In December 2024, the US Division of Transportation (DOT) proposed a regulation whereby airways could be required to pay passengers money compensation within the occasion that flights are delayed or canceled, simply as we see within the European Union and United Kingdom.
Given how late within the Biden administration this was proposed, it couldn’t truly be made legislation earlier than the management change, as there was first a public commenting interval, which put us into the Trump administration. A few months in the past, the Trump administration made it clear that it didn’t plan to maneuver ahead with this proposal, and that has now been finalized. I don’t suppose this end result ought to come as a lot of a shock.
Biden’s proposal for as much as $775 flight delay compensation
For some background, in December 2024, the DOT underneath the Biden administration introduced its plan to guard passengers who’re stranded by airline disruptions.
This concerned airways being required to pay passengers money compensation, rebook them without spending a dime on the subsequent out there flight, and canopy meals, in a single day lodging, and associated transportation bills, when a disruption is airline induced, reminiscent of a mechanical difficulty or an IT airline system breakdown.
Right here’s how former Transportation Secretary Pete Buttigieg described this:
“People know the significance of a strong airline business, which is why this nation—and U.S. taxpayers — saved U.S. airways afloat when the COVID pandemic threatened their very existence. Now that we’re on the opposite facet of the pandemic and air journey is breaking information, we should proceed to advance passenger protections. This motion we’re saying is one other step ahead into a greater period for business air journey—the place the flying public is best protected and passengers aren’t anticipated to bear the price of disruptions attributable to airways.”
At the moment, airline passengers face many challenges in holding airways to their guarantees, as a result of there’s no authorized obligation for airways to inform passengers when they’re entitled to providers promised within the customer support plan, and their insurance policies are typically obscure on the main points of supply.
Passengers should additionally usually request these providers on the airport in individual, and frontline workers might not know if a flight disruption is attributable to the airline, or might not have sufficient vouchers to supply upfront providers to everybody. Airways typically don’t clearly disclose when, what, and the way a lot they may reimburse passengers who pay out of pocket.
So the DOT’s rulemaking was geared toward addressing these gaps, and establishing baseline requirements on what airways are obligated to ship to stranded passengers throughout disruptions. This might apply particularly to delays and cancelations which might be due (in entire or partially) to any circumstance inside the management of the airline.
For one, airways would want to pay money compensation to passengers when a visit is disrupted. The DOT thought-about a tiered strategy. For instance, for home flights, compensation may very well be $200-300 for delays of three to 6 hours, $375-525 for delays of six to 9 hours, and $750-775 for delays of 9 or extra hours.
The DOT was additionally contemplating whether or not smaller airways ought to pay lower than bigger airways, and whether or not or not compensation ought to be required if a passenger is notified per week or two prematurely of a cancelation or important delay.
The DOT was additionally planning on requiring airways to supply meals, in a single day lodging, and transportation to and from the airport, for stranded passengers, and defining very clearly what would must be included as a part of every service.
This might additionally embrace requiring airways to robotically pay a minimal reimbursement for every service an affected passenger is entitled to obtain when airways don’t present these providers upfront, and passengers don’t submit receipts for prices, as much as a most reimbursement threshold per service.
Lastly, the DOT was contemplating requiring airways to rebook passengers on the subsequent out there flight on any service that the airline has a business settlement with, within the occasion of delays or cancelations.
The Trump administration has dropped this proposal
In January 2025, we transitioned from the Biden administration to the Trump administration, and that additionally meant main adjustments on the DOT, as Sean Duffy took over as Transportation Secretary. Not surprisingly, the DOT underneath Duffy has formally dropped this proposed new regulation, describing the proposal as “pointless regulatory burdens.” Airline executives have been vehemently against this, and I assume they received out over customers.
So at the least underneath the present administration, money compensation for delayed flights is off the desk. I don’t suppose that’s a shock. However understand that this is able to’ve gone means past that, even protecting issues as primary as requiring airways to rebook you on one other airline if there’s a meltdown.
If something, I simply hope we don’t see present laws reduce. We all know that US airways are lobbying to chop client protections, and are requesting to more and more self-police, to “unleash American prosperity and the brand new ‘golden age’ of air journey in America.” Nothing says “golden age of air journey” fairly like being stranded in Atlanta for per week the subsequent time a service’s operation falls aside!
My tackle stronger protections for customers
As you’d anticipate, airline executives universally got here out in opposition to this, arguing that this is able to increase the price of flights, and be dangerous for the touring public. I strongly disagree with that, and airways within the US have gone far too lengthy with minimal obligations to their clients, and a very one-sided contract of carriage.
Simply have a look at aviation in Europe, the place comparable laws are in place. Can anybody level to how airfare has elevated on account of these obligations? Fairly on the contrary, a bunch of extremely low value carriers function there fairly efficiently, and have very low ticket costs.
Research have even proven that these laws have induced a lower in avoidable delays, each when it comes to the variety of delays, and the size of every delay. A part of the hope is that airways would put extra effort into minimizing disruptions, which might come within the type of not having an excessively aggressive flight schedule, resulting in conditions the place there aren’t sufficient workers and plane to function flights.
At the moment airways have a robust incentive to create finest case state of affairs schedules, and never plan for worst case state of affairs outcomes. In any case, their obligations to passengers when issues go fallacious are minimal. They need to get as a lot income as they’ll upfront, with restricted draw back to them.
Moreover, this is able to encourage airways to barter correct contracts with workers. For instance, keep in mind a number of years again when American mechanics have been (unofficially) delaying flights whereas contract negotiations have been ongoing? Stuff like that may out of the blue change into way more expensive for airways.
Even past the money compensation, I’m an enormous fan of the idea of airways having to rebook clients on different airways within the case of considerable delays. It’s ridiculous how proper now in case you’re on a flight that’s canceled final minute attributable to one thing inside a service’s management, they could very properly let you know that their subsequent out there flight is in a few days, and your choices are to both settle for that, or to take a refund.
Like every of those schemes, the one problem would’ve been holding airways accountable as to what’s a controllable delay and what isn’t. Airways like to blame climate and air visitors management for nearly the whole lot. Clearly a key a part of any laws is how customers would have the ability to decide what the reason for a delay is.
Backside line
The DOT underneath the Biden administration had proposed new laws that may maintain airways accountable for delays inside their management. Within the occasion of great disruptions, this is able to have included money compensation, the requirement to e book vacationers on different airways, and clear tips on reimbursement for bills which might be incurred.
As you’d anticipate, airline executives have been strongly against this. We had cause to imagine that the Trump administration wouldn’t transfer ahead with this proposal, and the proposal has now formally been scrapped.
I’m unhappy we received’t see these laws go into impact. The worth in laws like these isn’t simply the compensation as such, however as an alternative, the motivation it provides airways to function reliably and never reduce corners. Airline contracts of carriage are actually one-sided, and this is able to’ve been useful for customers.
What do you make of this proposed rulemaking being shot down?
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