U.S. markets closed
  • S&P 500

    +3.82 (+0.08%)
  • Dow 30

    -201.79 (-0.56%)
  • Nasdaq

    +86.95 (+0.59%)
  • Russell 2000

    +3.02 (+0.14%)
  • Crude Oil

    +0.42 (+0.50%)
  • Gold

    +2.10 (+0.12%)
  • Silver

    +0.10 (+0.42%)

    0.0000 (-0.00%)
  • 10-Yr Bond

    +0.0610 (+3.57%)

    -0.0041 (-0.30%)

    +0.3950 (+0.35%)

    -987.56 (-2.28%)
  • CMC Crypto 200

    -23.84 (-2.32%)
  • FTSE 100

    +68.28 (+0.91%)
  • Nikkei 225

    +209.24 (+0.74%)

Airlines now have to refund fees for delayed baggage

On Tuesday, the Department of Transportation (DOT) announced a handful of new rules designed to create more transparency in the airline industry. One of the main changes will require airlines to issue refunds for delayed baggage. Currently, airlines only have to reimburse the checked baggage fee if they lose luggage. The new rule, which will be implemented sometime next year, would force airlines to return the $25 or $50 you spent to check a bag if your luggage is “substantially delayed.” The DOT has yet to define what constitutes a substantial delay.

If you’ve flown on a plane in the last three years, then you know much has changed in the industry. Low cost airlines have risen to prominence, boasting more affordable tickets, while charging fees for everything from checked luggage, seat selection and carry-on bags. Their success has led to legacy carriers like Delta and American to follow suit, charging customers for any “extra” they can think of.

In some ways the changes have been good for consumers. Competition among airlines has increased, and travelers have more options than ever when it comes to choosing an airline and finding affordable airfare. Sure, the fees have gotten out of control, but actions taken by the Obama administration in 2011 now require carriers to disclose fees for baggage, meals, canceling or changing reservations, and other optional services on their websites. Hoping to build on that progress, the new regulations follow an executive order President Obama issued in April to boost competition and increase transparency for consumers.

“The actions will help consumers know how airlines are performing, make sure consumers don’t have to pay for services they don’t receive, and help consumers find the best flight options,” the White House Press Secretary said in a statement. “That will create a more competitive market, with better outcomes for American consumers.”

The DOT also said it would prohibit online ticket agents from giving users biased search results. According to the DOT, nearly 700 million passengers fly every year in the US, and many book airfare through online travel agents like Priceline and Orbitz. The new rule would ensure that consumers get to see all available flight options.

The proposed rules also outline new guidelines for protecting travelers with disabilities and provide new methodology for how airlines report lost baggage.

All of these changes sound like a win for consumers, but some worry that additional rules could negatively impact flyers. While airline fees are on the rise, the price of an airline ticket is actually down 6% this year compared to 2015. In July, airfare dropped to the lowest level since 2010, thanks in large part to lower fuel prices. Nicholas E. Calio, CEO of Airlines for America, an association that advocates on behalf of airlines, says (not surprisingly) that the DOT’s rules could impact customers benefiting from affordable fares and the ability to choose and pay for the services that best meet their needs.

“It would be difficult to find an industry that is more transparent than the airline industry; customers always know exactly what they are paying for before they buy,” Calio said in a statement. “Efforts designed to re-regulate how airlines distribute their products and services are bad for airline customers, employees, the communities we serve and our overall US economy.”

These new measures build on previous actions taken by the Obama Administration in 2009 and 2011 to improve the airline passenger experience. Some of those changes include:

-Limiting the amount of time airlines can keep passengers on the tarmac to three hours on domestic flights and four hours on international flights.

– Allowing passengers to hold a reservation made directly with an airline without payment or cancel a reservation within 24 hours without penalty, if the reservation is made one week or more prior to a flight’s departure date.

-Protection for consumers who are involuntarily bumped from oversold flights with greater compensation.

– Requiring airlines to promptly notify consumers of delays of over 30 minutes, as well as cancellations and diversions.

-Mandating that advertised and listed airfares must be the entire fare to be paid by the consumer, including all government taxes, in every advertised price.

Brittany is a writer at Yahoo Finance.

Read more:

6 traits of successful entrepreneurs

This program proves you don’t have to quit your job to travel the world

The best dates to book airfare for Thanksgiving and Christmas