In a reflection of passengers’ growing dissatisfaction after waves of pandemic-era flight cancellations and delays, the Biden administration announced Monday it wants airlines to compensate passengers for travel disruptions.
“We know how frustrating delays, cancellations and rebookings are for travelers,” Biden said. “Last holiday season, travelers were stranded for days and had to scramble to find other ways to reach their destinations … And while flight delays and cancellations have come down since then, there’s still a problem. American air travelers deserve better.”
The proposal would mark a significant shift in how the Transportation Department regulates air travel, providing protections similar to those of European and Canadian travelers. Current aviation rules only require ticket refunds. The proposed changes come amid growing calls for regulators to better protect airline consumers after pandemic-related strains put a spotlight on the industry.
The administration’s announcement precedes the closely watched summer travel season, in which airlines are aiming to avoid the widespread disruptions that marred last summer and the Christmas and New Year’s holiday periods. Elevated rates of cancellations and delays are partially the result of the pandemic, but they have tested the patience of travelers, lawmakers and federal regulators.
“Airlines need to accept their fundamental responsibility to better serve passengers when they don’t,” Transportation Secretary Pete Buttigieg said. “We are here to enforce passenger rights and hold airlines accountable.”
The proposed changes were lauded by consumer groups that said the administration’s actions were overdue. They are likely, however, to face fierce opposition from the airline industry.
Republicans on the Senate Commerce, Science and Transportation Committee, including the highest-ranking Republican on the committee, Sen. Ted Cruz (Tex.), blasted the proposal Monday.
“Instead of addressing the many pressing challenges facing our aviation system, the Biden administration is making obvious that their goal is to re-regulate every single facet of passenger air travel,” said Christian McMullen, a spokesman for committee Republicans. “These unnecessary regulations will reduce competition, access to certain markets, and drastically increase costs for travel.”
Airlines for America, an industry group that represents the largest domestic carriers, did not address the proposal directly but said in a statement Monday that cancellations and delays are often caused by factors outside their control, such as 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,” the group said. “We look forward to working with the Administration to ensure U.S. airspace remains the safest airspace in the world while supporting robust marketplace competition.”
Kerry Tan, an associate professor of economics at Loyola University Maryland, said that the proposed rules might seem like a win for consumers on the surface but added that there could be a downside. Among his concerns: Airlines could raise prices to make up for the additional costs, or they might reduce flights to improve performance.
Robert Mann of R.W. Mann & Co., an aviation consulting firm, said the timing of the announcement could mislead travelers into thinking they would be eligible for compensation this summer, rather than months or years from now.
At the start of the pandemic, Congress swept in to rescue the airline industry, which saw demand for tickets all but evaporate in early 2020. Lawmakers ultimately provided $54 billion in aid, funds they said would protect jobs and were an acknowledgment of the industry’s importance to the economy.
But even with that taxpayer aid, airlines cut their head counts and many proved unready for a rapid rebound in demand for tickets in 2021. Travelers last summer again were frustrated by high rates of cancellations and delays, many of them caused by issues under airlines’ control. In late December, a meltdown at Southwest Airlines disrupted the holiday plans of thousands.
At a recent House hearing on the Federal Aviation Administration’s budget, some lawmakers laid out what their constituents have faced.
“I had someone say, ‘I don’t feel like I’m buying a ticket; I feel like I’m buying a chance,’” said Rep. Mike Quigley (D-Ill.).
As the mood has soured, the administration has been ratcheting up pressure on airlines in recent months. The announcement Monday marks the next step in that process.
The Transportation Department last year published a dashboard that allowed travelers to compare what help individual airlines had promised to provide travelers in the event of a cancellation or significant delay. That step led several airlines to pledge new help for stranded travelers.
The administration expanded that push Monday, launching a new website called FlightRights that lists whether airlines provide cash or other forms of compensation. No airlines provide cash, according to the site, but Alaska Airlines provides travel vouchers and frequent flier miles, and JetBlue Airways provides vouchers.
The Transportation Department has proposed other changes to airline regulations in recent years — including more fare transparency — but a push for compensation marks a bigger shift.
Some consumer advocates had faulted the department for doing too little to hold the industry accountable. On Monday, they praised officials for moving forward with a compensation proposal.
“This action reflects a common-sense principle, which is: Our time is valuable,” said John Breyault, a vice president at the National Consumers League. “When we lose time because airlines screw up, we should get compensated. That seems to be what the DOT’s proposal reflects.”
The European Union already requires airlines to provide cash compensation for cancellations on a scale that increases with the length of the flight, with amounts topping out at 600 euros (about $660) for trips longer than 2,175 miles. Canadian rules provide for compensation of up to 1,000 Canadian dollars (about $750).
The Transportation Department said one study found the European rules contributed to a reduction in delays, but opponents of the idea say that airlines already are motivated to provide reliable service and that requiring compensation in the United States would do little to improve performance.
William McGee, a senior fellow at the American Economic Liberties Project, said although the rulemaking process will take time to play out, the updated dashboard could put pressure on airlines to offer compensation sooner.
“The question is: Will that have an effect in effectively shaming some airlines that have nothing but red X’s instead of green check marks?” McGee said. “Let’s hope so.”
With demand for air travel continuing to recover from the pandemic, airlines are expecting a busy summer season, buoyed by resurgent demand for overseas trips. Airlines are adding flights, turning to larger aircraft and hiring employees to prepare.
Nonetheless, analysts say the potential for significant disruptions remains. One source of trouble lies with the government itself, with the Federal Aviation Administration warning that a shortage of air traffic controllers at a key New York facility could cause problems.
