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Federal Register / Vol. 86, No. 137 / Wednesday, July 21, 2021 / Proposed Rules the delayed bag calculation clock would start when the passengers actual transportation arrived, whether a flight or other mode of transportation. The Department seeks comment on whether this position on alternate travel arrangements creates unreasonable burdens for consumers and airlines.
e. Type of baggage Commenters also sought clarity on the meaning of checked baggage. A4A
specifically states that fees collected for gate-checked bags should not be subject to the refund requirement as gate baggage handling charges are independent of bag fees and carriers assess gate handling fees to encourage passengers to check their bags at the ticket counter. With respect to what type of baggage is subject to the refund requirement, 49 U.S.C. 41704, note states that the refund requirement applies to checked baggage. The Department interprets this to include not only bags checked with carriers at the ticket counters, but also gatechecked bags and valet bags if the passenger paid a fee to transport the bags. Generally, airlines do not charge for valet bags and valet bags are delivered on time. Both a gate-checked bag and a valet bag would be checked in with carrier personnel at the departure gates for transportation in the aircraft cargo compartments, but a gatechecked bag would be claimed by the passenger at the final destination at the baggage claim area, while a valet bag would be returned to the passenger at the end of the flight segment when the passenger disembarks the aircraft. A4A
in its comment argues that gate-checked bag fees should be treated differently because carriers often charge a gatechecked bag fee that is higher than the regular checked baggage fees to encourage passengers to check their bags at the ticket counter. Regardless of the reason for the fee, 49 U.S.C. 41704, note mandates that airlines must refund baggage fees if a bag is not delivered in a timely manner.

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III. Refunding Fees for Ancillary Services That Were Not Provided A. Background The provision at 49 U.S.C. 42301, note prec. requires the Department to promulgate a rule that mandates that airlines promptly provide a refund to a passenger of any ancillary fees paid for services related to air travel that the passenger does not receive, including on the passengers scheduled flight, on a subsequent replacement itinerary if there has been a rescheduling, or for a flight not taken by the passenger. The
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Departments regulation in 14 CFR
259.5b5 requires that airlines refund fees charged to a passenger for optional services that the passenger was unable to use due to an oversale situation or flight cancellation. Although the existing rule only requires refunds of ancillary fees when a passenger does not take the original flight due to oversales or cancellation, the Departments Office of Aviation Consumer Protection would review any airline practice of refusing to refund fees for ancillary services that the passenger was unable to use due to an action of the airline to determine if the airline was engaging in an unfair or deceptive practice in violation of 49
U.S.C. 41712. It is the Departments understanding that airlines in general have been providing refunds to passengers, not only when passengers are unable to use the ancillary service due to an oversale situation or flight cancellation, but also when passengers pay for ancillary services and do not receive those services from the carrier for other reasons.7
B. Proposals This NPRM proposes to codify in the rule text a requirement that airlines must refund fees a passenger pays for an ancillary service that the passenger does not receive, including due to oversales and flights cancellations, which are already in the existing rule text, and other situations when the ancillary service is not available to the passenger.
The Department seeks comments on the following issues:
1. Scope of Ancillary Services The provision at 49 U.S.C. 42301, note prec. requires that airlines refund ancillary fees paid for services related to air travel. The Department has not defined ancillary services in its aviation economic regulations.
However, the Department has defined optional services in 14 CFR 399.85d, which requires U.S. and foreign air carriers to prominently disclose on their websites marketing air transportation to U.S. consumers information on fees for all optional services available to a passenger purchasing air transportation.
Section 399.85d specifically provides that for purposes of that section, the 7 The Department notes that some carriers have published refund policies that state consumers will received a refund for fees paid for ancillary services that they did not receive. In addition, the Departments Office of Aviation Consumer Protection has reviewed its consumer complaint database and found that when carriers receive consumer complaints filed with the Department alleging that they paid for ancillary services and did not receive the services, carriers usually have been issuing refunds after verifying that the ancillary services were indeed not provided.

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term optional services is defined as any service the airline provides, for a fee, beyond passenger air transportation, including, but not limited to, charges for checked or carry-on baggage, advance seat selection, in-flight beverages, snacks and meals, pillows and blankets and seat upgrades. This definition does not include fees charged for services to be provided by entities other than airlines, such as hotel accommodations or rental cars, which are commonly offered by some airlines as a package during the airfare reservation process. In this NPRM, the Department proposes to apply a definition for ancillary services in 260.2 that is substantively identical to the definition of optional services provided in 399.85. This proposal defines ancillary service to mean any service related to air travel provided by a covered carrier, for a fee, beyond passenger air transportation. It specifies that such service includes, but is not limited to, checked or carry-on baggage, advance seat selection, access to in-flight entertainment system, inflight beverages, snacks and meals, pillows and blankets and seat upgrades.
The Department seeks public comment on whether the proposed definition, which is similar to the definition for optional service in 399.85, is appropriate to define ancillary services in the context of refunding ancillary service fees that are directly related to air travel.
2. Refund Eligibility The provision at section 42301, note prec. requires covered carriers to refund ancillary services fees for services that a passenger does not receive, including on the passengers scheduled flight, on a subsequent replacement itinerary if there has been a rescheduling, or for a flight not taken by the passenger. The Departments existing rule, in 14 CFR
259.5b5, already requires airlines to refund ancillary fees for services to be provided on a flight that a passenger was unable to use due to flight cancellation or oversales. In addition, the Departments Office of Aviation Consumer Protection has authority to investigate unfair or deceptive practices in the provision of air transportation pursuant to 49 U.S.C. 41712, and considers an airlines refusal to provide a refund to passengers for ancillary services that they purchased but did not receive to fall under that authority. As a result of this long-standing interpretation, the Department believes that members of the airline industry understand that failure to provide a refund of fees for ancillary services that an airline did not provide to a passenger could be viewed as an unfair or
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