Payments for flight cancellations? DOT considering a new rule.

Show Caption

Should airlines be required to compensate passengers with cash if their flight is canceled or significantly delayed? That's the question the Department of Transportation is asking as it begins the rulemaking process for all-new possible passenger protections.

“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,” Transportation Secretary Pete Buttigieg said in a statement. “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.” 

Under the proposal, airlines would be required to offer at least $200 in compensation for significant delays or cancellations that is caused by the carrier, like a mechanical delay, staffing issue or IT outage. The amount of compensation required for a cancellation would be determined by when the passenger is able to reach their destination on alternative flights. The proposed compensation structure in the DOT's notice is:

• $200-300 for domestic flight delays of three to six hours
• $375-525 for delays between six and nine hours
• $750-775 for delays of nine hours or more

The proposal specifies that airlines would only be required to make the payment if they are fully or partially responsible for the cause of delay.

The rule would also require expanded rebooking policies from most airlines. Currently, not all airlines rebook on other carriers in the event of significant delays or cancellations, but the DOT's proposed rule would require them to do so if a flight is delayed by more than three hours domestically or six hours internationally, or canceled. The rule would also codify a requirement that all airlines rebook passengers on the next available flight at no charge, a practice that is already common in the industry.

Finally the DOT's proposal would also require airlines to cover the cost of food, lodging and related ground transportation for passengers whose flight delays or cancellations result in an unplanned overnight stay.

This kind of compensation is already required in Europe, and Airlines for America, a trade group that represents most commercial U.S. airlines, said it has not been effective there.

"Airlines’ entire business model is based on satisfied, repeat customers. In this highly competitive industry, carriers don’t need further incentive to provide quality service," a statement from A4A said. "An analysis of the European scheme that DOT is attempting to emulate shows that government-mandated additional compensation needlessly drives up the cost of flying while negatively impacting operations."

The DOT is seeking public comment on these proposals for the next 60 days.

Zach Wichter is a travel reporter for Paste BN based in New York. You can reach him at zwichter@usatoday.com.