New Rules on Airline Delays Mean a $200K Fine for Southwest

On the eve of the Department of Transportation's new three-hour wait limit on the tarmac rule, the agency fined Southwest Airlines $200,000 for violating federal rules on overbooking and bumping passengers off flights. It's an obvious attempt to show airlines that the department has teeth. Too bad that the punishment was quickly lowered by $90,000, provided Southwest promised not to do it again.

According to a report from the Associated Press:

Federal rules require airlines to first ask for volunteers who will give up their seats in exchange for compensation. After that, airlines can begin to bump ticketed passengers. Most passengers bumped from flights are entitled to up to $800 in cash. . . . In a consent order, the Transportation Department said it would waive $90,000 of the civil penalty if Southwest did not break the rules again in the next year. Also, Southwest can use $20,000 of the fine to develop ways to notify passengers of their rights and the airline's policy on overselling flights.

"There will be strong enforcement," LaHood told reporters in a conference call. "I just think that has to part of our plan to make sure that passengers understand and that airlines understand we're serious about this."

LaHood sidestepped a question about whether he will seek the maximum fine against airlines that break the rule -- $27,500 per passenger. But he pointed to his department's recent $16.4 million fine against Toyota for its slow response to sticking gas pedals as an indication of his inclination.

"I don't think anybody thinks that Ray LaHood is not going to have strong enforcement," he said.

Airlines are supposed to report the delays to the department starting Thursday, but LaHood said that if airlines don't turn themselves in then it's likely pissed-off passengers will.

In fact, it was complaints from passengers that started the new regulations. Last year, Continental Express Flight 2816 was diverted to Rochester, Minn. because of thunderstorms. Forty-seven passengers were kept overnight in the plane because Mesaba Airlines staff refused to open the gate so they could enter the terminal. The Department of Transportation fined Continental Airlines, Expressjet Airlines and Mesaba Airlines $175,000 for the six-hour delay that included overrun toilets, crying babies and no fresh air. In December, LaHood said the new rule was to protect the consumer and passengers from being held captive on stranded planes. (There were close to 900 delays lasting three hours or more between February 2009 to February 2010.)

However, a result of the new law will be that airlines will simply work around it. Apparently US Airways has told pilots that after two-and-a-half hours, they should drop off passengers at the terminal so the three-hour countdown stops and can begin anew. As commenter AirBoss eloquently put it,

Unintended consequence: more proactive flight cancellations. Result: fewer lengthy delays, FAR MORE interrupted trip plans.

Advocates for consumer rights have pooh-poohed the airline industry's Negative Nancies, saying even cancellations were preferable to being stuck in a plane.

"If I'm going to be stuck three hours someplace, I'd rather be stuck in a terminal or even my house, as opposed to a tin can where I have less rights than a prisoner of war," said Kate Hanni, a passenger advocate.

On Thursday, LaHood will have an opportunity to make good on his threats as the agency begins patrolling for violators. We'll see how effective he will be, or if this is all just about scare tactics.

Photo: Department of Transportation