USDOT Nixes Airline Cash Compensation Rule

The U.S. Transportation Department announced it will withdraw a proposal to mandate cash compensation for passengers during flight disruptions. Originally introduced by the Biden administration, the rules aimed to compensate travelers for delays. USDOT cited 'unnecessary regulatory burdens' as the reason for the withdrawal.

The U.S. Transportation Department announced on Friday its decision to formally withdraw a proposal aimed at obligating airlines to compensate passengers financially for flight disruptions caused by the carriers themselves. This proposal had been slated for implementation by the previous administration.

In December 2024, during the Biden administration, the department sought public opinion on new regulations. These rules would have required airlines to offer cash compensation ranging from $200 to $300 for domestic delays exceeding three hours and up to $775 for longer delays. However, the USDOT hinted in September that they were reconsidering the proposal.

On Friday, the department clarified its stance, stating that the proposed rules could pose 'unnecessary regulatory burdens,' and thus, decided not to move forward with their implementation. This decision marks a reversal of a consumer-friendly initiative envisioned by Biden's administration.

(With inputs from agencies.)