Trump Administration Drops Plan for Up to $775 Airline Delay Compensation

WASHINGTON – The Trump administration has announced the withdrawal of a Biden-era proposed rule that would have mandated airlines to compensate passengers for significant delays or cancellations caused by carriers. This decision marks a significant shift in aviation consumer protection policy, drawing immediate criticism from former officials and consumer advocates. The proposed regulation aimed to provide financial relief and other amenities to travelers affected by disruptions within an airline's control.

The rule, initially proposed by the Biden administration in 2023, sought to guarantee passengers compensation ranging from $200 to $775 for delays of three hours or more, depending on the length of the delay. It also included provisions for free meals, lodging, and rebookings in instances where flight disruptions stemmed from issues such as mechanical problems or system outages. Proponents of the rule highlighted its alignment with consumer protections already in place in regions like the European Union.

According to a regulatory notice published by the White House's Office of Information and Regulatory Affairs, the decision to withdraw the proposal is "consistent with Department and administration priorities." A Transportation Department representative further stated that some rules proposed by the previous administration "went beyond what Congress has required by statute," indicating an intent to reconsider such "extra-statutory requirements." This move aligns with the administration's broader deregulatory agenda.

The airline industry has largely welcomed the administration's decision. Airlines for America, a trade group representing major U.S. carriers, expressed encouragement, stating that the Department of Transportation is "reviewing unnecessary and burdensome regulations that exceed its authority and don't solve issues important to our customers." Airlines had previously argued that the proposed compensation rule would significantly increase operating costs and potentially lead to higher ticket prices for consumers.

Conversely, the decision has been met with strong disapproval from consumer advocates and former government officials. Pete Buttigieg, the former Transportation Secretary, criticized the move on social media, stating, "The Trump administration is canceling the DOT’s rule to get passengers compensation for extreme airline delays - just the latest example of them siding with corporations and against customers." Paul Hudson, president of FlyersRights.org, called the decision "unfortunate and ultimately self-defeating," emphasizing that without such a rule, airlines lack the necessary incentive to improve system reliability.

Under current U.S. regulations, airlines are required to offer refunds for canceled flights, but there is no universal mandate for cash compensation for delays. While some airlines provide discretionary compensation like meals or hotel stays during significant disruptions, these are not federally enforced. The withdrawal of this proposed rule means U.S. passengers will continue to rely on existing airline policies rather than a comprehensive federal standard for delay compensation.