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Frequent business traveler Barry Maher says airlines have lost his checked bags so frequently that he's lost count.
Maher and many other frequent fliers say airlines should be required to refund checked-baggage fees when passengers arrive at their destinations without their bags.
"It's the least they could do," says Maher, a professional speaker in Corona, Calif. "I can lose my own bags for free. I don't need to pay someone else to do it."
Unfortunately for Maher and other fliers — including many who dislike the bag fees that annually bring in billions of dollars for airlines — new government passenger-protection measures that take effect next month come up short for most passengers whose bags are lost.
The measures are part of a set of rules that will expand to foreign airlines a ban on lengthy tarmac delays, provide greater compensation to passengers involuntarily bumped from flights and force airlines to disclose hidden fees.
In April, the Transportation Department announced that the new rule "will require airlines to reimburse passengers for baggage fees if their bags are lost."
A closer look at the 59-page rule, though, reveals that airlines must only refund checked-bag fees for bags that are lost and never returned to passengers.
That's a small percentage of mishandled bags.
The Air Transport Association of America, a trade group representing major U.S. airlines, says it doesn't know what percentage of mishandled bags are lost and never returned.
American Airlines spokesman Tim Smith says the number of bags mishandled and never returned by American is "considerably less than one-tenth of 1%" of total bags handled.
Globally, the world's airlines last year mishandled 12.07 bags for every 1,000 passengers and didn't recover 0.43 bags per 1,000 fliers, according to a 2011 report by SITA, a technology company owned by the world's airlines.
Unhappy fliers
The Transportation Department's new baggage-reimbursement rule — which applies to passengers arriving at their destinations on Aug. 23 or later — doesn't sit well with many fliers.
"With a rule like that, the traveling public gets to pay no matter how long it takes the airline to return their bags or what inconvenience it might put them through," Maher says. "Certainly, any airline that was at all concerned about customer service — and you'd think there would still be one or two — would return bag fees for any luggage that didn't arrive with the customer's flight."
The Transportation Department's baggage-reimbursement requirement is "absurd," says frequent flier Larry O'Neill of Collegeville, Pa.
"Why even have a policy with a time frame like that?" asks O'Neill, who works in the wholesale bakery industry. "To me, it's like paying $30 to park in a garage and still getting charged when the gate doesn't go up for a week."
The Transportation Department decided not to require airlines to refund the fees for late bags, "because once the bag is delivered, the carrier has performed the service," says department spokesman Bill Mosley.
Airlines expect "only a minimal impact" from the baggage-reimbursement requirement, says Steve Lott, vice president for communications at the Air Transport Association.
Most airlines already refund the fees and provide compensation when bags are lost, he says.
Under a Transportation Department rule that was amended in November 2008, a passenger on a domestic flight can make a claim up to $3,300 if bags disappear, are damaged or delayed.
Airlines, though, usually require receipts proving damage and rarely pay close to the maximum for delayed bags.
Under the Montreal Convention, an international agreement that sets liability limits for international air transport, airlines are liable for damages caused by delayed bags up to a limit of about $1,821 per passenger for international flights.
In June, the Transportation Department fined Germany's Lufthansa $50,000 for limiting reimbursements for delayed bags on flights to and from the U.S. to 50% of fliers' claimed expenses.
Kate Hanni, executive director of the consumer advocacy group FlyersRights.org, says the airlines seldom, if ever, reimburse passengers for bag-check fees unless the Transportation Department applies pressure.
"Most airlines are behaving like insurance companies and denying the claims 100% of the time until the complaint is (raised to the Transportation Department) and more pressure is on them," Hanni says. "Baggage fees don't represent a huge amount of money, so many people just get frustrated and quit asking once they are rebuffed."
The good news for travelers is that airlines are mishandling fewer of their bags.
U.S. airlines last year posted the lowest rate of mishandled bags — 3.57 bags per 1,000 customers — since the Transportation Department began tracking such data in 1987, Lott says. It was the third-consecutive year of improvement, he says.
Fees for checked bags last year brought in revenue of $3.4 billion for 20 U.S. airlines, according to the Bureau of Transportation statistics. That's a huge jump from 2007, when bag fees brought in $464 million for 22 carriers.
The fees, which airlines have increasingly raised since they first began appearing four years ago, remain a sore point with many travelers.
Frequent flier John Fitzgibbon of Manorville, N.Y., is one of them.
"I understood it when the fees first began, because the economy was tough, and the airlines were losing significant dollars," says Fitzgibbon, president of a health care information technology company. "It bothers me that they now continue this practice when the flights are mostly full, and they are making money."
Fitzgibbon says the new Transportation Department rule should be extended to include bags that arrive late to a destination.
"Why pay a bag fee if your bag does not arrive, or it arrives a day or so later than you?" he asks. "You have to then scramble to buy clothes and accessories until your bag arrives."
Ticket price impact
Airlines shouldn't be required to reimburse bag fees for late-arriving bags, because, among other reasons, "automatic" refunds would raise ticket prices for passengers who do not want to check bags, Lott of the Air Transport Association, says.
"Bag fees are a competitive issue," Lott says. "Whether a carrier chooses to refund a fee in all instances is a matter the marketplace should determine."
Besides requiring reimbursement for checked-bag fees when a lost bag is never returned, the new Transportation Department rule requires U.S. and foreign airlines to disclose changes in bag fees and allowances on their homepages for three months.
It requires airlines and ticket agents to include information on electronic-ticket confirmation information about free baggage allowance and fees for the first and second checked bags.
The rule also requires airlines and ticket agents to inform consumers on the first computer screen providing a fare quote that additional airline fees for baggage may apply and where the fees can be seen.
Hanni of FlyersRights.org says airlines didn't complain loudly about the refund rule because it doesn't require them to reimburse travelers for late-arriving bags.
"The Transportation Department only did a small fraction of what it was threatening to do, which was reimburse passengers for late baggage," she says. "That would have been more costly for the airlines than just lost baggage. They split the baby, so we have more to still fight for."
Lott, however, says the public should be aware of an important statistic: During the past two years, he says, "99.96% of domestic U.S. passengers do not have any mishandled or lost bags."
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