Dive Brief:
- The Department of Transportation rolled back a proposed rule Monday that would have required airlines to compensate customers stranded by carrier-caused cancellations or significant delays.
- The DOT issued a notice of withdrawal in September, but officially entered the withdrawal into the Federal Register Monday. Nixing the rule, it said, is consistent with Trump’s executive orders that direct federal agencies to “reduce regulatory burdens” and “identify and to repeal or to modify regulations that are unlawful or unauthorized.”
- Proposed during the Biden administration, the airline-caused disruption rule would have required carriers to provide passengers with cash compensation, meals, overnight lodging and related transportation expenses as well as rebooking customers on the next available flight.
Dive Insight:
While the DOT is nixing this proposed rule, consumers' right to a refund or rebooking remain intact.
“There has been a lot of confusion for travelers around this as people assume this was signed into law along with the right to a refund or rebooking from 2024, but the right to compensation was not,” Katy Nastro, a travel expert at Going, told CX Dive. “It has always been just that: a pro-consumer traveler idea.”
The DOT under the Biden-administration issued a final rule in April 2024 requiring airlines to provide customers prompt automatic cash refunds and defined the circumstances in which airlines must provide refunds. That rule remains intact.
The proposed rule would have offered compensation in addition to this refund and aimed to establish baseline standards for what airlines are obligated to provide to passengers stranded by delays and cancellations.
Its failure to move forward is no surprise, Nastro said.
Airlines For America, a lobby group for major airlines, expressed its disapproval of the proposed measure. Since assuming office, the White House under President Donald Trump has been rolling back Biden-era proposed consumer protections.
“The industry is not surprised even the ‘idea’ of this moving forward was done away with since airlines were pretty vocally against this proposed policy,” Nastro said. “What travelers need to be aware of is this does not mean your right to a refund or rebooking has been scrapped.”
