In a significant move, major U.S. airlines have expressed strong opposition to a government review concerning passenger compensation for flight disruptions. The review, initiated by the Biden administration, seeks to evaluate whether airlines should financially compensate passengers, a requirement already in place in Europe and Canada.
Airlines for America, representing major carriers such as American Airlines, Delta Air Lines, and United Airlines, has formally urged the Trump administration to terminate the review. In December, the U.S. Department of Transportation (USDOT) called for comments on whether U.S. airlines should compensate passengers for disruptions, an existing practice in the European and Canadian aviation sectors.
The trade group argues that additional financial incentives are unnecessary to ensure quality service. They assert that USDOT lacks the authority to enforce such a mandate, which would significantly increase operational costs and consequently raise ticket prices.
The International Air Transport Association, a global airline body, supports this stance, warning that mandatory compensation schemes have become costly for airlines, transferring wealth without effectively reducing service disruptions. Spirit Airlines also voiced concerns, suggesting the proposal could pressure carriers into making unsafe flight decisions when delays or cancellations might be preferable.
USDOT’s proposal includes compensating passengers with amounts ranging from $200 to $775, depending on the delay duration. Former Transportation Secretary Pete Buttigieg previously remarked that such compensation could incentivize airlines to minimize delays.
President Biden has pledged to establish rules for compensating passengers by mid-2023. Currently, airlines are required only to refund tickets for canceled flights but not for delays. However, many airlines have voluntarily committed to covering costs like meals and accommodations during severe disruptions.
Recently, a U.S. court obstructed a separate Biden administration effort mandating upfront disclosure of airline service fees, citing procedural shortcomings by USDOT.
As the debate over passenger compensation continues, airlines are pushing back against regulatory changes they deem potentially detrimental to their operations and pricing structures. The outcome of this review could lead to significant shifts in how flight disruptions are managed in the U.S.
