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Passengers who get bumped off overbooked flights will soon be eligible to receive twice as much compensation from U.S. airlines.




Travelers forced onto another flight that takes them to their domestic destination more than two hours after their original arrival time will be paid the full price of their fare up to $800, under a new Transportation Department rule that goes into effect next month.




The agency also announced several initiatives Wednesday intended to decrease air travel delays that stem from congested New York-area airports. The plans include:




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Reroute planes through Canadian air space to avoid summer storms.




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Open a second westbound route for aircraft.




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Auction some existing airline slots at LaGuardia Airport.




While meant to provide some financial relief to passengers, the rule could wind up raising fares. Groups representing both large and regional carriers blanched at the decision and said their members may have no choice but to bump up ticket prices and end service to smaller cities.




If bumped passengers arrive less than two hours after their original arrival time, the new compensation limit for domestic flights is $400, according to the new rule. The arrival time limit is four hours for international flights, and the amount of the payments are in addition to the value of the passenger's ticket, which can be used for alternate transportation or be refunded if unused.




The new bumped fliers rule also applies to more planes, covering most aircraft that carry more than 30 passengers instead of 60.




"It's hard to compensate for a missed family occasion or business opportunity, but this rule will ensure flyers are more fairly reimbursed for their inconvenience," Transportation Secretary Mary Peters said in a statement.




The previous $200 and $400 limits had not been raised since 1978.




Regional planes are now included because the number of flights using aircraft with between 31 and 60 seats increased by 13.5 percent between 2002 and 2006, according to government data.




More than 31 percent of commercial flights in the U.S. arrived late, were canceled or diverted in February, according to government data released earlier this month, and last year's on-time arrival results were the second worst in history. Part of the reason is that airlines are replacing big planes with smaller ones in an effort to fly with fewer empty seats.




The Air Transport Association, which represents the nation's largest carriers, and the Regional Airline Association both submitted comments opposing parts of the new rule.




"This administration ... is tone deaf to the incredible challenges this industry is going through right now," including record fuel prices and the fact that four small carriers have sought bankruptcy protection in recent weeks amid a recession, said Roger Cohen, president of the Regional Airline Association. "This is not the time to be monkeying around with experiments."




The new bumped-passenger fees will make it harder for airlines to justify serving small- and medium-sized communities based on their remote locations, airport facilities and other factors. "They're making it harder, not easier, for people to travel," Cohen said.




The government plan to auction slots at LaGuardia also drew heated rebukes. Sen. Charles Schumer, D-N.Y., called it "misguided" and said selling slots "to the highest bidder won't make your plane take off faster, it will just cost New Yorkers more to fly and throw LaGuardia Airport into chaos."




The Port Authority of New York and New Jersey, which runs John F. Kennedy International Airport, LaGuardia and New Jersey's Newark Liberty, lauded the opening of new air traffic lanes but echoed Schumer's sentiments on flight caps.




"Instead of modernizing a 1950s-era air traffic control system to meet passenger demand for more flights, the (government is) choosing to charge passengers more money via an auction without reducing delays and delivering relief," according to a Port Authority statement. Its solution is more capacity, smarter scheduling and better customer service.




In 2007, the three New York-area airports had the lowest on-time arrival rates, and aviation officials say delays there cascade throughout the system and cause 75 percent of all delays.




Flight caps also are being installed at JFK and Newark, while LaGuardia has been capped since 1968. Peters announced two proposals that would require some flights currently operated there to auctioned over the next five years.




Under the first option, all carriers would be given up to 20 slots daily for the 10-year life of the rule. Over the next five years, 8 percent of the additional slots currently used would be made available through an auction and the remaining 2 percent would be retired. Proceeds would be invested in congestion reduction and capacity improvement initiatives in the New York region.




The second plan also gives airlines permanent access to up to 20 slots a day for 10 years, but would have 20 percent of the current slots auctioned off and the carriers would retain the proceeds.




A DOT spokesman said the government will choose an option by the end of the year by assessing the comments received and evaluating what will best serve travelers.




"While the status quo at LaGuardia has led to stagnant service, delays and unnecessarily high fares, open access and competition will help give flyers more choices, fewer delays and lower fares," Peters said.