You could one day get cash for a delayed flight.
The White House is out with a new effort aimed at tackling some of travelers’ peskiest recurring concerns: flight delays and cancellations. It’s the latest in a larger Biden administration effort to focus on pro-consumer policies ahead of the 2024 election.
Under a new rule, the Department of Transportation will consider, the federal government could require airlines to offer cash payments for long delays and mandate they provide more compensation for cancellations. Currently, no major airlines provide cash payments for passengers experiencing a controllable delay that pushes their trip more than three hours, according to the administration. That’s partly because they’re not required to by law. (Airlines must provide refunds for cancellations, but don’t have to do the same for delays.) Additionally, policies vary by airline when it comes to how vouchers and bookings for cancellations are handled.
The proposed rule is one of several consumer protection policies the White House has advanced recently. It follows an FDA proposal that enabled hearing aids to be sold over the counter, likely reducing their cost, and support for legislation introduced by Sens. Sheldon Whitehouse and Richard Blumenthal, which would limit hidden fees for hotels and ticket prices. Biden announced aspects of this push in his State of the Union address earlier this year in a bid to burnish the Democratic Party’s image ahead of 2024. Additionally, it echoes consumer protection regulations that already exist in Canada and Europe, where passengers have more defined rights than those in the US.
The White House is just beginning the rulemaking effort, meaning it could be months before any policy is finalized. But by making requirements stricter for airlines, the administration could pressure companies to improve their efficiency and standardize the treatment customers receive across airlines, forcing companies to subscribe to the same policies.
“This rule would fill a void,” Timothy Ravich, an aviation law expert at the University of Central Florida, told Vox. The actual impact of the rule on consumers, however, will be dependent on enforcement and airline buy-in, experts say.
The rulemaking comes amid a spike in air travel concerns: A 2022 study from DOT found that complaints were up 270 percent at the time from pre-pandemic levels. In the last year, a high-profile wave of cancellations by Southwest Airlines during the winter holiday season plus surging demand and staffing shortages have thrown these issues into sharp relief. “Get Ready for Another Hellish Summer of Air Travel,” an April Forbes headline indicative of current sentiment reads.
If the rule were approved, it could face pushback from aviation groups, and congressional Republicans could try to roll it back, a move that Biden would be able to veto. The White House push, ultimately, is intended to ensure that consumers don’t field the costs in the case of a delay or cancellation, and to send a message to consumers that Democrats are on their side.
“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” Transportation Secretary Pete Buttigieg said in a statement.
Flight costs and snafus have spiked
The administration’s announcement of this rulemaking follows a spike in travel issues. Beyond airline staffing shortages and a surge in travel interest as the pandemic winds down, problems with extreme weather, aging infrastructure, and air traffic controller shortages have also contributed to these challenges. In one case, a massive tech outage of the Federal Aviation Administration’s system grounded all domestic flights temporarily earlier this year. Those issues have occurred as plane tickets have gotten more expensive, with airline prices increasing 25 percent in the last year, and outpacing inflation.
Ending delays and cancellations would arguably benefit airlines as well as consumers. “Flight disruption costs airlines $8.3 billion per year and passengers $16.7 billion, according to a study sponsored by the FAA through its National Center of Excellence for Aviation Operations Research,” consumer advocate Christopher Elliott previously wrote for the Washington Post. Such savings could be beneficial for airlines, which have projected lower profits this year as labor and fuel costs have gone up.
The White House has tried to remedy some other issues with airline travel as well. In 2022, DOT launched a rulemaking initiative intended to force airlines to publish ticket fees upfront so that people aren’t surprised by hidden fees later on in the process. A hearing was held on this proposal in March.
More aggressive compensation requirements are also similar to those that already exist in Canada and Europe. In both places, airlines must provide compensation to travelers if they experience a controllable delay of three hours or more. The policies in Europe have been found to improve airline efficiency with relatively low cost increases for customers.
“A recent study from the College of Europe found that it was associated with a 5% improvement in airline on-time performance. And the cost to passengers is low: The regulation raises ticket prices by about $1,” Elliott wrote. One question that’s emerged, however, regarding the policies in Europe is the issue of enforcement, he notes.
In certain cases, airlines have been slow to provide passengers compensation for delays even when required to do so. In Europe, as Elliott documented, it can take months for a customer’s claim to be processed, diluting the benefit of the policy.
That research suggests holding companies accountable will require both the approval of a new rule as well as the dedicated enforcement of it.
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