New federal ruling shakes up airline industry and fees

A federal ruling has been made final today stating that U.S. airline passengers can now collect $1,300 if they are forced to give up their seat on an overbooked flight, making for a 63 percent increase than the previous rate of $800. Passengers will get the full $1,300 if they arrive at their destination more than two hours later than their previously scheduled flight, but will only receive $650, up from $400, if they arrive at their destination within two hours of their scheduled time.

The ruling also requires that foreign carriers must release passengers from aircraft stuck at airports within four hours or face fines up to $27,500. Luggage fees must also be refunded if bags are lost, according to the U.S. Transportation Department. Carriers must include government taxes and fees from fare advertisements and requires that all potential fees be shown on websites.

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Passengers can cancel reservations within 24 hours of booking without penalty, and price increases after tickets have been purchased will be prohibited. The federal ruling also affects foreign carriers British Airways and Air France-KLM. According to Bloomberg, the new ruling will cost airline carriers $30.7 million over 10 years, with more than two thirds coming from new requirements for free disclosure, advertising and extension of the tarmac-delay provision to foreign carriers.

Airlines frequently oversell seats on a flight, banking on the idea that a number of travelers won’t make it to their flight. But when a flight becomes oversold, attendants will look for volunteers to vacate their seats and will offer incentives and vouchers to those who give up their seat.

Wouldn’t it be easier if airlines just booked only the seats they have available in order to eradicate the stress and ultimately today’s ruling? Considering there are so many changes going on in the airline industry and with airline passenger rights, how about put some regulation on ticket prices?!