The incoming Trump administration will have the final say on a sweeping DOT proposal for airlines to compensate flyers when flights are canceled or extensively delayed.
A Dec. 5 regulatory notice is asking the public for feedback on how much airlines should have to pay flyers for cancellations or when flights are delayed by at least three hours. The rule would apply only in cases where the delay or cancellation is the fault of the airline and not caused by external factors such as weather.
As a starting point, the DOT is considering a tiered approach to compensation requirements, starting at between $200 and $300 for domestic delays of three to six hours and increasing to as much as $775 for cancellations and longer delays.
The public was given 60 days to comment on the compensation proposal, meaning that leadership of the department will have turned over from one administration to the next before the comment period expires.
Pete Buttigieg, President Joe Biden's DOT secretary, has aggressively pushed for increased airline consumer protections during his tenure, including new airline refund requirements that took effect in late October and a regulation requiring earlier disclosure of ancillary fees during the booking path. The airlines sued the DOT over the fee-disclosure rule, and a federal appeals court granted the airlines a temporary stay.
Trump has tapped Sean Duffy, a former Republican congressman from Wisconsin and Fox Business host, to replace Buttigieg. The previous Trump administration took a far less assertive approach to airline consumer protections than Buttigieg's DOT.
Mark Dombroff, an aviation attorney and partner at the Northern Virginia-based office of Fox Rothschild, said that with the coming administration change, the compensation proposal could turn out to be much ado about nothing.
"When the 60 days expires this thing may go quiet, completely dead," he said. "The DOT could look and say, 'There is no need for a proposed rulemaking.'"
For this proposal, Dombroff said, the DOT issued what is called an Advanced Notice of Proposed Rulemaking (ANPR), which has no formal procedure associated with it and is not a required legal step. Unlike a Notice of Proposed Rulemaking, which puts forward what an upcoming regulation is contemplated to look like, an ANPR merely asks the public what it thinks about the type of rule an agency is considering.
The Trump administration will be under no obligation to even weigh in publicly on the process.
"I think it's pretty clear from everything that's out there that there is going to be less regulations across the board going forward, and this would be more regulation," Dombroff said.
Potential effect on ticket prices
Nevertheless, the compensation proposal has raised hackles from airlines while drawing praise from consumer advocates.
Airlines for America (A4A) and IATA have decried the proposal, which closely aligns with existing law in the European Union.
"A4A carriers are providing automatic refunds if the passenger chooses not to be rebooked -- regardless of whether the significant delay or cancellation is within the carrier's control -- and also providing reimbursements for food, transportation and lodging for significant controllable delays," the group said. "Mandating additional cash compensation -- beyond what airlines already provide -- will drive up ticket prices, make air travel less accessible for price-sensitive travelers and negatively impact carrier operations."
IATA said that EU compensation regulations cost airlines more than $5 billion annually.
"These costs continue to rise and are eventually paid by consumers through higher fares and reduced choice," the trade group said.
But Skycop and AirHelp, two companies that assist flyers in pursuing compensation for delayed flights under the EU regulation, estimate the pass-through costs would be nominal.
Sergei Ivashkovsky, managing partner of Skycop parent Teamsky, estimates compensation costs account for less than 1% of European airline ticket prices.
"It's very beneficial for passengers," he said. "The result of an improvement in regulation is that [airlines] would improve their services, eventually."
Eric Napoli, chief legal officer for AirHelp, said that based on studies the company has done, pass-through costs in the U.S. should be $1 per fight at most.
A 2023 study published in the peer-reviewed journal Transport Policy found that European flights to the EU, which are covered under EU compensation laws, were 5% more likely to arrive on time than EU-bound flights by non-European airlines, which aren't covered by the laws. The effect, authors Hinnerk Gnutzmann and Piotr Spiewanowski wrote, is strongest on routes with little competition.
Impacts aside, Napoli argued that compensation requirements are important as a matter of fairness.
"In Europe it has been fantastic," he said. "A lot of it has to do with passengers' peace of mind, knowing that they're not going to just be stuck at the whim of the airline."