While we’ll see if anything comes of this, the United States Department of Transportation (DOT) has just opened a commenting period for proposed rulemaking, whereby airlines would be required to pay passengers cash compensation in the event that flights are delayed or canceled, just as we see in the European Union.
In this post:
Biden Administration proposes flight delay compensation
The DOT has today announced its plan to protect passengers who are stranded by airline disruptions, with the 60-day public commenting period having just started.
This involves airlines being required to pay passengers cash compensation, rebook them for free on the next available flight, and cover meals, overnight lodging, and related transportation expenses, when a disruption is airline caused, such as a mechanical issue or an IT airline system breakdown.
Here’s how Transportation Secretary Pete Buttigieg describes this:
“Americans know the importance of a robust airline industry, which is why this country—and U.S. taxpayers — kept U.S. airlines afloat when the COVID pandemic threatened their very existence. Now that we are on the other side of the pandemic and air travel is breaking records, we must continue to advance passenger protections. This action we’re announcing is another step forward into a better era for commercial air travel—where the flying public is better protected and passengers aren’t expected to bear the cost of disruptions caused by airlines.”
Currently airline passengers face many challenges in holding airlines to their promises, because there’s no legal obligation for airlines to notify passengers when they are entitled to services promised in the customer service plan, and their policies are generally vague on the details of delivery.
Passengers must also typically request these services at the airport in person, and frontline staff may not know if a flight disruption is caused by the airline, or may not have enough vouchers to provide upfront services to everyone. Airlines generally do not clearly disclose when, what, and how much they will reimburse passengers who pay out of pocket.
So the DOT’s rulemaking is aimed at addressing these gaps, and establishing baseline standards on what airlines are obligated to delivery to stranded passengers during disruptions. This would apply specifically to delays and cancelations that are due (in whole or in part) to any circumstance within the control of the airline.
For one, airlines would need to pay cash compensation to passengers when a trip is disrupted. The DOT is considering a tiered approach. For example, for domestic flights, compensation could be $200-300 for delays of three to six hours, $375-525 for delays of six to nine hours, and $750-775 for delays of nine or more hours.
The DOT is considering whether smaller airlines should pay less than lager airlines, and whether or not compensation should be required if a passenger is notified a week or two in advance of a cancelation or significant delay.
The DOT is also considering requiring airlines to provide meals, overnight lodging, and transportation to and from the airport, for stranded passengers, and defining very clearly what would need to be included as part of each service.
This could also include requiring airlines to automatically pay a minimum reimbursement for each service an affected passenger is entitled to receive when airlines do not provide these services upfront, and passengers do not submit receipts for costs, up to a maximum reimbursement threshold per service.
Lastly, the DOT could require airlines to rebook passengers on the next available flight on any carrier that the airline has a commercial agreement with, in the event of delays or cancelations.
Will the Trump Administration move forward with this?
By the time the commenting period is over for the proposed rulemaking, the Trump Administration will be in power, so it’ll be up to them to decide whether to move forward with this. Trump has nominated Sean Duffy as the Transportation Secretary, though it remains to be seen if he gets confirmed.
I won’t get too political here, so we’ll see how this plays out. Obviously politics is more polarizing than ever before, but there’s no denying that the DOT has been very active under the Biden Administration, in terms of proposing new consumer protections. We’ll see if that continues under Trump.
My take on this proposed rulemaking
We’re no doubt going to soon hear airline executives come out strongly against this, arguing that this is going to raise the cost of flights, and will be bad news for the traveling public. I strongly disagree with that, and airlines in the US have gone far too long with minimal obligations to their customers, and a completely one-sided contract of carriage.
Just look at aviation in Europe, where similar regulations are in place. Can anyone point to how airfare has increased as a result of these obligations? Quite to the contrary, a bunch of ultra low cost carriers operate there quite successfully, and have very low ticket prices. Studies have even shown that these regulations have caused a decrease in avoidable delays, both in terms of the number of delays, and the length of each delay.
Part of the hope is that airlines would put more effort into minimizing disruptions, which could come in the form of not having an overly aggressive flight schedule, leading to situations where there aren’t enough staff and aircraft to operate flights.
Currently airlines have a strong incentive to create best case scenario schedules, and not plan for worst case scenario outcomes. After all, their obligations to passengers when things go wrong are minimal. They want to get as much revenue as they can upfront, with limited downside to them.
Furthermore, this would encourage airlines to negotiate proper contracts with employees. For example, remember several years back when American mechanics were (unofficially) delaying flights while contract negotiations were ongoing? Stuff like that would suddenly become much more costly for airlines.
Even beyond the cash compensation, I’m a huge fan of the concept of airlines having to rebook customers on other airlines in the case of substantial delays. It’s ridiculous how right now if you’re on a flight that’s canceled last minute due to something within a carrier’s control, they may very well tell you that their next available flight is in a couple of days, and your options are to either accept that, or to take a refund.
Like any of these schemes, the one challenge will be holding airlines accountable as to what’s a controllable delay and what isn’t. Airlines love to blame weather for just about everything. Obviously a key part of any legislation would be how consumers would be able to determine what the cause of a delay is.
Bottom line
The DOT has proposed new regulations that would hold airlines accountable for delays within their control. In the event of significant disruptions, this would include cash compensation, the requirement to book travelers on other airlines, and clear guidelines on reimbursement for expenses that are incurred.
Airline executives (and some others) will come out against this, but I’d argue that this is absolutely positive for consumers, and I hope it happens. That being said, I wouldn’t count on it, given that it was proposed by one administration, and it’ll be up to another administration to do something with this.
What do you make of this proposal from the DOT?
You say, "The DOT is considering whether smaller airlines should pay less than lager airlines"
You mean "larger".
What if a delay or cancel flight cause by the gov. such as ATC? will the Gov has to pay as well?
All I can say is that I would up filing so many travel insurance claims this past summer due to delays/cancellations (I piled up approximately five cancelled/overnight-delayed flights in the space of three weeks at one point) that my bank mistook my travel insurance direct deposits for a regular paycheck and sent me a message to make sure a payment hadn't gone astray when the payments came to an end.
About time US customer's got some protections. Flight delays aren't the same as other customer service breakdowns... they can often leave people stranded or out hundreds of dollars when they are forced to cancel or change existing plans (such as hotel reservations or prepaid car rentals) or incur additional costs due to the airline's screw-up. It's time to level the playing field, and as mentioned, we see these types of consumer protections working well elsewhere...
About time US customer's got some protections. Flight delays aren't the same as other customer service breakdowns... they can often leave people stranded or out hundreds of dollars when they are forced to cancel or change existing plans (such as hotel reservations or prepaid car rentals) or incur additional costs due to the airline's screw-up. It's time to level the playing field, and as mentioned, we see these types of consumer protections working well elsewhere in the world.
We've let the airlines become an oligopoly... it's time to pare back some of the benefits we've allowed them to enjoy as a result.
Some of these comments are so weird.
So a federal agency implementing rules to protect the flying public is seen as a bad thing. Wow... just wow...
Even if implemented, airlines will pay nearly zero in compensation. Look at Canada where similar regulations were implemented in a totally neutered form, giving airlines an out to never pay compensation, because every delay is either outside airline control, or within airline control but required for safety - no compensation due.
Precisely zero chance that the Trump DoT will go forward with this.
Thank Gawd the new administration will undo this horror! They will make *us* pay airlines for inconveniencing them. We bow before our corporate overlords.
Chevron was overturned. Agencies, without explicit legal guidance, will be challenged each time they come up with these schemes. If Congress would like these penalties then they will pass legislation that establishes them.
The most premium airline should be charged the most for having premium delays as well, maybe once DL profits drop the retarded stupid idiot Tim Dunn will finally stfu
DL is premium BECAUSE it runs a much more reliable operation.
Even with the CrowdStrike meltdown in July, DL's operation handedly runs circles around its competitors.
WN has done very well with low cancellations this year but still has just average on-time.
DL's on-time rate is like 2% higher, which makes absolutely no difference to anyone who doesn't travel weekly.
DL is not a premium airline. No US airlines are.
I think a key question will be, under what law or authority does the DOT have to impose these kinds of fines? Because I expect that under the new administration (and the legal standing to challenge the source of such fines) the airlines will rightly raise the question, "who gave you the authority to create a new penalty for compensating customers in the event of delays or cancellations?"
Of course the airline C Suiters will complain. Maybe if they focused more on delivering better flying experiences, this wouldn't need to happen.
I was just returning from Asia and at JFK had a domestic connection that got delayed by 3.5hrs, super exhausted, I called the delta diamond desk and they offered me a Two thousands five hundreds Premium miles as a compensation.
For someone who hardly get things done in 4 years, he seems to be quite active in his last few months dropping time bombs for 47.
Someone who hardly got things done...? You must have been living under a rock. This continuing willful ignorance from some of you is so bizarre.
...living under "an IGLOO".
FTFY
A great thing an airline can do is to endorse the ticket to another airline so a passenger can fly on another airline. Higher level frequent flyers tend to get that but there isn't enough space for every passenger to receive that treatment.
I just sometimes wonder what's really wrong with the US carriers.
Yes, this is some kind of a silly question that twelve year olds would ask, but after finding some facts out I can't help but question the reason.
The US carriers receives some crazy amount of subsidies from the US and even some of foreign governments. If other carriers perform better with that much of a cash injection, then why not the...
I just sometimes wonder what's really wrong with the US carriers.
Yes, this is some kind of a silly question that twelve year olds would ask, but after finding some facts out I can't help but question the reason.
The US carriers receives some crazy amount of subsidies from the US and even some of foreign governments. If other carriers perform better with that much of a cash injection, then why not the US carriers? I could think of some reasons, but even with that this still doesn't make a lot of senses.
How much cash do you think has been injected, relative to losses? It's not like they have a giant vat of money to swim through. Yes they got more money than most other carriers, but they're also far larger than most other carriers. It more or less balanced out.
You seem to be forgetting stock buybacks. All that big profits can be better utilized on their planes, staff, catering, and other services m. But no, we’ll buyback our stocks.
I agree that this is unlikely to progress to implementation. But on the off chance it does, please make the rules and reimbursement process simple and clearcut. The airlines should have little latitude in adjudicating what is under their control and what is not, and what constitutes a weather delay. For example, I do not think that a weather delay affecting a crew member deadheading to work from home is a valid reason to call...
I agree that this is unlikely to progress to implementation. But on the off chance it does, please make the rules and reimbursement process simple and clearcut. The airlines should have little latitude in adjudicating what is under their control and what is not, and what constitutes a weather delay. For example, I do not think that a weather delay affecting a crew member deadheading to work from home is a valid reason to call the delay of their first on-duty flight weather-delayed, or a maintenance delay in clear weather that later leads to weather delay hours later when bad weather rolls in. I've experienced both of these scenarios when requesting a hotel room.
What about more compensation for premium cabins. So i pay 10K to go from SFO-LHR on Polaris and i get paid the same compensation as someone in basic economy. How is that fair ?
The compensation should be much higher for premium classes. Like multiply what you are proposing and multiply it by 10.
No. EU 261 is based on distance and time not fares. If there’s a disruption it’s the same for everyone.
However denied boarding is different from the US and potentially higher than €600.
@BBT... because it's not meant to be punitive, just cover cost of delayed flights, no matter what cabin you're flying. If you want a nicer hotel or meal, that's out of your pocket
Compensation is not covering the cost of anything, that's the duty of care which is separate. Compensation is on top of the costs of hotel, meals, etc.
Put flyers in what seats? Load factors are 90% plus. This isn't 1985. You want 1985 load factors then there needs to be 1985 fares.
When you fly you should account for potential delays. Most delays are weather related, rarely a maintenance issue.
In the event of maintenance or crew staffing (not due to weather) the airline should cover reasonable meals (not a paltry $12) and lodging if forced over night.
@ George Romey -- Load factors might be high, but there are frequently still empty seats on other airlines. I can't count the number of times I've had a serious delay where an airline couldn't rebook me in a reasonable timeframe, but another airline had a seat.
Sure, when you fly you should expect you might not be on-time, but I don't understand what the argument is against rebooking passengers on other airlines?
Not saying this is right or wrong in terms of the argument "against" rebooking passengers on OA, just an opinion, but...
"Forced" rebooking on OA could create perverse incentives for airlines. If you take one of the many Delta meltdowns (thunderstorms, fires in the ATL tunnels, staffing incompetence post covid, crowd strike excuses, etc), forced rebooking on other airlines could (emphasis on could):
1. give Delta a reason to not fix their issues since...
Not saying this is right or wrong in terms of the argument "against" rebooking passengers on OA, just an opinion, but...
"Forced" rebooking on OA could create perverse incentives for airlines. If you take one of the many Delta meltdowns (thunderstorms, fires in the ATL tunnels, staffing incompetence post covid, crowd strike excuses, etc), forced rebooking on other airlines could (emphasis on could):
1. give Delta a reason to not fix their issues since AA and UA close-in fares would be hurt if there was a forced rebooking and Delta is able to get out of a self-created mess more easily by just putting their pax on OA at a potentially govt regulated rate (if the government tried to regulate an inter-airline % of full fare in this instance or something similar)
2. But... more likely, it would just cause the inter-airline fare agreements between the US3 to be redone/repriced to prevent such an issue where Delta would be "hurting" aa and UA by piling their passengers on every last minute seat that AA and UA have since Delta couldn't figure out thunderstorms, staffing, how crowdstrike IT works, etc and could create new disincentives to put passengers on OA during non-IRROP events since you'd expect the new OA inter-airline fares to be raised if there's a new forced massive OA placement that could have the impact of close-in CLT/IAD fares being gone for a few days for AA/UA when ATL has one of their days-long events...
But, I guess much of the above could be said about the process in place today where the inter-airline rates exist now...
Using Delta as the example since they've become the poster child for meltdowns the last few years, but obviously the situation could impact any airline.
Mainly just getting at the financial impact to other carriers when ATL (or any hub really) inevitably goes down again. The government shouldn't be creating a regulation where a Delta event is a shared financial event among the US3 and it seems like the government would either attempt to regulate the inter-airline fare in this situation or you'd expect that fare to go up in normal circumstances to where the US3 would stop using it for their elites as they do now mostly.
Or maybe Ed Bastian could just not go to Paris and give his D1 seat to a paying passenger that's been waiting for days post Delta meltdown vs sipping champagne at the Olympics at the expense of his customers ;)
There are only so many open seats. So if a 737 goes out of service that's 150 passengers+ looking to get rebooked. There's not that kind of slack in the system. Also, say a DL flight might have ten open seats but DL might not release all those 10 seats to another airline. Moreover, that limited number of seats will go to the airline's top flyers, not the BE flyer that paid $129 round trip New York to Orlando.
first, this will go absolutely nowhere. This is the work of a handful of people that are about ready to be swept out of power trying to leave a legacy.
second, the current DOT got airlines to agree to customer service promises and then turned around and fined airlines like WN that failed to deliver on those promises.
third, this will decimate the ULCC industry even further. They do not have the frequency...
first, this will go absolutely nowhere. This is the work of a handful of people that are about ready to be swept out of power trying to leave a legacy.
second, the current DOT got airlines to agree to customer service promises and then turned around and fined airlines like WN that failed to deliver on those promises.
third, this will decimate the ULCC industry even further. They do not have the frequency in markets, have the lowest on-time percentages, and already are struggling financially.
We can see from the mandatory refund requirements that the big legacy airlines will figure out how to use whatever rules that are thrust on them to harm customers even more. Cranky has accurately written about what is happening w/ mandatory refunds for schedule changes and it isn't at all pro-consumer.
Finally, the biggest source of delays is due to ATC. The DOT needs to make it job one to fix ATC in the US. the same problem exists in Europe.
Government wants desperately for someone to pay the price for the government's own incompetence and failures and no one should ever accept that as acceptable.
"...the biggest source of delays is due to ATC."
Nope.
George Romey says that "Most delays are weather related..."
So that's settled.
willy,
you should read the DOT's Air Travel Consumer Report
Besides delays that are obviously the fault of air carriers, the largest source of delays is the air traffic control system - with a rate that is many times more than for severe weather.
There is no delay for just usual bad weather because it is rolled into the ATC system - which the government controls.
and it is precisely because there...
willy,
you should read the DOT's Air Travel Consumer Report
Besides delays that are obviously the fault of air carriers, the largest source of delays is the air traffic control system - with a rate that is many times more than for severe weather.
There is no delay for just usual bad weather because it is rolled into the ATC system - which the government controls.
and it is precisely because there are enough loopholes that ULCCs do fine; they fly heavily to secondary airports so do not have the delays that exist in large airports.
And Ryanair has one of the best on-time ratings in Europe so they understand well that they have to run a reliable operation unless they want to pay compensation.
Yes, the ULCCs in the US have cut corners but the carriers that have poor on-time ratings is not just ULCCs. B6 and AA consistently this year have been below average for on-time according to DOT data.
ULCCs in Europe manage to do just fine, despite being subject to the same compensation laws. Maybe Spirit and Frontier just suck and should get their act together.
ATC delays would be out of airlines' control and not subject to compensation, just like EC 261.
Admit it, you just care more about a certain airline's financials than you do about consumers.
My guess is this is DOA with the change in administration, but the rule I would like to see changed more than stated compensation is to require rebooking on other airlines. It is absurd that one airline can essentially wring their hands and say we can't get you there for multiple days and leave the passenger stranded with only a refund option that doesn't cover a significantly higher walk-up fare on a competitor.
Europeans, has there been data on flight on time performance improving significantly after similar rules went into effect?
Not really as it’s impacted by weather ATC. The problem in Europe is that people go to court for compensation when there is evident to support the disruption was outside the control of the airline and they rule in favour of the customer. In some cases even if the airport was temporarily closed. Some judges just look at it like David v Goliath. Ultimately airlines don’t intentionally delay or cancel flights, it’s not their business to so.
What's wrong with your take is that while yes, airlines do NOT intentionally delay or cancel flights, they take other indirect actions (or inaction - like delaying IT upgrades...ahem...BA) that have a widespread effect on their ability to operate flights. ALL these things are under the control of airlines. So even they aren't DIRECTLY delaying/cancelling flights, they're other actions have caused that. So it is still very much a David/Goliath situation. Even more so in...
What's wrong with your take is that while yes, airlines do NOT intentionally delay or cancel flights, they take other indirect actions (or inaction - like delaying IT upgrades...ahem...BA) that have a widespread effect on their ability to operate flights. ALL these things are under the control of airlines. So even they aren't DIRECTLY delaying/cancelling flights, they're other actions have caused that. So it is still very much a David/Goliath situation. Even more so in the US where stock buybacks have taken priority over infrastructure upgrades that have caused or allowed meltdowns.
Name one case where court sided with the customer when the delay was outside of the airline's control. And no, hiring incompetent management unable to manage labour relationships is not outside of your control. Neither is choosing cheap suppliers who can't deliver. Nor is putting your operational needs above what customers need.