Late Bags, Bumped Flight? Airlines Pay Up

After two years of new fees and restrictions to fly the friendly skies, airline passengers were offered a bit of relief today when the Department of Transportation announced new proposals that would force domestic airlines to refund some of those new charges if their service is below par.

Among the most significant, airlines would soon have to reimburse passengers when they don't deliver luggage on time and pay more money to passengers who are involuntarily bumped from flights.

The proposed rules are the latest in a series of new, stricter rules that the Obama administration has imposed against the airlines, including a controversial regulation that limits how long passengers can be in a plane stuck on a tarmac.

Among the highlights of the proposals announced today by U.S. Transportation Secretary Ray LaHood:

Passengers must be allowed to cancel reservations within 24 hours without penalty.

VIDEO: New Rules for Airlines
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Baggage fees must be full and prominently displayed.

Refunds and expense reimbursements must be provided when bags are not delivered on time.

Price increases after a ticket is purchased are prohibited.

Timely notice of flight status changes is mandated.

"Airline passengers have rights and should be able to expect fair and reasonable treatment when they fly," LaHood said. "With this rulemaking, we're proposing to strengthen the consumer protections enacted last month and raise the bar for airlines when it comes to treating passengers fairly."

VIDEO: It took 12 hours for Continental Flight 2816 to reach its destination.
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The DOT proposals now enter a 180 day public hearing process before going into effect.

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The checked baggage rules might win the biggest cheers from consumers who have been annoyed with a bevy of new fees that airlines have imposed in the last two years.

"A lot of consumers wonder why they are paying a checked bag fee and not getting insurance against their bag not getting there or not getting there in a timely fashion," said Rick Seaney, CEO of airfare-search site FareCompare.com and an ABCNews.com columnist.

Seaney said that some airlines, like Alaska Airlines, have a policy of refunding the fee if the bags don't arrive timely on the carousel.

Another big change involves involuntary the penalty for airlines that bump passengers from flights involuntarily.

Currently, airlines must pay $400 to passengers who are forced off a flight but rebooked on another flight that arrives within two hours of their original scheduled arrival for domestic flights, or within four hours if it's an international flight. That fee rises to $800 if passengers arrive after those time limits.

The DOT is proposing to increase those limits to $650 and $1,300 respectively and then increase them every two years in step with inflation.

Bigger Refunds for Passengers Bumped from Flights

For passengers, the help could not come soon enough. While fewer people are flying these days, airlines have cut the number of available flights so much that more and more bumpings are occurring.

Last year there were 762,422 passengers bumped from flights, up 10 percent from the year before and the highest number since 2002. In the first quarter of this year, that number went up 17 percent.

"The airlines are cutting back because of the economy and the planes are fuller. So I've seen more bumping going on," said John DiScala, a blogger known as Johnny Jet.

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