US Drops Plan for Airline Cash Compensation Rule

A proposal that could have required airlines to pay passengers cash compensation for lengthy flight delays has officially been scrapped under the Trump administration. The rule, introduced during the Biden administration, aimed to hold carriers financially accountable for disruptions within their control, potentially offering travelers payouts of up to $200 for significant delays.

Instead, the Department of Transportation (DOT) confirmed that current consumer protections will remain in place. Airlines are still obligated to provide refunds for canceled flights and delays deemed “significant,” but there will be no standardized cash payments beyond ticket reimbursements. Industry groups had strongly opposed the measure, warning it would increase operating costs and ultimately lead to higher fares.

The proposal had been inspired in part by European Union regulations, where travelers can claim compensation when delays exceed certain thresholds. U.S. airlines argued that such a system would be difficult to implement in a domestic market as large and complex as the United States.

Consumer advocates expressed disappointment at the reversal, noting that passengers face mounting frustrations with operational reliability. Flight delays and cancellations have surged in recent years, fueled by staffing shortages, severe weather, and outdated infrastructure.

Airline executives, however, welcomed the decision, stressing that it allows carriers more flexibility to manage schedules without facing automatic financial penalties.

While the move preserves the status quo, it also highlights ongoing tensions between protecting passengers and balancing airline economics, leaving travelers with fewer direct financial remedies when delays occur.

Sources: AirGuide Business airguide.info, bing.com