President Biden will direct the Transportation Department on Monday to study whether airlines should pay passengers for flight delays, in addition to refunds and other services.
At a White House event alongside Transportation Secretary Pete Buttigieg, Mr. Biden will formally begin the rulemaking process aimed at addressing the inconvenience passengers experience due to airline cancellations or long delays .
The US has no federal laws requiring airlines to compensate passengers for delays. Airlines are only required to offer a refund if they cancel a flight.
This makes the US different from Europe, where a law that took effect in 2005 requires airlines to pay passengers for cancellations, denied boarding or delays of more than 2 hours. It applies to most airlines based in European Union countries, as well as Iceland, Norway and Switzerland.
Under EU regulations, passengers are entitled to compensation of between €250 and €600, depending on the length of the flight and the delay, as long as the flight has not been canceled due to “extraordinary circumstances”, such as time
Other rules the Department of Transportation will consider as part of the process include requiring airlines to provide passengers with a meal or meal voucher, overnight lodging, round-trip hotel ground transportation, reservation change and punctual customer service during periods of widespread flight irregularities.
“Together, these announcements build on the Biden-Harris Administration’s efforts to promote competition in the American economy and lower costs for hardworking Americans,” a White House official said.
The initiatives come after Southwest Airlines canceled more than 60% of its flights over two days in December 2022. It was followed by a massive system-wide “reset” on December 26 that canceled thousands more flights
Between December 25 and 26, Southwest canceled more than 5,500 flights. On December 28, it canceled another 2,348 flights. All told, it canceled 16,700 flights over the Christmas holiday.
Southwest responded to the crisis by reimbursing passengers for the cost of alternative travel arrangements and awarding other travelers additional loyalty points, even though it was not legally required to do so.
Delays, however, are already costing airlines a significant amount of money. Even without federally mandated compensation, delays cost airlines an estimated $8.3 billion in increased expenses such as crew, fuel and maintenance in 2019, according to the Federal Aviation Administration.
Southwest reported a loss of $410 million in the fourth quarter of 2022 due to the December disruptions, which was part of an overall loss of $800 million. The airline said last month that the system merger cost it an additional $380 million in the first quarter of 2023.