BEFORE THE OFFICE OF THE SECRETARY U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, DC

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1 BEFORE THE OFFICE OF THE SECRETARY U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, DC In the Matter of Docket Management Facility Department of Transportation 1200 New Jersey Avenue, SE REFUNDING BAGGAGE FEES FOR West Building, Ground Floor DELAYED CHECKED BAGS Room W Washington, DC ADVANCE NOTICE OF PROPOSED 14 CFR Part 259 RULEMAKING OST COMMENTS OF THE ASSOCIATION OF ASIA PACIFIC AIRLINES Communications with respect to this document should be sent to: Mr. Andrew Herdman Director General Association of Asia Pacific Airlines Level 27-1, Menara Prestige 1 Jalan Pinang Kuala Lumpur, Malaysia. Tel: +( Fax: +( Ms. Beatrice Lim Director-Industry & Regulatory Affairs Association of Asia Pacific Airlines Level 27-1, Menara Prestige 1 Jalan Pinang Kuala Lumpur, Malaysia. Tel: +( Fax: +( Mr. Steve Martin Association of Asia Pacific Airlines 1150 Connecticut Avenue NW, Suite 601 Washington, D.C Tel: ( Fax: ( Dated: 30 November 2016

2 BEFORE THE OFFICE OF THE SECRETARY U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, DC In the Matter of Docket Management Facility Department of Transportation 1200 New Jersey Avenue, SE REFUNDING BAGGAGE FEES FOR West Building, Ground Floor DELAYED CHECKED BAGS Room W Washington, DC ADVANCE NOTICE OF PROPOSED 14 CFR Part 259 RULEMAKING OST COMMENTS OF THE ASSOCIATION OF ASIA PACIFIC AIRLINES The Association of Asia Pacific Airlines (AAPA files these comments in response to the Advance Notice of Proposed Rulemaking on Refunding Baggage Fees for Delayed Checked Bags. THE ASSOCIATION OF ASIA PACIFIC AIRLINES The AAPA is the trade association of major international airlines based in the Asia Pacific region. Its members include Air Astana, All Nippon Airways, Asiana Airlines, Bangkok Airways, Cathay Dragon, Cathay Pacific Airways, China Airlines, EVA Air, Garuda Indonesia, Japan Airlines, Korean Air, Malaysia Airlines, Philippine Airlines, Royal Brunei Airlines, Singapore Airlines and Thai Airways International. AAPA member airlines operate multiple passenger and cargo flights to various points in the United States.

3 i General Comments The Association of Asia Pacific Airlines appreciates the opportunity to provide comments on the Department of Transportation s (DOT Advance Notice of Proposed Rulemaking (ANPRM on Refunding Baggage Fees for Delayed Checked Bags (14 CFR Part 259; Docket No. DOT-OST AAPA and its member airlines are recognised airline leaders in standards of service and have always maintained a high level of customer service, often surpassing industry norms, shown in the numbers of awards and accolades garnered by AAPA member airlines over the years. The present ANPRM as written seeks to impose a number of prescriptive new restrictions on the commercial baggage handling practices of international airlines, without adequately demonstrating that the benefits of doing so outweigh the costs involved. AAPA would like to highlight some concerns on the ANPRM and respond to some of DOT s specific requests for comments. ii Defining a Baggage Delay The Act provides that a refund should be issued to passengers if the carrier fails to deliver the checked baggage to the passenger not later than 15 hours after the arrival of an international flight. This timeline is not feasible for flights operating from the Asia Pacific region as most of our members non-stop flights across the Pacific to the US last at least 10 hours or more. The flight time would take even longer if the journey involves airports located in the US East Coast. For airlines operating low frequencies such as three or four weekly flights to a given US destination, any delayed baggage is likely to arrive only on the next flight which may be over 24 or 48 hours later. The combination of long flight times and low frequencies for many international long haul carriers must be taken into account in setting any guidelines on the delivery of delayed baggage. The scenario under the present ANPRM would mean that many international long haul carriers would automatically be unfairly penalised without having the chance to take service recovery action.

4 Further, the reason for delayed baggage may not be caused by carriers, but could be due to other factors such as security checks, late receipt of baggage from an inbound connecting flight below the minimum connecting time (MCT, or delays due to airport baggage handling systems and so on. Any requirements related to the refund process should provide sufficient time for the relevant carrier to establish the cause of the delay so that it is not unfairly penalised for circumstances outside its control. There should be clear guidelines on when the clock stops in considering when baggage is considered to be delivered. In general, airlines undertake to carry the passenger and baggage to the destination airport, and treat the baggage as delivered once it arrives at the destination airport. Similarly, in the case of delayed baggage, delivery would be effected when the baggage arrives at the destination airport and the passenger receives notice of the same. Any action beyond this point, such as the option for passenger to pick up the baggage or have it delivered, should be left to individual airline s customer policies and determined by consumer choice. DOT should take into consideration the applicability of this provision in context of the airlines operations such as frequency of service and flight time. The DOT should avoid implementing a blanket, one-size fits all time frame as individual airline and case circumstances differ from the next. iii Carriage involving multiple carriers and airports DOT should review the applicability of the rule with regards to journeys involving an international flight connecting to a domestic flight on a single ticket. Such itineraries must be considered an international flight, in line with established industry practice for long haul flights. If the first carrier is able to deliver the bag to the first destination within the given time frame, the first carrier should not be penalised or made to refund the baggage fee for that particular sector. This is because there would be a number of other factors affecting the delivery time of the said bag to the next or final destination such as transfer time and capacity of the airport, frequency of flights to the final destination and the distance of the delivery address from the airport. Similarly, for journeys involving separate tickets, the first carrier should be held accountable only for their own part of the journey, per current industry standard.

5 For multiple carrier journeys, if it is determined that the baggage fee should be refunded, the originating carrier that collected the fee should be the one processing the refund. However, current industry practise is such that the claims handling and baggage delivery is undertaken by the final carrier. The complexities of long haul travel involving multiple carriers with different policies demonstrate that it is not possible to have a blanket regulation as proposed by the DOT. In addition, there is a danger that existing interline arrangements between multiple carriers may be affected by such a rule. iv Method for Refunding Delayed Baggage It is not feasible for the Department to require carriers to provide automated refunds. To automate the refund process, airlines would need to collect and store credit card or bank account details of passengers before they commence their journey. This raises many operational challenges for frontline staff as well as a number of other issues such as data protection, privacy and others. These issues will be compounded where multi-carrier journeys are involved. Upon passenger arrival at the destination airport, it would be difficult to immediately determine the exact cause for the baggage to be delayed. The burden then falls on the final carrier to effect the refund without any chance for proper investigations to be conducted to determine the actual reason. Further, if investigations show that the delay was no fault of airlines but was caused by external factors, for example inclement weather, the automated refund process would render the airline worse off even though the delay was caused by the airline. DOT should recommend to Congress to align the refund method with regulation, 14 CFR part 374, which implements the Consumer Credit Protection Act and Regulation Z of the Board of Governors of the Federal Reserve System, 15 U.S.C r and 12 CFR part 226 (Regulation Z with respect to air carriers and foreign air carriers. The refund process should be no different than other purchases for airline services made via credit card. v Costs to Airlines Almost all Asia Pacific airlines operating into the US have included free baggage allowance in the ticket. It is anticipated that the percentage of passengers paying excess baggage above the free baggage allowance and having their baggage delayed is going to be extremely small compared to other carriers that charge fees for the first bag checked in. Asia Pacific airlines would need to

6 incur significant development costs in modifying their passenger handling systems to implement this automated refund process just to cover the possibility of a very small number of passengers that experience such delays. It is our view that the associated costs far outweigh the benefits of implementing the process. DOT should consider the financial impact to airlines when requiring airlines to comply with such regulations. Conclusion Air transportation provided by air carriers are governed by their respective conditions of carriage, which includes provisions on baggage and is made available to all passengers. Such policies form part of an airline s customer service standards, and is part of the competitive commercial landscape, which ultimately offers consumers more choices in choosing the product or service offering that best fit their needs. DOT should consider the numerous scenarios in which a baggage could be delayed, a number of which may not be directly related to airline s actions. It is also imperative that DOT fully considers the impact the proposed rulemaking to international long haul airlines and passengers, and avoid over-prescriptive rules that would deny airlines the incentive to innovate service standards in accordance with customer needs AAPA appreciates the opportunity to submit comments to the current rulemaking and looks forward to further dialogue with the Department on this issue. Respectfully submitted by Beatrice Lim Director-Industry & Regulatory Affairs ASSOCIATION OF ASIA PACIFIC AIRLINES