DOT Cancels Proposed Cash Compensation Rule for Flight Disruptions
The U.S. Department of Transportation (DOT) has officially canceled a proposed rule that would have required airlines to pay passengers up to $775 in cash compensation for major flight disruptions. This rule was introduced under former President Joe Biden but never formally approved.
What Was the Proposed Compensation Rule?
The proposed rule aimed to provide U.S. travelers with protections similar to European travel regulations. Under the rule, airlines would have been required to pay cash compensation whenever they failed to follow their posted flight schedules.
Although airlines must still refund passengers for canceled or significantly delayed flights, they no longer face the possibility of paying additional cash compensation.
Why Did DOT Cancel the Rule?
According to the DOT, canceling the rule is part of a broader deregulatory effort. The agency argues that forcing airlines to pay cash compensation could lead to:
- Higher ticket prices
- Increased financial burden on airlines
- Reduced competition in service quality
The DOT stated that airlines should “compete on their own services and compensation policies” rather than being forced to comply with minimum compensation standards.
Reaction from Lawmakers and Consumer Advocates
Democratic senators strongly opposed the rule change. In a formal letter sent in September, lawmakers urged the DOT to rethink canceling the compensation rule.
Senator Richard Blumenthal, Maria Cantwell, and Ed Markey stated:
“When an airline’s mistake imposes unexpected costs on families, the airline should help cover those costs and provide proper accommodations.”
Consumer advocates also argue that without compensation requirements, passengers have fewer protections during major travel disruptions.
DOT May Introduce New Rules
While the compensation rule is now closed, DOT is considering new regulations regarding:
- The exact definition of a flight cancellation
- Clearer rules on airline refunds
- Ticket pricing and advertising guidelines
These efforts may still bring changes to how airlines operate in the coming months.
Reporter Information
Article originally reported by travel journalist Zach Wichter. He writes the Cruising Altitude column and is based in New York.
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