 
regardless of whether the passenger is present to take possession of 
the bag; (2) when the bag has arrived at the destination airport, is 
available for pickup, and the carrier has provided notice to the 
passenger of the location and availability of the bag for pick-up; or 
(3) if the carrier offers delivery service and the passenger accepts 
such service, when the bag has arrived at the destination airport, and 
the carrier has provided notice to the passenger that the bag has 
arrived and will be delivered to the passenger. Given the three 
options, carriers would be able to coordinate with each passenger 
regarding whether the passenger prefers to retrieve the bag at the 
airport or, if the carrier offers the service, to have the bag 
delivered to the passenger at a desired location. This approach 
provides airlines the ability, with less financial risk, to work with 
the passengers to transfer the bags to the most convenient location in 
the most efficient manner to the passenger. At the same time, these 
options would eliminate handover time being postponed by the passenger 
while the clock is running. If a carrier opts to stop the clock at the 
time the carrier provides notice that the delayed bag is available at 
the destination airport for pick-up by the passenger or delivery if the 
carrier offers this service and passenger chooses it, the carrier would 
have the burden of proving that it provided notice to the passenger 
prior to the applicable deadline. This approach would also benefit 
passengers by increasing the likelihood carriers would provide 
passengers the option of having the delayed bag delivered to them.
    A carrier that already has a system in place to notify passengers 
of the status of their baggage may choose to have the clock stop when a 
delayed bag arrives at the airport and the notification has been 
provided to the passenger. Alternatively, a carrier that does not have 
a notification system in place and is reluctant to invest in such a 
system may choose to have the clock stop at the time the bag was 
transported to an agreed-upon location. Allowing carriers to choose 
among these options minimizes carriers' cost, which otherwise may be 
passed on to the passengers through the increase of ticket prices or 
baggage fees. The Department

[[Page 38425]]

seeks comment on whether this analysis accurately captures carriers' 
incentives to work with passengers and provide baggage delivery or if 
there are other factors that were not considered that could cause 
carriers to engage in different behaviors in response to the proposed 
options. In addition, the Department seeks comment on whether allowing 
carriers to choose among these three options is reasonable and 
effective to achieve the goal of providing carriers and passengers the 
maximum level of flexibility, promoting efficiency in delayed baggage 
recovery, and ensuring passengers are treated fairly when their bags 
are delayed in air transportation.
    In addition to comments requested on the previously discussed 
elements of the proposal, the Department seeks comment on the following 
issues:
a. Form and Evidence of Notification to Passengers
    For carriers that choose to have the clock stopped when a delayed 
bag has arrived at the intended airport and the carrier has notified 
the passenger that the bag may be picked up or, if the carrier offers 
and passenger accepts, that the bag may be delivered, what should 
constitute a sufficient form of notification to ensure that passengers 
receive adequate and timely information about the whereabouts of their 
bags before carriers are relieved from the obligation of refunding 
baggage fee? Currently, most airlines provide ticket confirmations and 
other air travel information to passengers via email. Many carriers 
also use mobile applications to provide various notifications and 
alerts to passengers, including reminders of check-in time, boarding 
time, gate information, and changes to flight status and baggage 
status. Some of these carriers allow passengers to opt-in to receiving 
notifications through email or text messages. Would push notices 
through mobile applications, email, and text message be sufficient 
constructive notice for the purpose of stopping the delayed baggage 
clock? Would contact via a voice call or message be sufficient? If a 
voice call or message is a permissible form of notification, what 
evidence should a carrier be required to provide when there is a 
dispute between a carrier and a passenger about whether such a 
notification was provided? The proposed rule text does not specify what 
type(s) of notification method are considered adequate. In that regard, 
should the Department adopt a notification standard that is performance 
based instead of specifying a particular notification method to be 
necessary for the purpose of stopping the delayed baggage clock? If any 
of these methods are acceptable, should the Department's focus be on 
the timeliness of the notification rather than the methods of 
notification?
    In addition, carriers may not have contact information for some 
passengers, particularly passengers who purchased their tickets through 
ticket agents. The Department seeks comment on how carriers may notify 
passengers when they do not have valid contact information for a 
passenger. Could this problem be resolved by carriers obtaining contact 
information for all passengers when they file a mishandled baggage 
report for a delayed bag?
b. Timing of Notification to Passengers
    For carriers choosing option 2, which would have the clock stopped 
when the delayed bag has arrived at the intended airport and 
notification that the bag is available for pick-up was provided to the 
passenger, the Department proposes to add a third element to stop the 
clock, i.e., the bag is actually available for pickup. For example, 
assuming that a carrier's baggage office at the intended airport closes 
at 10 p.m. and opens at 6 a.m.; when a delayed bag arrives at the 
intended airport at 1 a.m., and a notification was sent to the 
passenger at the same time through an automated push alert on the 
mobile application, the clock would stop at 6 a.m. the next morning 
when the bag becomes available for pickup, instead of at 1 a.m. The 
Department is also proposing that the clock would still stop at 1 a.m. 
in circumstances when the passenger is contacted and expresses a 
preference that the bag be delivered and the carrier agrees to do so 
(option 3) as that is the time that the bag arrived at the destination 
airport. The Department seeks comment on this additional element for 
option 2 for determining when a bag has been delivered.
4. Multiple Carrier/Ticket Agent Involvement and Responsibility
The ANPRM
    In the ANPRM, the Department sought comment regarding who should be 
responsible for issuing refunds when there are multiple parties 
involved in the collection of baggage fees and/or the transportation of 
the bags. These situations arise, for example, when there is a 
codeshare or interline itinerary in which the carrier collecting the 
bag fee (usually the first carrier) and the carrier responsible for bag 
delivery and receiving the delayed bag report (usually the last 
carrier) are different carriers, or when an itinerary is marketed by a 
third party such as a ticket agent, and the third party collected not 
only the airfare but also the baggage fees.
Comments Received
    Airlines point out the difficulty they face in situations when the 
entity collecting the fee does not have information that the bag was 
delayed beyond the applicable timeframe and that a refund is due, while 
the carrier with the information about the delay may not have the 
payment information necessary for issuing the refund. With regard to 
ticket agents collecting baggage fees, most commenters, including 
airlines, consumer representatives, and ticket agent representatives, 
agree that when a ticket agent was authorized by a carrier to collect 
the baggage fee on the carrier's behalf, the carrier should be 
responsible for issuing the refund. ASTA further suggests that these 
agents may facilitate the refund by using the Electronic Miscellaneous 
Document (EMD) process, an IATA process that facilitates transactions 
involving non-flight ancillary services.
    With respect to multiple-carrier itineraries, some commenters have 
suggested an approach that requires the carrier ``at fault'' for the 
delay of the bag to issue the refund; some commenters want the carrier 
that collected the fee to make the refund regardless of ``fault;'' and 
others prefer that the refund amount be shared among the carriers on a 
prorated basis. Consumers Union commented that consumers should not be 
burdened with tracking down which airlines caused the delay.
DOT Response
    The Department agrees with the commenters that when a ticket 
agent's role is to act as the agent of a carrier, collecting the 
baggage fee on the carrier's behalf and passing on the fee to the 
carrier, the carrier should be responsible for issuing the refund when 
it is due. It should be noted that the functionality of EMD is 
controlled by individual airlines and that not all airlines use the EMD 
process. While the Department does not endorse EMD or any other 
products available to settle baggage fee transactions among carriers 
and ticket agents, the EMD process is an example of a system that could 
facilitate the smooth handling of baggage fee transactions and refunds. 
The Department expects carriers to work with ticket agents collecting 
baggage fees on the carriers' behalf to ensure that refunds are issued 
in a timely manner. In instances in which a ticket agent collected the 
baggage fee, the Department will hold the carriers responsible if 
passengers entitled to

[[Page 38426]]

refunds are not provided prompt refunds, because 49 U.S.C. 41704, note 
applies to airlines.
    The Department has tentatively decided to not apply the new 
proposed baggage refund requirements in 14 CFR part 260 to ticket 
agents. The proposed part 260 makes cross references to certain minimum 
standards of the airline customer service plan required by 14 CFR 
259.5, which currently applies to carriers but not to ticket agents. 
The Department is required by 49 U.S.C. 42301, note prec., to issue a 
rule requiring ticket agents with an annual revenue of at least $100 
million to adopt minimum customer service standards, and intends to 
address this requirement through a separate rulemaking.\6\ The 
Department seeks information on ticket agents' involvement in 
collecting baggage fees from passengers, either as a carrier's agent or 
as a principal. The Department also notes that, pursuant to 14 CFR 
399.80(l), a ticket agent's failure or refusal to make proper refunds 
promptly when service cannot be performed as contracted, or a ticket 
agent's representation that such refunds are obtainable only at some 
other point, constitutes an unfair or deceptive practice.
---------------------------------------------------------------------------

    \6\ See https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202010&RIN=2105-AE57.
---------------------------------------------------------------------------

    Regarding multiple-carrier itineraries, the Department agrees with 
Consumer Union that expecting consumers to track down which airline 
caused the delay would be an unreasonable burden to place on consumers. 
It would also be costly for carriers to determine which carrier is at 
fault for causing each bag delay. Accordingly, this NPRM proposes that 
the carrier that collected the baggage fee must issue the refund. With 
respect to multiple-carrier itineraries for which a ticket agent 
collected the bag fee, the Department is proposing that the carrier 
that operated the last flight segment must issue the refund if there 
are multiple airlines involved. The Department notes that the operating 
carrier of the last flight segment may be a fee-for-service carrier 
that normally does not handle baggage fee refunds since these types of 
entities generally do not sell tickets or ancillary services. As such, 
the Department solicits comment on whether, rather than requiring the 
carrier that operated the last flight segment to provide the refund, it 
should require the carrier that marketed the last flight segment to 
issue the refund when a ticket agent collects the bag fee. Carriers 
would be free to prorate the cost of refunds among themselves through 
contractual agreements, if so desired, but consumers should be afforded 
a simplified process in pursuing a refund from one carrier that already 
has the payment information for issuing refunds. The Department seeks 
comment on whether this proposal regarding refund obligations 
adequately addresses the issues raised when multiple parties are 
involved in the sale and provision of air transportation or whether 
there are additional issues that need to be addressed.
5. Refund Mechanism and Passengers Notifying Carriers About Delayed 
Bags To Receive Baggage Fee Refunds
The ANPRM
    In the ANPRM, the Department sought comment regarding the 
appropriate method for providing a refund for delayed baggage. It noted 
that when refunds are due on purchases with a credit card, the 
Department already requires a carrier to transmit a credit statement to 
the credit card issuer within seven business days of receipt of full 
documentation for the refund requested. In addition, the Department 
requires that, with respect to purchases with forms of payment other 
than credit cards, an airline must provide a refund within 20 days of 
receipt of full documentation of such a request. Because 49 U.S.C. 
41704, note states that carriers should ``promptly provide an automated 
refund'' to an eligible passenger when the carriers fail to meet the 
applicable time limit in delivering the checked bag and the passenger 
has notified the carrier of the lost or delayed checked baggage, the 
Department asked whether prescribing a specific mechanism for the 
carriers to use to provide the statutorily required automated refund 
would negatively or positively impact carriers and consumers.
Comments Received
    To determine how to ``promptly provide an automated refund'' for 
delayed bags, most commenters state that the Department should apply 
its existing requirement on providing prompt ticket refunds. 
Specifically, when a refund is due, 14 CFR part 374, which implements 
Regulation Z of the Board of Governors of the Federal Reserve Board (12 
CFR part 226), requires a carrier to issue a refund of ticket purchase 
price paid by a credit card within seven days after receiving a 
complete refund request. The regulation in 14 CFR 259.5(b)(5) further 
requires a carrier to issue a refund of ticket purchase price paid by 
cash or a check within 20 days after receiving a complete refund 
request. However, airline commenters expressed concern that this type 
of ``automated'' refund may not be feasible for interline itineraries 
because refunds can only be made after a consumer informs the airline 
that charged the baggage fee that the bag is delayed. Some airlines are 
also concerned about the difficulty in issuing ``automated'' refunds 
when passengers purchase tickets from travel agents or as a part of a 
tour package.
DOT Response
    The Department tentatively interprets the requirement in 49 U.S.C. 
41704, note to mean that a prompt and ``automated'' baggage fee refund 
is due when the baggage delivery delay has exceeded the applicable 
delivery deadline and the passenger has notified the air carrier or 
foreign air carrier of the lost or delayed checked baggage. The clock 
for determining whether the refund is ``prompt'' starts at the 
expiration of the delivery deadline or when the passenger provides 
notification of the lost or delayed baggage, whichever is later. DOT 
proposes to require airlines to provide refunds for delayed bags within 
seven business days of a refund being due for credit cards and within 
20 days of a refund being due for payments using cash, check, vouchers, 
frequent flyer miles, or other form of payment. For the refund process 
to start, passengers would need to notify the airline that collected 
the bag fee about the delay in receiving the bag. If a ticket agent 
collected the bag fee, passengers would need to notify the carrier that 
operated the flight about the delay in receiving the bag. With respect 
to multiple-carrier itineraries for which a ticket agent collected the 
bag fee, passengers would need to notify the carrier that operated the 
last flight segment about the delay in receiving the bag. The 
Department acknowledges that this notification requirement on 
passengers would encompass two different scenarios, each of which would 
impose a different level of burden on passengers. First, in situations 
in which the carrier accepting and handling a mishandled baggage report 
(MBR) from the passenger is the same carrier that collected the baggage 
fee, the filing of an MBR would constitute notification from the 
passenger to the carrier that the baggage was delayed for the purpose 
of receiving a checked baggage fee refund. It is the Department's 
understanding that the vast majority of itineraries marketed to 
consumers in the United States are either itineraries involving only 
one carrier or itineraries involving fee-for-service codeshare 
operations (itineraries involving a marketing carrier and its

[[Page 38427]]

regional codeshare partners in which the marketing carriers collect the 
baggage fees and also accept MBRs). The Department believes that this 
notification requirement would not be burdensome to passengers in most 
delayed bag incidents, as passengers normally file MBRs with carriers 
about delayed bags shortly after they find out that their checked bags 
did not arrive on time. In addition, the burden of notifying carriers 
about a delayed bag is further reduced by baggage tracking systems 
implemented by a growing number of carriers that alert passengers when 
their bags will arrive late and offer passengers the option to file an 
MBR via mobile device or app without needing to visit the baggage claim 
areas or the baggage service offices. When using these technologies, 
passengers are often advised to click on a link provided in the late 
bag alert to either wait for the bag or set up free delivery. Such 
technology developments allow passengers to conveniently notify 
carriers about mishandled baggage for the purpose of receiving 
compensation for direct and consequential damages from mishandled 
baggage under the existing rule, as well as receiving a refund of 
baggage fees under the proposed rule.
    In contrast to the first scenario discussed above, the second 
scenario involves situations in which the carrier that received an MBR 
about a delayed bag and the carrier or ticket agent that charged the 
baggage fee are two different entities. Examples of this scenario 
include interline itineraries and itineraries that involves codeshare 
flights operated by more than one marketing carrier. The proposed rule 
would require the passenger to notify the carrier that processed the 
baggage fee charge about a delayed bag to receive a refund for the 
baggage fee. In situations in which a ticket agent collected the bag 
fee, passengers would need to notify the carrier that operated the 
flight about a delayed bag. With respect to multiple-carrier 
itineraries for which a ticket agent collected the bag fee, passengers 
would need to notify the carrier that operated the last flight segment 
about the delay in receiving the bag. Similar to filing an MBR the 
Department expects that most passengers in this situation would contact 
the carrier that operated the flight (or the carrier that operated the 
last flight segment in a multiple carrier itinerary) immediately 
following their arrival at the destination and finding out about the 
delayed bag. In any event, the carrier that has collected the baggage 
fee (or if a ticket agent collected the bag fee, the carrier that last 
operated the flight), would have seven days (for credit card 
transactions) or 20 days (for transactions other than credit cards) to 
issue a refund from the time a baggage delay exceeded the applicable 
deadline, or from the time it receives a notification from the 
passenger, whichever is later. The Department solicits comments on 
whether, instead of requiring passengers to notify the carrier that 
operated the last flight segment about the bag delays, we should 
require passengers to notify the carrier that marketed the last flight 
segment. We ask that commenters supporting that passenger notify and 
obtain refund from the last operating carrier address the issue of 
obtaining a refund from the last operating carrier when the carrier is 
a fee-for-service carrier that does not sell tickets.
    To illustrate this proposal with an example: A passenger traveled 
from Chicago to Los Angeles on a flight that arrived at Los Angeles on 
June 19 at 6 p.m., and according to the carrier's record, the passenger 
was given the opportunity to deplane at 6:15 p.m. At 6:45 p.m., the 
passenger did not receive the checked bag and filed a mishandled 
baggage report with carrier X (which is also the carrier that collected 
the baggage fee). Carrier X chooses to apply the standard that stops 
the delayed bag clock at the time the bag arrives at the Los Angeles 
Airport and the carrier has notified the passenger that the bag is 
available for pick up. Accordingly, the clock for calculating bag delay 
started at 6:15 p.m., and Carrier X has 12 hours, or until 6:15 a.m. on 
June 20 to stop the clock and avoid refunding the bag fee. The bag did 
not arrive in Los Angeles until 10:00 a.m. on June 20. Therefore, 
Carrier X would be required to refund the bag fee and has seven days 
from June 20 to issue the refund for the baggage fee that was paid by a 
credit card. In a different scenario, if Carrier X accepted the MBR and 
Carrier Y is the carrier that collected the baggage fee, assuming the 
passenger did not notify Carrier Y about the bag delay until June 25, 
Carrier Y will have seven days from June 25 to issue the refund.
    The Department believes that applying the same seven or 20-day 
requirements to baggage fee refunds, as required by other DOT refund 
regulations, is consistent with the statutory language that requires 
the refunds to be ``prompt.'' It also avoids confusion among passengers 
arising from trying to understand and apply different standards for 
ticket refunds and baggage fee refunds, and saves cost for 
infrastructure and training that carriers would have to invest in to 
establish a different refund timeliness standard.
    Also, similar to ticket refunds, the Department expects that 
baggage fee refunds would be issued in the same form of payment as the 
original baggage fee payment. Under this proposal, in addition to 
credit card, cash, and check payments being refunded in their 
respective original forms of payment, baggage fees paid by airline 
credit/voucher or frequent flyer miles would be refunded in their 
original forms of payment as well. When a delay occurred to a bag for 
which a baggage fee was waived due to the passenger's airline loyalty 
program status or as a benefit of using an airline-associated credit 
card, carriers would not be required to provide a refund as the 
passenger did not pay anything.
    In circumstances in which a bag was delayed but a refund of the 
baggage fee is not required (either because the delay did not exceed 
the deadlines or the baggage fee was waived,) carriers are still 
responsible for compensating passengers for any direct or consequential 
damages resulting from the baggage delay, consistent with 14 CFR part 
253 for domestic air transportation, and with applicable international 
treaties for international air transportation.
    The Department is aware that at least one major U.S. carrier is 
offering a ``baggage fee subscription'' program, under which passengers 
may opt to prepay a fixed fee that allows the subscribers to travel 
with certain numbers of checked bags without paying individual baggage 
fees during the subscribed period. Although the subscribers are not 
paying baggage fees on a per bag basis, they are still paying a fee for 
the transportation of their bags. DOT's proposal would require airlines 
to provide refunds to passengers who subscribed for the program if a 
checked bag experienced a refund-qualifying delay. The Department seeks 
comments on whether this is a reasonable determination, and if so, how 
to determine the amount of refund to which these passengers should be 
entitled, considering the passenger's subscription type and usage of 
the program, but not overly complicating the calculation of the refund 
and the administration of the program. The Department also seeks 
comment on whether there are other new and innovative baggage fee 
assessment schemes already implemented by carriers or on the horizon 
that should be considered in the context of promulgating a rule 
regarding refunding baggage fees for delayed bags.

[[Page 38428]]

    In summary, the Department's proposed procedure requires that the 
airline collecting the baggage fee issue a refund, in the same form of 
payment, within seven or 20 days (depending on the form of payment) 
after the delay in the delivery of the bag has exceeded the applicable 
deadline and after the passenger has notified that airline of the 
delay. The Department seeks comment on whether this proposed procedure 
is a reasonable and workable way for carriers to meet the statutory 
requirement to promptly provide an automated refund to an eligible 
passenger when a carrier fails to meet the applicable time limit in 
delivering the checked bag and the passenger has notified the carrier 
of the lost or delayed checked baggage. The Department also seeks 
comment on whether requiring passengers to notify the entity that 
collected the bag fee about the bag delay when they already filed 
mishandled baggage report with another entity is overly burdensome to 
them. In particular, if commenters take the view that requiring 
passengers to provide notifications to the entities that collected 
baggage fees from them is overly burdensome, the Department seeks 
suggestions for alternative procedures.
6. Other Issues
    In addition to providing comments to questions specifically raised 
in the ANPRM, commenters also raised other issues for consideration.
a. Oversized/Overweight Bag Fees
    Carriers normally set a maximum allowance for the size and the 
weight of a standard checked bag, and charge a higher fee for an 
oversized and/or overweighed bag. Some commenters contend that fees for 
oversized and overweight bags should be exempt from the refund 
requirement because these bags are still delivered even if they were 
late. However, the statutory language in 49 U.S.C. 41704, note requires 
a refund for delayed ``checked baggage,'' making no distinction or 
exception for special items that are transported as checked bags. The 
Department interprets the statute to cover oversized/overweight bags, 
and accordingly proposes to treat them the same as standard sized bags.
b. Escalated Fee Scale for Multiple Checked Bags
    Many carriers have adopted an escalated fee scale for additional 
bags checked by one passenger, under which if more than one bag is 
checked, an escalated bag fee is charged for each additional bag. 
Problems may arise when carriers try to determine the amount of refund 
if only one or some of the multiple checked bags are delayed. Airlines 
for America (A4A) suggests that when carriers can identify which bag is 
delayed, only the fee paid for that bag should be refunded. The 
Department agrees generally with this approach but if a dispute were to 
arise between a consumer and an airline, the airline would have the 
burden of providing documentary evidence to identify the specific fee 
charged for a specific bag. For example, when a passenger checks 
multiple bags, if a carrier's baggage handling system assigns a unique 
identification to each checked bag and correlates the specific baggage 
fee charged to the specific bag, the carrier would be permitted to 
provide a refund in that amount if that bag was delayed. On the other 
hand, if the carrier's system was able to assign an identification to 
each bag but baggage fees were charged in a lump sum, then the 
Department proposes that the refund for one delayed bag would be in the 
amount equal to the highest baggage fee per bag charged in that 
transaction.
c. ``Voluntary Separation'' and Liability Waiver
    A4A asserts in its comment that when a passenger voluntarily agrees 
to be separated from his or her checked bags, the refund requirement 
should not apply. One scenario presented by A4A involves a passenger 
who does not meet the minimum check-in time requirement but the carrier 
allows the passenger to check-in for the flight anyway with the caveat 
that there may not enough time to transport the checked bag to the same 
flight. Another scenario involves a standby passenger who is offered to 
board a flight at a time very close to departure with the caveat that 
there may not be enough time to load his or her checked bag on that 
flight. If the passenger is informed, voluntarily agrees to travel 
without the checked bag on the same flight, and signs a waiver of 
liability associated with the delayed bag, A4A believes that the 
baggage fee refund requirement should not apply if the bag does not 
arrive by the deadline that triggers the refund requirement. The 
Department tentatively agrees with this approach and proposes such an 
exception. DOT reminds the industry that such an exception would only 
waive the passenger's entitlement to a baggage fee refund due to 
delayed bag delivery, and it would not waive any compensation due to 
the passenger if the checked bag is lost or damaged.
    The Department seeks comment on the issues described above. The 
Department also notes that carriers are liable for incidental expenses 
associated with a delayed bag. Some airlines have suggested that when a 
late-boarding passenger is informed that his or her bag may not be 
transported on the same flight but chooses to take the flight anyway, 
the passenger is waiving the right to claim compensation for incidental 
expenses associated with a delayed bag. The Department solicits comment 
on whether, in such delayed bag scenarios, airlines should be permitted 
to require passengers to waive any rights to compensation for 
incidental expenses and if so, whether the Department should require 
that airlines retain such records for a specified time period.
d. Alternative Transportation
    Commenters also brought up issues associated with baggage fee 
refunds when a passenger does not take a scheduled flight for various 
reasons. A4A suggests that when a passenger voluntarily chooses to take 
alternative ground transportation due to a lengthy flight delay or 
cancellation, the carrier should not be responsible for refunding bag 
fees. On the other hand, A4A states that when a carrier arranges for 
the passenger to travel on an alternative ground transportation, the 
baggage fee refund requirement should apply and the clock should start 
at the flight's actual arrival time. In addition, A4A argues that when 
a carrier arranges for a passenger to travel on a flight by another 
carrier, the baggage fee refund requirement should not apply because 
otherwise it would discourage carriers from offering travel on other 
carriers' flights.
    The Department tentatively agrees with the position that when 
passengers voluntarily choose to not travel on the scheduled flight or 
a substitute flight offered by the carrier, either by taking ground 
transportation that the passenger arranges on their own, or by 
purchasing tickets on flights of another carrier, the baggage fee 
refund requirement should not apply. The goal of the baggage fee refund 
requirement is to compensate passengers for bag delays caused by 
carriers. In the situations described above, a passenger's own decision 
to not travel on the scheduled or substitute flight arranged by the 
carrier is an intervening action that may contribute to a delay in 
being reunited with his or her bag. Conversely, when it is a carrier 
making the decision to arrange for alternative travel for passengers, 
either on ground transportation, on a later flight operated by that 
carrier, or on a flight by another carrier, the baggage fee refund 
requirement should apply. In those situations, under this proposal,

[[Page 38429]]

the delayed bag calculation clock would start when the passenger's 
actual transportation arrived, whether a flight or other mode of 
transportation. The Department seeks comment on whether this position 
on alternate travel arrangements creates unreasonable burdens for 
consumers and airlines.
e. Type of baggage
    Commenters also sought clarity on the meaning of checked baggage. 
A4A specifically states that fees collected for gate-checked bags 
should not be subject to the refund requirement as gate baggage 
handling charges are independent of bag fees and carriers assess gate 
handling fees to encourage passengers to check their bags at the ticket 
counter. With respect to what type of baggage is subject to the refund 
requirement, 49 U.S.C. 41704, note states that the refund requirement 
applies to ``checked baggage.'' The Department interprets this to 
include not only bags checked with carriers at the ticket counters, but 
also gate-checked bags and valet bags if the passenger paid a fee to 
transport the bags. Generally, airlines do not charge for valet bags 
and valet bags are delivered on time. Both a ``gate-checked bag'' and a 
``valet bag'' would be checked in with carrier personnel at the 
departure gates for transportation in the aircraft cargo compartments, 
but a gate-checked bag would be claimed by the passenger at the final 
destination at the baggage claim area, while a valet bag would be 
returned to the passenger at the end of the flight segment when the 
passenger disembarks the aircraft. A4A in its comment argues that gate-
checked bag fees should be treated differently because carriers often 
charge a gate-checked bag fee that is higher than the regular checked 
baggage fees to encourage passengers to check their bags at the ticket 
counter. Regardless of the reason for the fee, 49 U.S.C. 41704, note 
mandates that airlines must refund baggage fees if a bag is not 
delivered in a timely manner.

III. Refunding Fees for Ancillary Services That Were Not Provided

A. Background

    The provision at 49 U.S.C. 42301, note prec. 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, including on 
the passenger's scheduled flight, on a subsequent replacement itinerary 
if there has been a rescheduling, or for a flight not taken by the 
passenger. The Department's regulation in 14 CFR 259.5(b)(5) requires 
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. Although the existing rule only requires refunds 
of ancillary fees when a passenger does not take the original flight 
due to oversales or cancellation, the Department's Office of Aviation 
Consumer Protection would review any airline practice of refusing to 
refund fees for ancillary services that the passenger was unable to use 
due to an action of the airline to determine if the airline was 
engaging in an unfair or deceptive practice in violation of 49 U.S.C. 
41712. It is the Department's understanding that airlines in general 
have been providing refunds to passengers, not only when passengers are 
unable to use the ancillary service due to an oversale situation or 
flight cancellation, but also when passengers pay for ancillary 
services and do not receive those services from the carrier for other 
reasons.\7\
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    \7\ The Department notes that some carriers have published 
refund policies that state consumers will received a refund for fees 
paid for ancillary services that they did not receive. In addition, 
the Department's Office of Aviation Consumer Protection has reviewed 
its consumer complaint database and found that when carriers receive 
consumer complaints filed with the Department alleging that they 
paid for ancillary services and did not receive the services, 
carriers usually have been issuing refunds after verifying that the 
ancillary services were indeed not provided.
---------------------------------------------------------------------------

B. Proposals

    This NPRM proposes to codify in the rule text a requirement that 
airlines must refund fees a passenger pays for an ancillary service 
that the passenger does not receive, including due to oversales and 
flights cancellations, which are already in the existing rule text, and 
other situations when the ancillary service is not available to the 
passenger. The Department seeks comments on the following issues:
1. Scope of Ancillary Services
    The provision at 49 U.S.C. 42301, note prec. requires that airlines 
refund ancillary fees paid for services ``related to air travel.'' The 
Department has not defined ``ancillary services'' in its aviation 
economic regulations. However, the Department has defined ``optional 
services'' in 14 CFR 399.85(d), which requires U.S. and foreign air 
carriers to prominently disclose on their websites marketing air 
transportation to U.S. consumers information on fees for all optional 
services available to a passenger purchasing air transportation. 
Section 399.85(d) specifically provides that for purposes of that 
section, the term ``optional services'' is defined as any service the 
airline provides, for a fee, beyond passenger air transportation, 
including, but not limited to, charges for checked or carry-on baggage, 
advance seat selection, in-flight beverages, snacks and meals, pillows 
and blankets and seat upgrades. This definition does not include fees 
charged for services to be provided by entities other than airlines, 
such as hotel accommodations or rental cars, which are commonly offered 
by some airlines as a package during the airfare reservation process. 
In this NPRM, the Department proposes to apply a definition for 
``ancillary services'' in Sec.  260.2 that is substantively identical 
to the definition of ``optional services'' provided in Sec.  399.85. 
This proposal defines ancillary service to mean any service related to 
air travel provided by a covered carrier, for a fee, beyond passenger 
air transportation. It specifies that such service includes, but is not 
limited to, checked or carry-on baggage, advance seat selection, access 
to in-flight entertainment system, in-flight beverages, snacks and 
meals, pillows and blankets and seat upgrades. The Department seeks 
public comment on whether the proposed definition, which is similar to 
the definition for ``optional service'' in Sec.  399.85, is appropriate 
to define ancillary services in the context of refunding ancillary 
service fees that are directly related to air travel.
2. Refund Eligibility
    The provision at section 42301, note prec. requires covered 
carriers to refund ancillary services fees for services that ``a 
passenger does not receive, including on the passenger's scheduled 
flight, on a subsequent replacement itinerary if there has been a 
rescheduling, or for a flight not taken by the passenger.'' The 
Department's existing rule, in 14 CFR 259.5(b)(5), already requires 
airlines to refund ancillary fees for services to be provided on a 
flight that a passenger was unable to use due to flight cancellation or 
oversales. In addition, the Department's Office of Aviation Consumer 
Protection has authority to investigate unfair or deceptive practices 
in the provision of air transportation pursuant to 49 U.S.C. 41712, and 
considers an airline's refusal to provide a refund to passengers for 
ancillary services that they purchased but did not receive to fall 
under that authority. As a result of this long-standing interpretation, 
the Department believes that members of the airline industry understand 
that failure to provide a refund of fees for ancillary services that an 
airline did not provide to a passenger could be viewed as an unfair or

[[Page 38430]]

deceptive practice in violation of section 41712. Some airlines have 
adopted and published specific policies that provide refunds of fees 
for ancillary services that the passengers do not receive. Further, a 
review of some consumer complaint files regarding ancillary services 
that were not received show that airlines generally refund those fees.
    In this NPRM, the Department proposes to codify in the rule text 
the requirement of 49 U.S.C. 42301, note prec. on ancillary fee 
refunds, as well as the Department's long-standing policy, which is 
consistent with that statutory provision. As such, the proposal would 
require covered carriers to promptly refund an ancillary service fee 
they charged a passenger, if the passenger did not receive the 
ancillary service he or she paid for because (1) the service was not 
made available to that passenger on the flight he or she took (either 
the original flights or an alternative flight due to schedule changes 
made by the airlines or due to an oversales situation); or (2) if the 
passenger did not take any flight due to the airline not operating the 
flight or making a significant change to the flight.
    Under this proposal, a passenger would generally be entitled to a 
refund of the ancillary service fee if the passenger did not receive 
the ancillary service. The proposal is focused on whether a carrier 
failed to fulfill its obligation to provide the service, as opposed to 
whether the service was actually utilized by the passenger. If the 
service was available but a passenger did not use the service, the 
passenger would not be entitled to a refund. For example, when a 
passenger pays for wi-fi service on a flight, if the service is 
available to all passengers who purchased the wi-fi service, but a 
particular passenger is unable to use the service due to issues with a 
personal device, or the passenger simply decides to not use the 
service, there would be no requirement to refund the fee paid by that 
passenger. Also under this proposal, a flight schedule change 
affirmatively made by the passenger or due to passenger action would 
not result in eligibility for the ancillary fee refund. For instance, 
if a passenger is re-accommodated on an alternate flight due to late 
check-in and the ancillary service the passenger paid for such as wi-fi 
service is not available on the alternate flight, our proposal would 
not require the carrier to refund the ancillary service fee. The 
Department solicits comments on the reasonableness of this airline 
obligation-focused approach.
3. Prompt Refund
    The Department is proposing to apply the same ``promptness'' 
standards to refunding ancillary services fees when refunds are due 
that is currently applicable to refunds for tickets, optional services 
that could not be used due to an oversale or flight cancellation, and 
lost bags. A prompt refund must be provided within seven days for 
credit card transactions and 20 days for transactions involving cash, 
checks, vouchers, or frequent flyer miles after the entity responsible 
for issuing a refund receives a request for a refund and the 
documentation necessary for processing the refund.
4. Entity Responsible for Refund
    The Department recognizes that the entity that processed the 
ancillary fee charge may not necessarily be the entity that is 
responsible for providing the ancillary service. For example, in a 
codeshare or interline itinerary, the carrier that charges a fee for an 
ancillary service to be provided on a flight may not be the carrier 
that operates the flight. In these situations, the passenger who did 
not receive the ancillary service on the flight would need to contact 
the carrier that collected the fee to request a refund. Similar to the 
multi-carrier scenario for delayed baggage, the Department is proposing 
to hold the carrier that collects the fee for ancillary service 
(usually the marketing carrier of an itinerary) responsible for issuing 
a refund when the carrier or another carrier (usually under a codeshare 
or interline agreement with the marketing carrier) fails to provide the 
ancillary service.
    For passengers who purchase airline tickets from ticket agents, the 
Department understands that on occasion ancillary services may be 
available for purchase at the time of ticket reservation from a ticket 
agent. For example, the Department is aware that some ticket agents' 
websites offer the option for consumers to select seats for a fee 
during the booking process. It is the Department's understanding that 
this fee charged by a ticket agent is passed on to the carrier whose 
ticket stock is used for issuing the ticket. DOT proposes that, if a 
passenger purchases an ancillary service from a ticket agent, the 
Department would hold the carrier responsible for issuing the refund 
because the ticket agent is collecting the ancillary service fee on the 
carrier's behalf and passing on the fee to the carrier. The carrier 
presumably has a contractual relationship with the ticket agent, and 49 
U.S.C. 42301, note prec. requires airlines to refund ancillary fees 
paid for services ``related to air travel.'' With respect to multiple-
carrier itineraries for which a ticket agent collects an ancillary 
service fee, the Department is proposing that the last carrier that 
operates the flight issue the refund if there are multiple airlines 
involved. The Department solicits comment on whether, rather than 
requiring the last carrier that operates the flight to issue the 
refund, it should require the carrier that marketed the last flight 
segment provide the refund. Through contractual agreements, carriers 
and ticket agents can determine how best to prorate the cost of refunds 
among themselves.
    Similar to our proposal on refunding baggage fees, this NPRM does 
not propose to hold ticket agents that sell the ancillary services 
responsible for refunds. The Department is proposing a simple refund 
process to avoid passengers being sent back and forth among different 
entities in situations where one entity charged the passenger the fee 
for the ancillary service and another entity failed to provide the paid 
for service. Accordingly, the Department is seeking a general overview 
of ticket agents' role in the transaction and collection of ancillary 
service fees and the process of how fees collected by ticket agents are 
transferred to carriers. This information will assist the Department in 
determining how the Department's regulation requiring airlines to 
refund ancillary service fees should address the role of ticket agents 
and other non-carrier entities that may play a role in the sales of 
ancillary services.

Regulatory Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review)

    This action has been determined to be not significant under 
Executive Order 12866 (``Regulatory Planning and Review''), as 
supplemented by Executive Order 13563 (``Improving Regulation and 
Regulatory Review''). Accordingly, the Office of Management and Budget 
(OMB) has not reviewed it under that order.
    The proposed rule would mandate refunds of baggage fees for 
significantly delayed checked baggage. It would set a threshold of 12 
hours for domestic baggage and 25 hours for international baggage. The 
proposed rule would also mandate refunds of ancillary fees for services 
that passengers did not receive.
    Refunds of baggage fees and ancillary service fees represent a 
transfer from airlines to passengers whose bags were mishandled by the 
airline. Accordingly, the impacts of this rule are

[[Page 38431]]

predominantly distributional and not expected to generate significant 
net economic costs or benefits. For baggage fees, the estimated size of 
the transfer (or redistribution) is between $10.71 million and $11.43 
million annually. This estimate, based on a Department analysis of 
baggage fee refunds available in this rulemaking docket, is an upper-
bound estimate which assumes that passengers pay fees for all delayed 
bags. For ancillary fees, it is generally current practice for airlines 
to give refunds when passengers do not receive ancillary services on 
flights, as described in Section III.A. Some airlines have codified 
this practice in their published refund policies as well. Given current 
practice, the Department does not expect that the requirement to refund 
ancillary service fees would have significant distributional impacts.
    The baggage fee refund requirement in the proposed rule could have 
some administrative costs, which are economic costs, because airlines 
may need to hire additional staff to process refunds. The requirement 
has an estimated annual cost between $4.18 million and $4.41 million, 
assuming that staff process refunds manually. (If refunds are processed 
electronically, as is expected in at least some cases, this cost could 
decrease.) Airlines should not incur significant administrative costs 
due to the ancillary service fee refund requirement, to the extent that 
the refunds are part of current practice. This conclusion could change 
if the proposed rule induces more passengers to seek refunds from 
carriers. In that case, the ancillary service fee refund requirement 
could add administrative costs and have distributional implications.
    The Department seeks comment and additional data to quantify the 
effects of the proposed rule on baggage fee and ancillary service fee 
refunds, as well as information on potential impacts on passenger 
behavior.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601 et seq.) 
requires Federal agencies to consider the effects of their regulatory 
actions on small businesses and other small entities, and to minimize 
any significant economic impact. When an agency issues a rulemaking 
proposal, the RFA requires the agency to ``prepare and make available 
for public comment an initial regulatory flexibility analysis'' which 
will ``describe the impact of the proposed rule on small entities'' (5 
U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a 
rule, in lieu of preparing an analysis, if the proposed rulemaking is 
not expected to have a significant economic impact on a substantial 
number of small entities.
    The entities that would be directly regulated by this proposed rule 
are U.S. and foreign air carriers that charge baggage fees and other 
ancillary fees in scheduled air transportation. Under 14 CFR 399.73, 
for the purposes of the Department's implementation of the RFA, a 
carrier is a small business if it provides air transportation 
exclusively with small aircraft, defined as any aircraft originally 
designed to have a maximum passenger capacity of 60 seats or less or a 
maximum payload capacity of 18,000 pounds or less.
    The Department does not expect that this rule would have a 
significant economic impact on a substantial number of small entities. 
Some small carriers that qualify as small businesses operate flights as 
part of a code-share arrangement with a larger carrier. In these cases, 
the larger carrier collects the baggage fees and other ancillary 
service fees and would be responsible for the refunds under the 
proposal. At least five small carriers operating in 2018 had code-share 
arrangements with larger carriers covering some portion of their 
flights. For other flights, the estimated economic effects for carriers 
are small. As described in the baggage fee refund analysis, the 
estimated annual refund payments ($10.71 million to $11.43 million) and 
administrative costs for carriers ($4.18 million to $4.41 million) 
would account for less than 0.5 percent of their annual baggage fee 
revenues ($3.8 billion in 2015, the year used in the analysis due to 
data availability). As baggage handling and tracking technologies 
improve, we expect that the percentage of delayed bags affected by the 
rule and resulting economic effects would decrease further.
    Accordingly, the Department certifies that the proposed rule, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities. The Department invites comment on 
this certification and on the analysis presented in support of it.

C. Executive Order 13132 (Federalism)

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 (``Federalism''). This 
document does not propose any provision that: (1) Has substantial 
direct effects on the States, the relationship between the National 
Government and the States, or the distribution of power and 
responsibilities among the various levels of government; (2) imposes 
substantial direct compliance costs on State and local governments; or 
(3) preempts State law. States are already preempted from regulating in 
this area by the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, 
the consultation and funding requirements of Executive Order 13132 do 
not apply.

D. Executive Order 13084

    This NPRM has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13084 (``Consultation and 
Coordination with Indian Tribal Governments''). Because none of the 
options on which the Department is seeking comment would significantly 
or uniquely affect the communities of the Indian tribal governments or 
impose substantial direct compliance costs on them, the funding and 
consultation requirements of Executive Order 13084 do not apply.

E. Paperwork Reduction Act

    This NPRM does not proposes a new collection of information that 
would require approval by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 49 U.S.C. 
3501 et seq.).

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (UMRA) requires, at 2 
U.S.C. 1532, that agencies prepare an assessment of anticipated costs 
and benefits before issuing any rule that may result in the expenditure 
by State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. As described elsewhere in the preamble, 
this proposed rule would have no such effect on State, local, and 
tribal governments or on the private sector. Therefore, the Department 
has determined that no assessment is required pursuant to UMRA.

G. National Environmental Policy Act

    The Department has analyzed the environmental impacts of this 
proposed action pursuant to the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is 
categorically excluded pursuant to DOT Order 5610.1D, Procedures for 
Considering Environmental Impacts (81 FR 92966, Dec. 15, 2016). 
Categorical exclusions are actions identified in an agency's NEPA 
implementing procedures that do not normally have a significant impact 
on the environment and therefore do not require either an environmental 
assessment (EA) or environmental impact statement (EIS). See 40 CFR 
1508.4. In analyzing the applicability of

[[Page 38432]]

a categorical exclusion, the agency must also consider whether 
extraordinary circumstances are present that would warrant the 
preparation of an EA or EIS. Id. Paragraph 10.c.16.h of DOT Order 
5610.1D categorically excludes ``[a]ctions relating to consumer 
protection, including regulations.'' This proposal relates consumer 
protection. The Department does not anticipate any environmental 
impacts, and there are no extraordinary circumstances present in 
connection with this rulemaking.

    Signed on June 23, 2021, in Washington, DC
Peter Paul Montgomery Buttigieg,
Secretary of Transportation.

List of Subjects

14 CFR Part 259

    Air carriers, Consumer protection, Reporting and recordkeeping 
requirements.

14 CFR Part 260

    Air carriers, Consumer protection.

    For the reasons set forth in the preamble, the Department proposes 
to amend 14 CFR chapter II as follows:

PART 259--ENHANCED PROTECTIONS FOR AIRLINE PASSENGERS

0
1. The authority citation for 14 CFR part 259 continues to read as 
follows:

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, 
41708, 41712, and 42301.

0
2. Amend Sec.  259.5 by revising paragraphs (b)(3) and (5) to read as 
follows:

Sec.  259.5  Customer Service Plan.

* * * * *
    (b) * * *
    (3) Delivering baggage on time, including making every reasonable 
effort to return mishandled baggage within 12 hours for domestic 
flights and within 25 hours for international flights, compensating 
passengers for reasonable expenses that result due to delay in 
delivery, as required by 14 CFR part 254 for domestic flights and as 
required by applicable international agreements for international 
flights, and refunding passengers for any fees charged to transport a 
checked bag that is delayed or lost, as required by 14 CFR part 260;
* * * * *
    (5) Where ticket or ancillary service fee refunds are due, 
providing prompt refunds within 7 days, as required by 14 CFR 374.3 and 
12 CFR part 226 for credit card purchases, and within 20 days after 
receiving a complete refund request for cash and check purchases, and 
other means of payment. Refunds must be in the original form of payment 
(such as credit card, debit card, cash or check, airline miles);
* * * * *
0
3. Add part 260 to read as follows:

PART 260--REFUNDS FOR AIRLINE ANCILIARY SERVICE FEES

Sec.
260.1 Purpose.
260.2 Definitions.
260.3 Applicability.
260.4 Refunding fees for ancillary services that passengers paid for 
but that were not provided.
260.5 Refunding fees for significantly delayed or lost bags.
260.6 Providing prompt refunds.

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 41702, and 
41712.

Sec.  260.1   Purpose.

    The purpose of this part is to ensure that carriers refund 
passengers for ancillary services related to air travel that passengers 
paid for but were not provided. This part is also intended to ensure 
that carriers refund passengers for fees to transport checked bags that 
are lost or significantly delayed.

Sec.  260.2   Definitions.

    As used in this part:
    Air carrier means a citizen of the United States undertaking by any 
means, directly or indirectly, to provide air transportation.
    Ancillary service means any service related to air travel provided 
by a covered carrier, for a fee, beyond passenger air transportation. 
Such service includes, but is not limited to, checked or carry-on 
baggage, advance seat selection, access to in-flight entertainment 
program, in-flight beverages, snacks and meals, pillows and blankets, 
and seat upgrades.
    Checked bag means a bag or an item other than a bag that was 
provided to a carrier by or on behalf of a passenger, for 
transportation in the cargo compartment of a scheduled passenger 
flight. A checked bag includes a gate-checked bag and a valet bag.
    Covered carrier means an air carrier or a foreign air carrier 
operating to, from or within the United States, conducting scheduled 
passenger service.
    Covered flight means a scheduled flight operated or marketed by a 
covered carrier to, from, or within the United States.
    Foreign air carrier means a person, not a citizen of the United 
States, undertaking by any means, directly or indirectly, to provide 
foreign air transportation.
    Significantly delayed checked bag means a checked bag that is not 
delivered to the passenger or the passenger's agent within 12 hours of 
the last flight segment's arrival for domestic itineraries and within 
25 hours of the last flight segment's arrival for international 
itineraries, including itineraries that include both international 
flight segment(s) and domestic flight segment(s).

Sec.  260.3   Applicability.

    This part applies to all covered carriers that collect fees, 
including checked baggage fees, for ancillary services to be provided 
on or in relation to a covered flight.

Sec.  260.4   Refunding fees for ancillary services that passengers 
paid for but that were not provided.

    A covered carrier shall promptly provide a refund to a passenger 
for any fees it collected from the passenger for ancillary services 
related to air travel if the service was not provided, including fees 
for services on the passenger's scheduled flight, on a subsequent 
replacement flight if there has been a rescheduling by the carrier, or 
on a flight not taken by the passenger due to oversales or a flight 
that is not operated by the carrier. If a ticket agent collected the 
ancillary fee, the carrier that is scheduled to operate the flight or 
if multiple-carrier itineraries, the carrier that is scheduled to 
operate the last segment of the passenger's itinerary is responsible 
for providing a refund.

Sec.  260.5   Refunding fees for significantly delayed or lost bags.

    Upon receiving a notification pursuant to paragraph (b) of this 
section from a passenger, a covered carrier that collected a checked 
baggage fee from the passenger or, if a ticket agent collected the 
checked baggage fee from the passenger, the covered carrier that is 
scheduled to operate the flight or the covered carrier that is 
scheduled to operate the last segment of the passenger's itinerary if 
multiple-carrier itineraries, shall promptly provide a refund to the 
passenger of any fee charged for transporting a significantly delayed 
checked bag.
    (a) Determining the length of delay. (1) For the purpose of 
determining whether a refund of the baggage fee is due, the 12-hour 
deadline for domestic itineraries and the 25-hour deadline for 
international itineraries is calculated from the time when a passenger 
was given the opportunity to deplane from the aircraft at the 
passenger's final destination; or, if the final travel segment was on 
alternate ground transportation, a comparable time when the passenger 
disembarks from the ground transportation.

[[Page 38433]]

    (2) For the purpose of determining whether a refund of the baggage 
fee is due, a delayed bag is considered to have been delivered to a 
passenger or a passenger's agent if:
    (i) The bag has been transported to a location, other than the 
destination airport, based on agreement by the passenger and the 
carrier, whether or not the passenger is present to take possession of 
the bag;
    (ii) The bag has arrived at its intended final destination airport 
and is available for pick up, and the carrier has provided notice to 
the passenger or the passenger's agent (e.g., via push notice through a 
mobile application, email, or text message) that the bag has arrived at 
that airport and is ready for pick up; or
    (iii) The bag has arrived at the intended final destination airport 
and the carrier has provided notice to the passenger or the passenger's 
agent (e.g. via push notice through a mobile application, email, or 
text message) that the bag has arrived at that airport and will be 
delivered to a location that the passenger and carrier have agreed on.
    (b) Notification of carrier by passenger about lost or 
significantly delayed bag. A covered carrier's obligation to provide a 
prompt refund for a lost bag or a significantly delayed bag does not 
begin until passengers provide notification of the lost or 
significantly delayed bag. If the entity that collected the baggage fee 
is the same entity that received a mishandled baggage report from the 
passenger, the filing of the mishandled baggage report constitutes a 
notification from the passenger for the purpose of receiving a refund, 
if due, for the baggage fee. In all other situations, passengers must 
inform the carrier that collected the baggage fee of the lost or 
delayed bag; or, if a ticket agent collected the bag fee, passengers 
must inform the carrier that operated the last flight segment about the 
lost or delayed bag for the purpose of receiving a refund for the 
baggage fee for a significantly delayed bag.

Sec.  260.6   Providing prompt refunds.

    When a refund of a fee for an ancillary service, including a fee 
for lost or significantly delayed checked baggage, is due pursuant to 
this part, the refund must be issued promptly consistent with the 
requirement of 14 CFR 259.5(b)(5).

[FR Doc. 2021-13736 Filed 7-20-21; 8:45 am]
BILLING CODE P