TRAVELCONSUMERDAILY.COM
MONDAY, JULY 12, 2010

AFTER one of the worst slumps in decades, the US airline industry is beginning to see demand increase, fares rise gradually and planes fly at closer to capacity, the Los Angeles Times reports. But times are not so good for airline passengers.

The latest statistics from the US Transportation Department show that flight cancellations for May jumped about 30% from the same month last year, while consumer complaints against US airlines rose 23%. The data also shows that the number of paying passengers denied seats on flights increased 37% for the first three months of the year.

The increased cancellations may be partly the result of airlines trying to avoid new federal penalties for airlines that strand passengers on delayed flights for more than three hours. The fines, which took effect April 29, are as high as $US27,500 per passenger.

To cut spending and increase profits, airlines have cut many of the least-profitable routes and packed the remaining flights. As a result, airlines have increased the likelihood of overbooking flights and bumping more passengers.

"The number of people getting bumped is [rising] because the airlines are pushing the system as far as they can," said Tom Parsons, founder of the airline booking site Bestfares.com.

But Parsons pointed out some good news for passengers: The Transportation Department recently adopted rules that require airlines that bump passengers to increase the compensation to as much as $1300 per ticket, depending on how long the passenger must wait for the next flight, up from $800 currently.

However, the new compensation rules won't take effect until this northern hemisphere fall.