The U.S. Department of Transportation (DOT) on Thursday announced an Advance Notice of Proposed Rulemaking “to protect passengers stranded by airlines canceling or significantly changing their flights.” This rulemaking would require airlines 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 consumer protections have already been adopted in the European Union, United Kingdom, Canada and Brazil, among others, according to the DOT. It adds that these requirement compensation programs have reduced the likelihood and duration of flight delays.
Airlines would be on the hook for $200 to $300 in automatic cash compensation for domestic delays of at least three hours but less than six, $375 to $525 for delays of at least six hours but less than nine, and $750 to $775 for delays of nine hours or more. Airlines would only be liable to pay out when the disruption is under their control, such as a mechanical issue or an IT airline system breakdown.
The DOT says it is considering whether small airlines should pay less than large airlines and whether or not compensation should be required when a passenger is notified a week or two in advance of the cancellation or significant delay. As for how often delays are with the control of the airline, in both 2022 and 2023, over 60 percent of three-hour or longer domestic flight delays were airline-caused.
In addition to cash payments, airlines would be required to rebook travelers at no additional cost on the next available flight should their original flight be canceled, their departure delayed three hours or more domestically or six hours or more internationally, or if a delay results in a missed connection. It’s still being determined if carriers must rebook passengers on their own flights or may use those of its branded codeshare partners.
Lastly, airlines must cover meals, overnight lodging and related transportation expenses stranded passengers. The DOT says it’s considering 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 would not submit receipts for costs up to a maximum reimbursement threshold per service.
This rulemaking follows on the launch of the DOT’s “Automatic Refund Rule,” which requires airlines to provide automatic cash refunds to passengers when owed. The rule—which ASTA said included a profound error that left travel agencies on the hook for these payments—requires refunds to be automatic, prompt, in the original form of payment and in the full amount paid.
Related Stories
Travel Industry Solutions Launches Guide for Travel Advisors
DOJ, DOT to Investigate State of Competition in Air Travel
ASTA, AHLA Applaud Federal Court Striking Down DOL Overtime Rule
Travel Trade Reacts to Donald Trump’s Re-election as President