The Trump Administration has decisively rolled back a proposed regulation from the Biden era that sought to ensure airline passengers received cash compensation for flight delays and cancellations. A White House document released on Thursday clarified that the Department of Transportation will no longer pursue the rule introduced by former President Joe Biden in May 2023. This development marks a significant shift in the government's approach to consumer protection in the airline industry.
Under the abandoned proposal, airlines would have been required to provide cash payouts, meals, and hotel accommodations to passengers when flight disruptions were within the airlines' control. The compensation scheme suggested by the Biden Administration included payments ranging from $200 to $300 for domestic delays over three hours and up to $775 for more substantial delays.
"We are encouraged by this Department of Transportation reviewing unnecessary and burdensome regulations that exceed its authority and don’t solve issues important to our customers," said Airlines for America.
However, the Trump-led Department of Transportation cited alignment with department and administration priorities as the reason for withdrawing the rule. The decision was met with approval from the airline industry. Airlines for America, a group representing major carriers such as American, Delta, and United, lauded the reversal, arguing that the proposed regulations would have unnecessarily increased ticket prices and exceeded the authority of the Department of Transportation.
Currently, airlines are mandated by law to issue refunds when flights are canceled, but there is no obligation to compensate for delays. The Department of Transportation, under the leadership of Secretary Sean Duffy, expressed commitment to implementing aviation consumer protection requirements as mandated by Congress. Consequently, the department is reviewing several additional Biden-era airline regulations, including those on service fee disclosure and ticket pricing.
This policy reversal is indicative of the Trump Administration's broader agenda of deregulation and reducing compliance costs for businesses. In line with this approach, Trump officials have pointed to voluntary commitments made by airlines in 2022 to cover expenses such as hotel stays and meals during delays as proof that the industry can self-regulate without governmental oversight.
The rollback has not been without criticism. Former Biden adviser Bharat Ramamurti denounced the decision, arguing that the proposed rule would have significantly reduced the number of delays and cancellations while providing passengers with deserved compensation.
This latest move is part of a series of reversals of Biden's consumer regulations by the Trump Administration, emphasizing a shift towards market solutions and away from regulatory interventions in the airline industry.
