UPDATE: US DOT To Start Fining US Airlines For Tarmac Delays

The U.S. government on Monday issued tough financial penalties for airlines that "strand" passengers on the ground in a move likely to provoke an outcry from the industry.

The new rules released by the U.S. Transportation Department would prohibit airlines from leaving passengers stuck on a runway for more than three hours and require that passengers be provided snacks and water during such delays.

Airlines would be fined $27,500 per passenger for violations, far higher than any penalty so far imposed, and a move that could wipe out industry earnings. Currently, the Transportation Department issues fines for tarmac delays on case-by-case basis.

The new rules, which would apply only to domestic flights and would take effect within 120 days, would be more severe than those proposed in legislation introduced earlier this year in Congress, administration officials said.

The new fines could amount to millions of dollars per delayed aircraft, a massive increase from what the DOT called "unprecedented fines" it levied in November for one of the most high-profile "stranding" cases.

After a Continental Express flight sat on the tarmac at Rochester, Minn., for six hours last summer, the agency fined Continental Airlines Inc. (CAL) and its regional airline partner, Express Jet Holdings (XJT).

The DOT also fined Mesaba Airlines $75,000 for its role in ground handling at the airport.

Transportation Secretary Ray LaHood said Monday morning that the administration wants to send the message that it is toughening up on consumer abuses after a series of high-profile delays in recent years.

"We think it's the strongest message we can send, particularly at this time of the year, for passengers," LaHood said during a news conference. "Passengers have rights and they shouldn't get stuck on airplanes in a way that just doesn't reflect the kind of service they're paying for."

LaHood said the new rules would allow for exemptions in instances in which pilots and air-traffic controllers determined tarmac delays were necessary for security or safety reasons.

Transportation Department officials said that, in recent years, an average of 1,500 domestic flights annually have experienced delays of more than three hours, affecting some 114,000 passengers annually.

Airlines have fought congressional efforts to set a limit on tarmac delays, arguing that forcing airlines to "de-plane" passengers after three hours would lead to more delays throughout the system.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@dowjones.com

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