New Measures on Air Delays

Air Safety Week, April 21, 2008

The Department of Transportation (DOT) has unveiled new measures to strengthen passenger protections and cut flight delays this summer.

DOT finalized changes to its so-called bumping rule, which doubles the limit on compensation airlines must pay passengers who are involuntarily bumped from their flight. Under the new rule which goes into effect next month, fliers who are involuntarily bumped, will be awarded as much as $800.

DOT also announced new air traffic measures designed to help cut delays this summer.

The first involves new and greater flexibility for aircraft to use alternative routes in the sky to avoid severe weather. This includes a new routing alternative that provides an "escape route" into Canadian airspace from the New York metropolitan area.

In addition, the FAA will open a second westbound route for aircraft, in effect providing a parallel route, helping to cut westbound delays from the New York area.

DOT also is proposing a new way to manage congestion at New York's LaGuardia Airport.

Even though this facility has been capped since 1968, it is still consistently one of the top three most delayed airports in the nation. Under a supplemental rulemaking, the DOT is proposing two market-based options that would require a limited number of flights operated by the airlines in a given day, known as slots, to be made available through an auction process.

Under the first option, all air carriers would be given up to 20 slots a day for the 10-year life of the rule. Meanwhile, over the next five years, eight percent of the additional slots currently used by an airline would be made available to any carrier via an auction. An additional two percent of the slots would be retired to help cut the record delays at the airport. Proceeds from the auction would be invested in new congestion reduction and capacity improvement initiatives in the New York region.

The second option also gives airlines permanent access to up to 20 slots a day for a 10-year period. Beyond those flights, 20 percent of the slots currently used by the airlines would be made available over the next five years to all airlines through an auction. Under this option, the carriers would retain the net proceeds of the auction.

DOT believes both options provide financial stability to the airlines operating at LaGuardia by providing them with a defined right to operate at the airport for a decade, something they do not have today.

"Our plan strikes a sound balance between protecting investments by incumbent carriers and ensuring that all airlines have the ability to fly to New York's LaGuardia," DOT Secretary Mary Peters said. "While the status quo at LaGuardia has led to stagnant service, delays and unnecessarily high fares, open access and competition will help give flyers more choices, fewer delays and lower fares."

The Air Transport Association of America (ATA) says "it is truly mystifying, with the airline industry in a financial meltdown due to overwhelming fuel prices, that DOT decides now is the time for a costly economics experiment at LaGuardia. It is even more ridiculous considering the DOT's highly suspect claim of legal authority it has just 'discovered' after decades of concluding the opposite."

ATA President and CEO James C. May said "the solution to delays in New York is not figuring out how to charge airlines and their passengers more, as DOT proposes, but rather getting on with modernizing the antiquated air traffic control system. DOT is wasting time and precious financial resources in 'experimenting' with increased costs to drive down demand. This proposal means fewer choices, higher costs and a reduction in service to smaller communities. The public does not want that, the Port Authority does not want that, and the airlines do not want that. What the DOT has proposed will do nothing to reduce delays."

But Airports Council International North America (ACI-NA) commended the DOT for its announcement to amend the compensation available to passengers who are involuntarily denied boarding and for expanding the measures to passengers flying on smaller aircraft.

"Airports are often required to assist passengers when they are delayed or denied boarding," said ACI-NA President Greg Principato. "ACI-NA strongly supported this increase in compensation which helps recognize the inconvenience, lost time and lost opportunities that passengers experience when delayed or bumped.

"In addition, passengers flying on regional jets, which exclusively serve more than two-thirds of communities with scheduled airline service, will now be provided the same consumer protection as passengers flying on larger planes. While airports and airlines continue to work to make the busy summer travel season less difficult for passengers, we are pleased that DOT's announcement means travelers can now expect more fair compensation if they are delayed or bumped," Principato added.

ACI-NA points out that use of regional carriers has increased tremendously in the last 10 years. In addition, 99 percent of regional airline passengers travel on code-sharing flights; the percentage increase in passengers on 31 through 60-seat aircraft has outpaced that on larger aircraft; and often there are fewer flights to re-accommodate passengers who are bumped from a small versus a large aircraft.