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Biden Administration Will Propose Rule Requiring Payouts for Delays, Cancellations

President Joe Biden and Transportation Secretary Pete Buttigieg on Monday unveiled their push for a new federal rule that would require airlines to compensate passengers when their own issues cause delays or cancellations – a first in the U.S.

If put into law, the new rule would force airlines to provide direct compensation to passengers when carriers cancel or significantly delay flights for reasons they can control, which doesn't include weather. It would also enshrine in law airlines' commitments to cover customers' additional costs like hotels, meals, and ground transportation during disruptions.

Airlines often dole out miles or vouchers as an apology and some offer to cover hotel costs when travelers get stuck overnight, but none of that is guaranteed in law. This would make it all mandatory, though Monday's announcement didn't spell out how much airlines would be required to pay passengers whose flights they delay or cancel.

“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” Buttigieg said in a statement about the proposed rule. “This rule would, for the first time in U.S. history, propose to require airlines to compensate passengers and cover expenses such as meals, hotels, and rebooking in cases where the airline has caused a cancellation or significant delay.”


Big questions surround the proposal. How will the department define a “controllable cancellation or delay” – and who decides when it's the airline's fault, a weather issue, or something else? How much will airlines be forced to pay and how will those payments be doled out? When will this change take place? Will it actually happen?

If it moves ahead, it would mark a major turning point in passenger rights in the U.S., where travelers have shockingly few protections even as airlines have canceled and delayed flights in record numbers.

While Europe has required compensation for lengthy disruption for decades and Canada adopted a similar measure recently, there's no legal requirement for U.S. airlines to pay travelers for these massive disruptions – or even to feed customers or put them up in a hotel when they get stranded overnight. Travelers are entitled to be placed on the next available flight (be it hours or days away) or request a refund and try to rebook their trip … but that's it.

In Europe, the so-called EU 261 regulations have held airlines accountable by guaranteeing compensation to passengers when they mess up. Payouts depend on the length of the flight and how long you're delayed, from 125 euros (about $138 USD) for an hour-long delay on a short flight within Europe to as much as 600 euros ($661 USD) if a long transatlantic flight gets canceled or delayed by four-plus hours.

“Airline passengers in Canada and the European Union for example already get these compensations and guess what? It works,” Biden said during a Monday afternoon address. “One study found that when the European Union required airlines to compensate passengers for flight delays, the number of delays went down.”

It's anyone's guess whether Biden and Buttigieg will mimic the European approach to compensation, but the timing of this new push is no coincidence. Last year was the worst year of cancellations on record, with 34% more flights canceled than in 2019 – the last full year of normal air travel when airlines flew significantly more than they did in 2022, according to Air Travel Consumer Report data.

Southwest's historic meltdown still looms large, but they're not alone. U.S. airlines big and small have canceled and delayed flights by the thousands again and again. From Delta'a struggles last summer and at present to Spirit Airlines in summer 2021 and every airline in between, almost every major carrier has had a major operational failure in the last two years.

Airline's own woes coming out the pandemic are only part of the problem, though. Short-staffed and inefficient air traffic control centers can also be a major contributor to delays and cancellations, but the Biden administration’s announcement on Monday didn't address those disruptions whatsoever.

An airplane that is flying in the air 

Putting additional protections in law is the Biden administration's latest – and largest – step to rein in the airlines.

Buttigieg's Department of Transportation has pushed airlines to dole out refunds faster, coaxed more carriers to promise they'll cover meals and hotels when passengers get stranded, and pressured several airlines to stop charging families fees to sit with their children. Last summer, the department unveiled a new customer service dashboard to publicly spell out each airline's policies.

Biden and Buttigieg announced Monday they've expanded that dashboard to include information on airlines that have promised to give passengers vouchers or frequent flyer miles for lengthy delays or cancellations. Just one carrier has committed to both: Alaska Airlines.

Advocacy organizations have been urging Buttigieg for years to act unilaterally and create some additional passenger protections through federal rulemaking, as past department heads have done with security measures after the Sept. 11 attacks or to counter lengthy tarmac delays. While it may be a safer bet than pushing a bill through Congress, it's still no slam dunk.

It's a long and arduous process, with plenty of avenues for airlines to publicly chime in and privately slow things down. Federal rules can take years to become law, meaning this latest effort could potentially be reversed if Biden loses re-election in 2024. Case in point: A 2020 proposal to raise enrollment fees for Global Entry (but make it free for minors) still has not been finalized.

Senior Editor Allie Johnson contributed to this report.

2 Responses

  • Let me translate. During checkout, AA and many offer trip insurance for $16-$25+. Now it will be a mandatory charge in the ticket price.

  • Does anyone in power understand how businesses operate? How do you think they will come up with the $$$ to do this?
    Answer: They will raise the price of tickets.
    The government needs to come up with a better way to accomplice the plan without the result being the consumer paying for it. We need some common sense in DC.

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