Caribbean Airlines fined US$60,000 by US Transportation Department
PORT OF SPAIN, Trinidad and Tobago, Thursday November 3, 2011 — According to the consent order issued last week by the United States Department of Transportation, Caribbean Airlines agreed to pay the US$60 000 fine levelled against it by the transport authority for limiting compensation that passengers received after their baggage was delayed, lost or damaged, in order to avoid going to court.
According to the October 28 consent order, Caribbean Airlines neither admitted nor denied the violations, but opted to settle out of court given the potential civil penalties it case for the alleged violations.
“This compromise assessment is appropriate considering the nature and extent of the violations described herein and serves the public interest. It represents a strong deterrent against future noncompliance with the Montreal Convention by CAL, as well as by other air carriers and foreign air carriers” stated Rosalind Knapp, the US department’s deputy general counsel in the consent order.
Caribbean Airlines now has to pay the US$60 000 in two equal instalments – the first half within 30 days of the consent order and the second half within a year, unless it violates the provisions of the order, in which case the payment would be due immediately. If Caribbean Airlines fails to wire the funds to the Federal Reserve as agreed, the Department of Transportation said that it would institute proceedings against the airline under the US Debt Collection Act.
As set out in the order, the US Department of Transportation imposed the fine after it found that the Trinidad-based carrier was reimbursing consumers with less than they were entitled to under an international treaty.
"Both domestic and international travellers have a right to be fairly compensated for lost, delayed and damaged baggage," US Transportation Secretary Ray LaHood said. "Consumers have the right to be treated fairly when they fly, and we will continue to take enforcement action when their rights are violated," said the DOT.
Under the Montreal Convention, an international agreement that sets liability limits for international air transportation, airlines are liable for damage caused by delayed baggage up to a limit that is the equivalent of just under US$1,800, unless the carrier has taken all reasonable measures to prevent the damage or it was impossible to take these measures.
According to the organisation, the Convention requires carriers to compensate passengers for loss, damage or delay of baggage on international flights in most cases. It also forbids carriers from setting a lower baggage compensation limit for international flights or from refusing to accept liability for the loss of any types of baggage, such as jewellery, electronics, or other high-value items.
While Trinidad and Tobago is not a signatory to this convention, because the United States is, the provisions of the convention thus apply to destinations receiving round-trip air transport from the US.
According to the consent order, in its defence Caribbean Airlines said that given that Trinidad and Tobago was not a signatory to the Montreal Convention, it had been operating under the provisions of the previous Warsaw Convention regime, which would have made the claims limitations permissible. However, the airline stated that it was committed to complying with the department’s consumer protection requirements and was taking immediate steps to ensure that its liability for passengers’ baggage to and from the US was explained and applied properly.
It was a review of the Caribbean Airline websites last spring by the Department's Aviation Enforcement Office that led to an investigation of the carrier's baggage-liability policies, revealing numerous violations of the Convention between March 1, 2010 and April 30, 2011.
The US authorities stated that the carrier routinely told passengers that it was not liable for the loss of irreplaceable or high-value items such as electronics, jewellery, cameras or cash; and the carrier's website also stated that it would not compensate passengers for the loss of these items. Accordingly, in a number of cases, passengers found that some of these expensive items had been removed from carry-on bags they were required to check in after boarding because of cabin space limitations.
In addition, the Department of Transport said Caribbean Airlines violated the Convention by regularly refusing to pay claims for damaged baggage and by limiting payments for buying necessities due to delayed bags to US$25-$75 per day. Caribbean Airlines also frequently required passengers to file a report on their missing property before leaving the airport terminal, which unreasonably limited the time they had to discover that items were missing from their baggage.