Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The Trump administration announced Friday it is formally withdrawing a plan initiated by the Biden administration that would have required airlines to provide cash compensation to passengers for flight disruptions caused by carriers. The decision reverses a proposal aimed at mandating payments for significant delays and cancellations within the United States.
The original proposal, put forth by the U.S. Transportation Department (USDOT) under President Joe Biden in December 2024, sought public comment on rules that would require airlines to pay between $200 and $300 for domestic delays of at least three hours. Longer delays could have resulted in compensation of up to $775.
In explaining its decision, the USDOT stated that the proposed rules would impose “unnecessary regulatory burdens” on airlines. The department further argued that the withdrawal 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, which would impose significant costs on airlines.”
The move drew criticism from a group of 18 Democratic senators, who last month urged the Trump administration not to abandon the compensation plan. Senators Richard Blumenthal, Maria Cantwell, and Ed Markey, among others, signed a letter calling the proposal “common-sense” and arguing that airlines should remedy situations when their mistakes impose unanticipated costs on families.
Currently, U.S. airlines are mandated to refund passengers for canceled flights but are not required to offer cash compensation for delays. This contrasts with regulations in the European Union, Canada, Brazil, and Britain, all of which have established rules for airline delay compensation. No major U.S. airline presently guarantees cash compensation for significant flight disruptions.
Broader Regulatory Changes
The withdrawal of the compensation plan is part of a broader effort by the Trump administration to reduce regulatory burdens on the airline industry. In September, the USDOT also indicated it was considering rescinding Biden-era regulations that required airlines and ticket agents to disclose service fees alongside airfares.
The department further plans to revise existing rules by detailing a new definition of a flight cancellation that entitles consumers to ticket refunds. Additionally, the administration intends to revisit regulations concerning ticket pricing and advertising, actions that have been praised by airline industry groups.
The Trump administration’s decision underscores a differing philosophical approach to airline regulation, prioritizing industry competition and reduced costs over mandated consumer compensation for flight delays. This contrasts with the previous administration’s push for stronger passenger protections through direct financial remedies.
