Wednesday, September 27, 2023
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Rules proposed to compensate air passengers for delays, cancellations

There is no timetable yet for when the Transportation Department will draft the new regulation.

WASHINGTON (CN) — Ahead of one of the busiest travel days of the year, the Biden administration is proposing new requirements for airlines to compensate passengers for delays and cancellations.

In remarks at the White House, President Joe Biden described a proposal similar to existing regulations in Canada and Europe, where airlines must cover expenses for meals, hotels and rebooking when the carriers are responsible for standing or delaying passengers. Federal law currently requires airlines to compensate passengers only for the price of their ticket.

“American air travelers deserve better,” President Joe Biden said, speaking Monday from the Eisenhower Executive Office Building. “This is just about being fair.”

The U.S. Department of Transportation will get the rulemaking process started by filing a notice but it is unclear when the proposed regulation will be published. Biden and Transportation Secretary Pete Buttigieg suggested that the rules would focus on instances where a plane's mechanical issues or the lack of a crew leads to cancellations and long delays.

A trade group for major U.S. airlines responded to the policy announcement Monday by emphasizing that the majority of cancellations and delays that occurred in 2022 and 2023 were caused by factors outside their control, such as the weather and air traffic control issues.

“U.S. airlines have no incentive to delay or cancel a flight and do everything in their control to ensure flights depart and arrive on time,” said Airlines for America, which highlighted its members efforts to hire more workers and reduce their schedules.

Buttigieg meanwhile noted that the industry last summer had “unacceptable rates of cancellations and delays even on blue sky days.”

“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” Buttigieg said ahead of Biden's remarks. “This rule would, for the first time in U.S. history, propose to require airlines to compensate passengers and cover expenses such as meals, hotels, and rebooking in cases where the airline has caused a cancellation or significant delay.”

When the onset of the pandemic cratered travel demand, airlines received a $54 billion federal bailout that came with a prohibition on layoffs among other conditions. Having paid tens of thousands of workers to quit or retire early, the airlines faced significant staffing shortages once travel needs rebounded. The scale of the situation came in late 2022 during holiday travel when Southwest Airlines canceled 16,700 flights.

Regulators are investigating if the company knowingly scheduled more flights than it could handle.

Transportation Department figures show that airlines have added about 118,000 workers since November 2020, putting their total staffing now at 5% higher than before the pandemic. Meanwhile data from tracking service FlightAware show that the rate of canceled flights rests at 1.6%, down from 2.1% in the same period last year, but delays have become more common and slightly longer on average.

Over the past two years, the 10 largest airlines have guaranteed meals and free rebooking on the same airline, with nine also guaranteeing hotel accommodations. The government has long suggested airlines compensate passengers for travel disruptions, but Monday’s proposal would make such payment mandatory.

“The FAA and Department of Transportation are doing our part, but airlines need to accept their fundamental responsibility to better serve passengers,” Buttigieg said, referring to the Federal Aviation Administration. “When they don’t, we are here to enforce passenger rights and hold airlines accountable.” 

Biden and Buttigieg took no questions from reporters after discussing the proposal.

DOT also launched on Monday and expanded its Airline Customer Service Dashboard to show which airlines offer cash compensation, a travel credit or frequent flyer miles for cancellation or a delay of three hours or more. 

Only two of the top 10 airlines meet any of those marks, with Alaska Airlines offering a travel credit and frequent flyer miles and JetBlue offering a credit. No airline guarantees cash compensation.

Applause for Monday's announcement came from Massachusetts Senator Edward Markey, who was among a group of senators to send a letter in November urging the Department of Transportation to require that airlines to provide compensation to passengers for delays and cancellations. 

“For too long, passengers have borne the cost of the airlines’ mistakes — totaling over 38 million minutes in 2022 alone,” Markey said in a press release. “The new rule will hold the airlines accountable for these flight disruptions and help stop the financial exploitation of air travelers.”

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Categories / Business, Consumers, Government, National

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