February 13, 2025

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What Do New Airline Compensation Rules Mean For Your Next Flight?

What Do New Airline Compensation Rules Mean For Your Next Flight?

The U.S. Department of Transportation (DOT) last week proposed a new rule that would require airlines to compensate passengers for lengthy delays. It would mandate airlines to pay cash compensation, rebook passengers on the next available flight, and cover expenses for meals, accommodations, and transportation if a delay is caused by the carrier. I asked Anthony Radchenko, CEO of AirAdvisor, a company that helps air travelers recover compensation from airlines, to explain what this new rule could mean for passengers.

What was your initial reaction when you heard about this proposed DOT rule?

It’s definitely a positive move and well overdue. For a long time, the U.S. has lagged behind other countries like those in the EU, Brazil, Canada, and even Turkey, which already have regulations protecting passengers from flight disruptions. U.S. airlines received a lot of taxpayer money during the pandemic and have been problematic with refunds, so this rule feels necessary.

The DOT is proposing that airlines pay between $200 and $300 for domestic delays of three hours or more. Do you think that’s enough?

Not really. I think it’s a bit low, honestly. The regulation sets a good standard, but it’s based on the EU amounts, which haven’t kept up with inflation. I think it should be increased to account for inflation.

By how much?

For a delay of three hours or more, $450 to $500 seems more reasonable. Two hundred dollars doesn’t go very far, especially if you miss a connecting flight or a cruise that you might have booked through the airline. Those kinds of disruptions can cost passengers thousands of dollars. And if a flight is delayed until late at night, passengers may be stuck paying a lot for a taxi because public transportation might not be running. Keep in mind that cash compensation should compensate for inconvenience and distress and not fall short of covering out of pocket expenses.

You mentioned the European consumer protection regulation, EC 261, which went into effect in 2003. How has that affected air travel in Europe?

The EU regulation has been a positive development for passengers. It has definitely reduced the number of delays over three hours and cancellations.

There’s no specific data on its impact on flight networks overall, but it has made flying more punctual in Europe. Airlines are now taking more precautions to avoid delays. They are investing more in parts warehouses, keeping crews on standby, and just doing better planning in general.

How do you think the airlines are going to respond to this new DOT rule?

Airlines are going to fight to water down this regulation as much as possible. Based on what’s happened in Canada, I expect they will try to claim safety issues to get out of paying compensation, even if the issues aren’t really safety-related.

They’ll also probably lobby to prevent passengers from recovering legal fees, because they know that will make it harder for people to enforce their rights. If passengers have to pay their own legal fees and the compensation is only a few hundred dollars, it just wouldn’t be worth it for them to go to court. For this reason I believe regulation shall specifically provide passengers the right to recover attorney’s fees if airlines fail to comply with these rules.

Airlines are already saying this rule is going to cause airfares to go up. Do you think it will?

Some low-cost airlines have added a surcharge to their tickets to cover potential compensation payouts, but it’s really insignificant — something like $2 per ticket. And for traditional airlines, the surcharge would be even less noticeable. I don’t think people would mind paying a few extra dollars if it meant their flights were more likely to be on time.

So, looking ahead, how do you think this rule will change the flying experience in the U.S.?

I think we will see a lot more punctuality. There is a noticeable difference between flying on a U.S. airline versus an airline from the UK or Europe. This rule could help eliminate that disparity. Even if it’s a weakened version of what the DOT is proposing, it’s still a step in the right direction.

You’ve been critical of the airlines’ lack of accountability, particularly during the pandemic. Do you think this rule could address some of those concerns?

Absolutely. What happened with the refunds during the pandemic was ridiculous. Airlines basically told people to sue them if they wanted their money back.

This rule would give passengers some recourse when airlines fail to meet their obligations. It’s not just about the money; it’s about holding airlines accountable for their actions.

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