Posted by Lending Club :: May 20, 2008 @ 6:35 am

The US Department of Transportation has begun new initiatives aimed at reducing the delays endured by airline passengers. Those who are delayed will also be compensated in higher amounts.

Many of the delays in domestic air travel are ultimately caused by delays in the New York airports. Even if your delayed flight is from Atlanta to Dallas, the delay may have been caused by a late arrival into Atlanta by a plane from a New York airport. For those reasons, many of the new initiatives are geared towards improving delays in New York. The plans include rerouting planes through Canadian air space to avoid summer storms, opening a second westbound route for aircraft, and auctioning some existing airline slots at LaGuardia Airport.

Also announced was the fact that travelers who are bumped onto a flight that will get them to their destination two hours after their original arrival time will be paid the full price of their fare up to $800. This new rule will go into effect this month. This rule will affect planes that carry at least 30 passengers, which is also an improvement over the previous rule that only covered planes carrying 60 or more passengers. Different compensation limits will apply for international flights as well as bumped passengers who arrive less than two hours late.

Airline industry groups counter that these new rules will raise ticket prices as airlines pass the burden onto consumers. Carriers may be less likely to make an investment in expanding service at certain airports that are notorious for delays. These two factors may make people less likely to travel, but the potentially reduced passenger count may also reduce delays and could lower prices.

The effect of getting bumped from a flight and arriving later than planned is hard to quantify. Some people will simply lose some of their time, while others may miss a once in a lifetime event. While each of those situations has different monetary values, the new rules should make them less likely to occur and offer better compensation when and if they do occur. Either way, it’s worth it to consider person-to-person lending as an alternative to credit cards when financing your personal travel.