The Obligations of Airlines and the Rights of

Passengers
Vol. 30 No. 3
ByAlexander Anolik
Alexander Anolik (anolik@travellaw.com) is a 38-year veteran travel and tourism lawyer and is
general counsel to the Association of Retail Travel Agents. He has taught travel law at Cornell Law
School, San Francisco State University, and San Francisco Law School, among other schools.
The airline counter agents worst nightmare is
announcing your flight has been canceled or unfortunately, your luggage will not arrive until
tomorrow to a plane full of attorneys. Air travel has become more frustrating over the past decade.
There are more cancellations, tarmac delays, and passenger horror stories than ever before.
When problems arise, your rights as a passenger do not come from consumer-friendly state laws.
Instead, they are dictated by international treaties, federal statutes, and other regulations that sole
practitioners are not used to dealing with. Insulation from state consumer protection laws, inefficient
enforcement of federal law, and Congresss refusal to pass a Passenger Rights Bill has allowed air
carriers to cut services year after year without repercussions. However, the U.S. Department of
Transportation (DOT) has recently stepped up with the Enhancing Air Passenger Protections initiative
and implemented rules to ensure that passengers have basic protections when problems arise.

Lost, Damaged, or Delayed Luggage
In 2012 passengers filed a record 1.78 million reports with carriers when their luggage was lost,
damaged, or delayed. Now that everyone travels with smartphones and laptops, losing luggage could
mean the loss of thousands of dollars. In the past, many air carriers were enforcing unreasonably low
limitations of liability for lost, damaged, or delayed luggagelimits in the range of $500 to $1,000.
Many carriers also included clauses disclaiming all liability for common items including cash,
computers, telephones, cameras, and medicine. These limitations of liability were contained in the
airlines Contract of Carriage, the agreement governing the relationship between the air carrier and
the passenger. This overwhelming document, full of legalese and every imaginable limitation of
liability, is a textbook contract of adhesion.
In 2010 the DOT recognized that these limitations and exclusions were seriously harming consumers.
The DOT issued a rule requiring carriers to take responsibility for, at minimum, $3,300 (adjusted
annually for inflation) in case of lost, damaged, or delayed luggage on domestic routes (14 CFR
254.4). As a second measure of consumer protection, the DOT invalidated the airlines exclusion
clauses and required carriers on both domestic and international flights to compensate passengers for
all items in their baggage. So, your electronics and other valuable items are now covered, but I still
dont advise packing your Ming vase.
To enforce these new rules, the DOT has the power to impose fines of $27,500 per incident on carriers
that include lesser limits in their Contracts of Carriage or that refuse to pay legitimate claims.
Unfortunately, many carriers still have not gotten the message and continue to inform bewildered
passengers that they would not pay for an iPhone or laptop in the lost luggage. When this occurs to
one of my clients, I have the consumer file a quick online complaint with the DOT
(dot.gov/airconsumer). For consumers going to battle with mega-carriers like United, which
accumulated one-quarter of all carrier complaints in 2012, sometimes a DOT complaint is needed to
obtain an attitude adjustment. In addition to imposing a fine, the DOT can also place the carrier on
probation to ensure that it takes significant corrective steps to prevent future violations.
Unfortunately, international routes are beyond the reach of the DOT rules because they are governed
by the Montreal Convention, an international treaty. The Montreal Convention provides the surprisingly
low amount of 1,000 Special Drawing Rights (SDRs) per passenger for lost, damaged, or delayed
luggage on international flights. The value of SDRs is based on an average of a market-basket of
foreign currencies; currently, 1,000 SDRs equals $1,518. The same 1,000 SDRs applies for passengers
flying within the European Union (EU) because the EU integrated the Montreal Conventions limits into
its laws.
Delays and Cancellations
Under U.S. law, air carriers are permitted to delay or cancel flights with practically no consequences.
Contrary to popular belief, there is no U.S. law requiring them to provide meal vouchers or hotels.
However, some airlines will provide these accommodations because they agreed to do so in their
Contracts of Carriage. So, when you are buying your ticket, dont just compare price. Go a step
further and compare the protections under the carriers Contracts of Carriage. Sometimes paying a
few extra dollars for a ticket will get you a room and a meal in case of delay.
Under EU law, there are repercussions for delays and cancellations. Passengers are entitled to
reimbursement for reasonable meals and refreshments and two free telephone calls, e-mails, or faxes
where there is a sufficient delay (i.e., delays of two hours in short haul trips up to 1,500 km, three
hours in medium haul trips up to 3,500 km, and four hours in long haul trips greater than 3,500
km; Regulation No. 261/2004, Article 6). Where the delay is five hours or more, passengers are
entitled to reimbursement of the full cost of the flight ticket together with a return flight to the first
point of departure at the earliest opportunity. When a flight is canceled, the passenger is entitled to
cash payment based on the length of the flight (short haul, 250; medium haul, 400; long haul,
600; Regulation No. 261/2004, Article 5).
Tarmac Delays
For the lucky few who dont know, a tarmac delay is the holding of an aircraft on the ground either
before taking off or after landing with no opportunity for the passengers to deplane (14 CFR 244.1).
After a few particularly horrific tarmac delays in 2008 and 2009, the DOT took action. Initially, it
punished the responsible air carriers by considering the delay to constitute a violation of the broad
unfair and deceptive practices law. The DOT then took it a step further and enacted regulations strictly
limiting tarmac delays and penalizing carriers that violate the rules. Now, when a tarmac delay occurs,
passengers are entitled to the following (14 CFR 259.4):
Notification every 30 minutes about the status of the delay;
An opportunity to deplane if the carrier voluntarily chooses to open the aircraft door;
Snacks (like granola bars) and water after two hours; and
Operable lavatories.
For domestic flights, passengers must be allowed to deplane after three hours. For international
flights, they must be allowed to deplane after four hours. Failure to comply can result in penalties of
hundreds of thousands of dollars. Of course, both of these rules include broad exceptions for air traffic
control and safety/security. Under EU law there is no specific regulation targeting tarmac delays, and
they are treated like regular delays.
Overbooking and Denied Boarding
Ironically, the fact that it is perfectly legal for airlines to sell more tickets than seats on a flight
(overbooking) is the result in large part to the actions of consumer advocate Ralph Nader. Nader was
overbooked on his way to give a speech in 1972 and took the case to the U.S. Supreme Court. He lost
in Nader v. Allegheny Airlines, 426 U.S. 290 (1976), and helped the carriers establish a precedent
allowing them to overbook so long as they give passengers sufficient notice. Thus the signs at
counters and on the back of paper tickets (for those of us who still remember them).
Bumping is a bad word when you are a traveler. If you are involuntarily denied boarding, you are
entitled to immediate payment of the following compensation (14 CFR 250.5):
Domestic Flights:
0 to 1 hour arrival delay: No compensation
1 to 2 hour arrival delay: 200% of your one-way fare (up to a maximum of $650)
Over 2 hours arrival delay: 400% of your one-way fare (up to a maximum of $1,300)
International Flights:
0 to 1 hour arrival delay: No compensation
1 to 4 hour arrival delay: 200% of your one-way fare (up to a maximum of $650)
Over 4 hours arrival delay: 400% of your one-way fare (up to a maximum of $1,300)
Passengers who are involuntarily denied boarding are entitled to payment in cash/check, but many
carriers first offer payment in tickets/vouchers. Sometimes they will offer more vouchers than the
minimum cash payment. If you fly that carrier frequently, it might work out better for you to take
vouchers. But make sure to read the fine print first before accepting them. The DOT recognized this
and now requires carriers to notify passengers of the terms and conditions of travel vouchers when
they offer them (14 CFR 250.9(c)).
When a flight is oversold, carriers often request volunteers. Volunteers may be offered any amount of
compensation by the carrier. If I absolutely need to get onto a flight that has been oversold, I will yell
out (without alarming the security officers) that I will throw in an extra few hundred dollars to obtain a
volunteer. As attorneys we are taught how to make deals work. Another few hundred when you have
to get to a meeting and you are billing at twice this amount or more has worked for me and for my
friends who have called me from the airport asking what to do.
The United States and EU differ regarding compensation for involuntary denial of boarding. Under EU
law, a carrier must pay a volunteer the full cost of the ticket and provide a return flight to the first
point of departure at the earliest opportunity. If the passenger is denied boarding involuntarily, the
carrier must treat this passenger as though his or her flight was canceled, which entitles the
passenger to reimbursement of the ticket price within seven days, rerouting, meals/refreshments, a
hotel, and the cash payment discussed above (Regulation No. 261/2004, Article 4).
Enforcing Your Rights
The bad news: There is no private right of action for violation of the DOTs consumer protection
regulations. So passengers cannot sue the airline themselves and instead must rely on the DOT to
enforce the rules. However, the DOT is no paper tiger. In 2012 the DOT brought 62 enforcement
actions and imposed more than $4 million in penalties for violations. Figure 2 shows the types of
actions brought by the DOT and the frequency of enforcement. Unfortunately, injured passengers
dont have a right to compensation under the law, and the U.S. government keeps all the penalty
money.

Clever attorneys have tried to work around the lack of private right of action by bringing suit under
state laws (usually consumer protection statutes and/or tort theories). These attorneys find
themselves stymied when they discover the complete federal preemption enjoyed by the airlines.
InMorales v. Trans World Airlines,504 U.S. 374 (1992), the Supreme Court held that federal
preemption completely prohibits states from enforcing any law relating to rates, routes, or services
offered by an air carrier. So I caution attorneys to familiarize themselves withMorales before bringing
an action against an airline.
Practically all state consumer protection statutes and tort claims are rendered useless against air
carriers. This leaves consumers and their attorneys with just one remaining cause of action: breach of
contractspecifically, breach of the completely one-sided, adhesive Contract of Carriage. On average,
legitimately harmed passengers are able to get their money back in small claims court for breach of
contract. Unfortunately, small claims court does not offer the remedies consumers and attorneys
generally hope for, such as reimbursement of attorney fees, emotional distress damages, and punitive
damages.
What to Do When Problems Arise
When problems arise at the airport, your best initial response is to go online to the carriers Contract
of Carriage to see what your rights are under the contract. Are you entitled to overnight hotel and
meals? Will the carrier send you to another carrier that can get you there sooner? Thanks to a recent
DOT rule (14 CFR 259.6), all air carriers must post their Contracts of Carriage on their websites and
make them easy to locate from the carriers home page. Next, go to my website, travellaw.com, which
has travelers rights information, including easy-to-understand articles and television interviews on
emergency ways of handling these issues.
Take Off on a New Adventure
Finally, dont feel you must limit your involvement in this area of the law to those unfortunate
occasions when you personally find yourself seeking redress. Travel and tourism is the number-one
service industry in many countries, and the number of counsel emphasizing this practice is amazingly
few. It is certainly a fun area to practice in. Maybe now is the time to schedule your departure for the
wonderful world of travel law.