(MONEY Magazine) – It was your typical traveler's nightmare. Jeff Shane arrived at Washington, D.C.'s National Airport only to find his 9 a.m. flight canceled. As you might expect, Shane was upset. ''I was late and angry,'' he says, ''and I wanted to know what happened.'' There the similarity between Shane and your typical traveler I ends. He happens to be assistant secretary for policy and international affairs at the Department of Transportation (DOT), the federal agency that oversees airlines. So he knew exactly what to do: he called the airline's vice president for governmental affairs and demanded an explanation. A few days later, a detailed letter arrived listing the breakdowns that scuttled the flight. Score one for the travelers. But what if you are not assistant secretary for policy and international affairs? How do you get answers -- and moreover reach your destination cheaply and on time, especially during the holiday crunch? The best way is to know -- and stick up for -- your rights as a passenger. Some of your rights are spelled out in the contract governing your ticket purchase (see the table on page 116). Others, however, are based on arcane and often unwritten airline policy, leaving you at a disadvantage. As Marion Champlain, a former flight attendant who now owns Voyager Travel in Kent, Conn., puts it: ''The passenger is at the airline's mercy if he knows only what the gate agent tells him.'' To help you beat this system, we talked to travel agents, airline and airport officials, regulators, industry watchers and veteran fliers. Their advice is summarized in the pages to come.

If you think airline service could be better, you have company. In our Americans and Their Money Poll (error margin: plus or minus six points), 86% of the 250 MONEY subscribers we questioned said that service either didn't improve or actually got worse in the past three years. Some 46% got stuck on a flight that was more than two hours late during that time, 31% had a flight canceled, 43% lost a bag (though most got it back later), 35% suffered a damaged bag and 38% had trouble buying an advertised discount fare. Worse, there are reasons to think that you will be paying more for even poorer service in years to come. Air travel was a relative bargain in the 1980s, when, according to DOT figures, fares declined an inflation-adjusted 15% from 1984 to '88. But even before the Middle East crisis boosted ticket prices 10% between August and October, bargains were getting scarcer. A General Accounting Office study in July said ticket prices at 15 airports dominated by an airline or two -- such as Atlanta (Delta and Eastern), Denver (United and Continental) or Raleigh-Durham (American) -- ran 27% higher - than at more competitive airports. And, says Tom Parsons, editor of Best Fares magazine: ''Supersaver fares this year are 25% higher than last, even factoring out the oil price rise.'' Airlines counter that their industry is in trouble -- it will lose $1 billion on revenues of $70 billion this year -- and must raise fares to survive. That's why most carriers switched to the flexible demand-driven pricing system called yield management that results in 140,000 fare changes a day on all flights combined. But critics argue that passengers are being taken for a ride. ''Airlines run a shell game and the minute something comes up, they change the rules,'' says Joe Brancatelli, executive editor of Frequent Flyer magazine. The Justice Department is investigating whether the way that airlines signal price changes to one another almost instantaneously by computer constitutes price fixing, a charge the airlines deny. Whatever the case, the cost squeeze hurts service. ''Airlines are not going to have the money to add enhancements,'' says John Pincavage of the Transportation Group, a New York City firm that finances the purchase of commercial aircraft. ''They'll have to cut flights and people.'' That, in turn, could exacerbate labor-management disputes that catch passengers in the crossfire -- such as when a pilots' strike grounded Eastern last year (the airline is now back to two-thirds of pre-strike capacity and is trying to raise ridership by offering extras like a first-class seat for a coach fare). Meanwhile, other factors ensure that delays -- up 7.6% in the first eight months of this year alone, compared with '89 -- keep growing. The problem is congestion. There are 56% more flights today than there were in 1980 but no new major airports. The only one under construction, in Denver, won't open before 1995. And there are 19% fewer fully qualified air traffic controllers than in 1980, thanks largely to the government lockout after their 1981 strike. All these trends threaten the modest gains the industry made during the past two years, when airlines like Northwest and Continental tried hard to clean up their poor-service image. ''During the fare wars of the 1980s, airlines thought people cared only about price,'' says Helane Becker, airline analyst at Lehman Bros. ''But by 1987, consumers got tired of being treated like pieces of meat, and they rebelled.'' That was the year complaints to the DOT peaked at 44,845. They have dropped considerably since then (see the graph below), but there is still room for improvement -- as the most powerful frequent fliers, U.S. congressmen, are acutely aware. ''Passenger rights aren't explicit and the rules aren't uniformly applied,'' complains Rep. Dennis Eckart (D, Ohio). He and more than 100 other representatives are backing a bill that would boost awards for lost bags and cancellations. But chances it will pass this year are slim. In the meantime, you'll have to fend for yourself. Here are 38 tips. GET THE BEST FARE: 1. Establish a continuing relationship with an honest, competent travel agent. The agent's desire to get your repeat business may overcome the many industry incentives that could bias his judgment -- such as the cash and travel bonuses that airlines give to agents who bring them enough business. 2. Book in advance, and explain that you want the lowest fare. If your schedule is flexible, say so. Then emphasize the point; when quoted a price, for example, say, ''Is there anything cheaper if I leave sooner, later or on another day?'' 3. Consider discount travel agencies like Travel Avenue (800-333-3335) in Chicago, which rebates four-fifths of the standard 10% ticket commission. 4. If possible, deal with an agent who has a direct-access reservation system -- meaning his computer gets information on discounted seats directly from the airline. Otherwise, you may book a cheap fare today only to find tomorrow that it was sold out. If your agent lacks this service, ask him to verify your reservation by calling the airline. 5. To beat the yield-management lottery, seek out an agent who uses one of the new computer programs that automatically query and requery to find the lowest fare. Garber Travel Service, based in Brookline, Mass. (800-225-4570), uses a program that will check for better discounts at least three times a day until 24 hours before you depart. 6. Don't jump to buy a special low fare the first day it is advertised. Wait a day or two to see whether competing airlines come up with a better deal. But don't stall until the last days of the special either, or you might miss out. 7. Pay by credit card, so if you do get stiffed (say, your airline goes bankrupt), you can protest the charge and often get your money back. 8. After buying a nonrefundable ticket, watch your newspaper's business section for low-fare specials on the same airline. If you spot a better deal, call the airline and your travel agent. Sometimes, you can exchange your ticket. ^ 9. Check whether so-called nested round trips would save you money. For instance, the midweek round-trip coach fare from Atlanta to Phoenix was $1,034 in early October. But a discount fare purchased seven days in advance that included a Saturday night stay was only $217. So you could have bought two round trips (one starting in Atlanta, the other in Phoenix), used only half of each ticket, and saved $600. 10. If you are 62 or older, or are flying because of a family emergency, see the table on page 117 for discounts. AVOID DELAYS: 11. Don't take a flight that departs or arrives during airport rush hours, when runways and gates are most congested -- generally from about 7 a.m. to 9 a.m. and then from 4 p.m. to 7 p.m. 12. When choosing between equally convenient flights, ask the travel agent for the one with the highest on-time rating. (A ''9'' means it arrived within 15 minutes of schedule 90% of the time last month, ''8'' means 80%, and so on.) 13. Get a boarding pass and seat assignment from your travel agent. If both are unavailable, says Richard Nigosian of VTS Travel in New York City, the flight is probably overbooked. Take another flight or get to the gate an hour early. 14. Ask your travel agent for a list of the next three flights going your way. If you miss your plane or the flight is canceled, you'll at least know what airline to call. 15. Find out where your flight is coming from and don't book it if, for example, it is the last leg of an international flight, since those are often delayed. 16. Avoid booking the last flight out of a city, particularly as a connection. You could get stuck overnight. 17. When heading to larger cities, use less crowded airports like Midway in Chicago, W.P. Hobby in Houston, Orange County in Los Angeles or Oakland in the San Francisco Bay Area. DON'T BE A CHUMP IF BUMPED: 18. Even if you have a boarding pass, check in at the gate -- not the ticket desk -- at least 10 minutes before flight time or else you forfeit rights to bumping compensation. 19. Make sure you understand the restrictions on awards offered to induce you to leave a plane (the table on page 117 shows which airlines offer what). 20. If airline agents aren't finding volunteers, try negotiating a better deal -- such as an extra travel voucher. 21. If you are bumped against your will, federal law requires the airline to offer you cash or a check for the cost of your one-way fare up to a maximum of | $200 if it can't get you to your destination less than an hour late. For delays of two hours or more, you should receive twice the one-way fare, up to a cap of $400. 22. Don't expect to get paid for being bumped off a plane that carries fewer than 60 passengers or from an international flight originating overseas; the rules don't apply to them. Fortunately, bumping is rare: only 2% of the 434 million passengers last year were bumped, and only one in seven of them was evicted against his or her will. BEWARE OF BAGGAGE BLUNDERS: 23. Avoid checking luggage if you can. Pack light and carry it on. 24. If you must check bags, do so at least 30 minutes before flight time. Otherwise, if the bags arrive late, the airline won't pay to have them delivered. 25. Notwithstanding the advice above, don't check luggage more than 90 minutes before departure either, since it may get overlooked in a corner. 26. Never check valuables like jewelry or essentials like medicine. 27. Double-check the agent filling out your baggage tags. As one gate agent put it: ''PDX to Portland looks an awful lot like PHX to Phoenix.'' 28. If making a connection, stick with the same carrier if possible to minimize chances of a baggage mix-up. 29. If your luggage gets lost during a change of airline, the airline that carried you last is responsible for it -- regardless of which airline goofed. 30. If you are missing a bag while away from home, says Hoyte Decker of the DOT, ask the baggage supervisor for cash for necessary purchases. (Randy Petersen of Frequent magazine says he once got $583 to buy a suit for a TV appearance; a more typical award is $30 to $50.) If the supervisor refuses, buy what you need and save receipts. Seek a refund later by complaining (see below). 31. In case of loss or damage, keep your baggage claim tag or a photocopy; it's your only proof the bag was checked. 32. Produce original sales slips for lost items. But note: federal law requires only that you be reimbursed for their depreciated value up to $1,250 maximum, not for what it will cost to replace them. 33. If your loss exceeds $1,250, check whether you have secondary insurance, such as a personal-property rider on your homeowners policy, that could make up the difference. Another possibility: for $4.75 a trip, American Express cards offer $500 coverage against loss or damage to baggage, plus $200 coverage for replacing items you need if your bag is delayed six hours or more. COPE WITH CANCELLATIONS: 34. Call right before you leave for the airport to make sure that your flight has not been delayed or canceled. 35. If the cancellation or delay is the airline's fault -- because of mechanical or crew mishaps, not weather or air traffic problems -- and you have a discounted or nonrefundable ticket, ask the gate agent for a FIM (flight interruption manifest). If you manage to convince the gate agent your trip is urgent -- you are trying to make a connection, for instance, or a wedding -- he can ''FIM'' you to another carrier and you won't have to pay extra. 36. If you are delayed for more than four hours, ask for a voucher to cover the cost of a meal; if it's past 10 p.m. and you're away from home, ask for a hotel voucher too. Some airlines will give you these only if the cancellation is their fault (see the table on page 116). But many will award them for other delays too if you ask politely. COMPLAIN IF YOU GET STUCK: 37. Try to get the problem resolved at the airport, of course. But if that fails, get the names and identification numbers of all airline employees you have trouble with. Then write a letter to the airline's president, its office of consumer affairs and the Department of Transportation, Office of Consumer Affairs (400 Seventh St. S.W., Washington, D.C. 20590; 202-366-2220). State briefly what happened, what loss or damage you suffered and what compensation you expect, such as a travel voucher for $100 or a round-trip ticket. Above all, make your demand reasonable. ''Too often what the consumer really wants is to have the chairman of the board take this ramp agent out and shoot him,'' says Ed Perkins, editor of Consumer Reports Travel Letter. KEEP SMILING: 38. Let's face it: gate, baggage and ticket agents hear complaints all day. Your best strategy is to be savvy, scrupulously polite, even charming. There are very few things airline employees have to do to help you out of a jam, but a lot they can do if they want to. As one United agent put it: ''The louder someone screams, the less I do for them.''

CHART: NOT AVAILABLE CREDIT: SOURCE: DEPARTMENT OF TRANSPORTATION CAPTION: HOW AIRLINES ARE DOING... The chart shows complaints to the Department of Transportation about each major airline since January 1988. Gripes about Eastern shot up after a March 1989 pilots' strike. Piedmont dropped from the list when bought by USAir in August '89; Braniff went bankrupt that September.