While Fliers Fume, Fewer Fines for Airlines

The Department of Transportation's enforcement of airline rules dropped sharply last year with the total of fines levied against airlines and travel companies falling to the lowest level since 2001.

The enforcement decline comes even though consumer complaints have been rising and the past two years have seen outcries over airlines leaving passengers stranded on airplanes for hours and surprising passengers with a plethora of new fees and surcharges.

In 2008, the DOT filed 20 cases against airlines and travel companies with fines totaling $1.2 million, compared with an average of 31 cases each year for the previous five years and annual fines averaging $4.3 million over that period. Enforcement activity peaked in 2003 and 2004, with fines topping $8.1 million in 2003 and 38 enforcement cases in 2004.

DOT says its staffing in its enforcement office in recent years crested at 19 in 2003, but fell to 14 by 2007. Staffing was back up to 19 by last September, the agency says.

Other Priorities

The number of cases filed last year declined because of focus on other priorities, DOT said. In a statement, Sam Podberesky, DOT assistant general counsel for aviation enforcement and proceedings, cited "high priorities [such] as consumer rulemakings, the Tarmac Delay Task Force, consumer forums and compliance outreach efforts."

The total amount of civil penalties assessed over the past several years has declined, Mr. Podberesky said, because of "the nature of the enforcement cases resolved in those years" -- some cases merit larger fines than others.

Aviation consumer protection will likely become an issue with a new Congress and presidential administration. Advocates say a new effort to pass a passenger's bill of rights is in the works on Capitol Hill, focusing primarily on how long airlines can keep passengers stuck inside jets sitting on the ground. Past moves to create these kinds of rules for airlines have failed, with carriers lobbying against new regulations and courts ruling that states can't impose rules themselves since aviation is governed by federal law.

Forgiving Penalties

DOT has historically taken a lenient stance on fines against airlines, typically forgiving half of assessed penalties if airlines or travel companies don't get caught in the same transgression again for a year. Additional amounts are often forgiven if the airline spends money on training employees on policies such as handling disabled passengers or even reprogramming computer systems to properly display fuel surcharges and other airline-imposed fees charged to all customers.

Of the $1.2 million the DOT assessed in fines last year, for example, the most the agency will collect is $527,500.

One case that stood out last year for more-aggressive DOT action was a consent order signed by US Airways Group Inc. over cheating passengers involuntarily bumped from flights out of cash compensation.

Under federal rules, airlines have to ask for volunteers to give up seats when flights are over-sold. Volunteers are typically paid in airline vouchers good toward future flights. But for passengers who don't volunteer and are denied boarding, airlines are required to inform them of their rights in writing and pay them cash compensation of as much as double their ticket price for that flight, up to a maximum $800.

A series of complaints to DOT from US Airways customers led to an investigation and the agency found that on some occasions, US Airways agents didn't solicit volunteers, didn't furnish the required written notice of rights to passengers denied boarding and didn't properly compensate passengers, offering only airline vouchers instead of cash or a check.

DOT fined US Airways $140,000 and didn't waive half the fine. The agency gave US Airways only 30 days to pay the penalty.

Mr. Podberesky said the size of the fine, the largest of 2008, resulted from "the nature and number of alleged violations and the strength of our evidence."

Associated Press

US Airways told DOT it did ultimately compensate all of the passengers identified by DOT and the carrier revamped its training program so airport staff is aware of bumping rules.

Consumer advocates complain the DOT has taken a very narrow view of what it can enforce, focusing primarily on whether airlines and travel companies include fees and surcharges in advertised fares and whether they comply with disability-access requirements. Under federal law, DOT can investigate "unfair and deceptive practices," but because the U.S. doesn't have "passengers' rights" legislation, there aren't many specific regulations on consumer rights in air travel.

"With the exception of some laws and rules on handicapped access, it's been pretty much the dead letter," said Paul Hudson, executive director of the Aviation Consumer Action Project. "They ignore consumers."

One particular beef: Rarely does DOT force airlines or travel companies to reimburse travelers for transgressions.

DOT says it has no authority to order restitution to consumers, but sometimes airlines do agree to provide it.

Last year, DOT's cases focused largely on how small airlines and package tour companies displayed prices in advertisements and on Web sites, sometimes excluding fuel surcharges and other fees that the DOT requires be built into base domestic fares. For domestic tickets, for example, airlines have to include fuel surcharges in the base price and can't separate them out as they do for government taxes and security fees.

Rules on Fees

Of the 20 cases DOT filed last year, nine were for advertisements and Web site displays that violated rules on including fees. Allegiant Airlines was fined $50,000 for displaying fares on its Web site that didn't include a $11.50 "convenience fee" the airline charged to any customer who didn't buy tickets at the airline's ticket offices. The DOT required Allegiant to pay $10,000 of the fine, and agreed to forgive $15,000 to cover the cost of reprogramming computer systems and waive $25,000 if Allegiant didn't violate the DOT's order for 15 months.

Allegiant told DOT it believed the Web site displayed the fee properly because it was added before purchase, even though it wasn't included in initial prices displayed. The "convenience fee" was like a baggage fee, the airline argued, since not every customer had to pay it. But the airline agreed to cooperate with DOT and revise its Web site.

Write to Scott McCartney at middleseat@wsj.com