The Department of Transportation has scrapped a proposed rule that would have forced airlines to reimburse passengers up to $775 for controllable flight delays.
The Department of Transportation (DOT) is officially withdrawing a rule that would have required airlines to provide passengers with cash compensation for expenses during flight delays.
The rule, proposed by the DOT during the Biden Administration, would have guaranteed that airlines reimburse passengers for expenses if their flights were delayed more than three hours, and the reason for the delay was within the airline’s control, such as staffing or maintenance. The rule capped an airline’s responsibility for such payments at $775.
In a document filed in the Federal Register on Friday, the DOT cited the Executive Order “Unleashing Prosperity Through Deregulation”, saying that the requirement to compensate passengers for flight delays had not been authorized by Congress, and that the Biden DOT thus lacked the authority to implement the rule.
The DOT also noted they had solicited public comment on the rule, and airlines and the trade association that lobbies for them unanimously submitted comments in opposition. Each reasoned that the rule would ultimately increase airline costs that they would have to in turn pass on to consumers in the form of higher airfares. Airlines further reasoned that many of them already included pledges to compensate passengers for delays within their control, which the industry terms “controllable delays.”
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Consumer advocacy groups argued that the cost increases to passengers resulting from the rule would be minimal, and that airlines’ own guarantees to compensate passengers in the event of controllable delays were insufficient because, without government oversight, the airlines would be free to amend or rescind the rules without notifying customers in advance. Disability rights advocacy groups also supported the rules, saying that many of the provisions also required airlines to ensure that rebookings during flight delays would have the same accessibility requirements as the flight they’d originally booked.
A spokeswomen for Airlines4America (A4A), the trade association for US air carriers, told The New York Times that most airlines do compensate their passengers already: “A4A carriers provide automatic refunds for significant delays and cancellations if a passenger chooses not to be rebooked, and they have competitive policies regarding reimbursements for food, transportation and lodging for cancellations and significant delays within a carrier’s control.”
The DOT ultimately agreed with those in opposition, saying that less regulation would “allow airlines to compete on the services and compensation that they provide to passengers rather than imposing new minimum requirements for these services and compensation through regulation,” and that a separate final rule issued by the DOT included protections for passengers with disabilities during the rebooking process for delayed or cancelled flights.
Other jurisdictions, including the European Union, Canada, and the United Kingdom, require airlines to compensate passengers for controllable delays and reimburse reasonable expenses. In the European Union, such laws have been on the books for two decades, and apply to all EU-certificated air carriers and flights by airlines from any country for itineraries that begin in an EU country on a single ticket. In the 20 years since the rule took effect, European courts have largely interpreted the rule broadly in regards to the type of situations where airlines must compensate passengers.
In the United States, airlines may choose to issue travel credits or reimburse passengers for expenses, but many of them may limit payments to passengers with frequent flier memberships, or whose flights are delayed for long periods without the ability to rebook. Airlines are also free to unilaterally change the terms of those internal rules. For example, many carriers whose policies once allowed them to rebook passengers on other airlines in the event of flight delays or cancellations will now only do so if the alternative flight delays a passenger more than a calendar day.
Airlines are also more likely to offer policy flexibility to elite members in their frequent flier programs, but absent a government regulation, they wouldn’t be required to extend those same courtesies to all the passengers inconvenienced on a particular flight.
