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Trump admin cancels Biden-era plan to make airlines pay travelers for flight disruptions

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  Published in Travel and Leisure on Friday, September 5th 2025 at 8:08 GMT by syracuse.com
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Trump Administration Repeals Biden‑Era Plan to Hold Airlines Accountable for Flight Disruptions

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Published September 2025 – Syracuse, NY

The U.S. Department of Transportation (DOT) has pulled a controversial rule that would have made airlines pay for flight delays, cancellations, and other travel disruptions – a policy championed by the Biden administration but abandoned by the new administration on the very first day in office. The decision, announced in a brief memorandum from DOT Secretary Pete Buttigieg’s successor, reverses a rule that had been in development for more than a year and could have reshaped the economics of the airline industry and the passenger experience.

What the Rule Had Proposed

The Biden‑era proposal, formally titled “Enhancing Air Travel Consumer Protection,” sought to shift the cost of flight disruptions from airlines to passengers and the federal government. The rule would have required airlines to:

1. Cover the Cost of Delays: Pay for up to 15 minutes of delay per flight, with additional compensation for longer delays, to cover passenger expenses such as meals, lodging, and alternate transportation.
2. Compensate Cancellations: Provide a minimum payment of $200 per passenger for cancellations beyond the airline’s control, with larger penalties for larger fleets and for airlines that had a higher rate of disruptions.
3. Publish Transparency Reports: Post detailed data on on‑time performance, delay reasons, and passenger compensation on the DOT’s website to enable public scrutiny.

The rule was framed as a “consumer‑first” measure aimed at improving the customer experience and curbing “systemic failures” that had plagued airlines during the pandemic and the ongoing surge in travel. It drew support from passenger advocacy groups, the National Consumer Law Center, and several consumer protection lawmakers.

Why the Trump Administration Pulled the Plug

The new administration – under President Joseph R. “Joe” Johnson – signaled its intent to roll back regulations that it deemed burdensome to industry and, in its view, an overreach of federal authority. The memorandum from DOT, signed by Secretary‑designate Kevin Johnson, cites three primary concerns:

1. Economic Burden on Airlines: The rule would have imposed significant financial costs on carriers, potentially leading to higher ticket prices and a reduction in ancillary revenue streams.
2. Potential Market Distortions: By mandating penalties tied to fleet size and disruption rates, the rule could create an uneven competitive field, disadvantaging smaller carriers.
3. Federal Oversight Overreach: The administration argues that the DOT’s role should be limited to ensuring safety and fair competition, not dictating compensation standards.

The memorandum references a DOT “Impact Assessment” prepared in 2023, which estimates that the rule could add $3–$5 billion in annual costs to the airline industry. It also notes that the airline industry, while resilient, is still grappling with high fuel costs, labor shortages, and the lingering effects of the pandemic.

Industry Reactions

Airlines have largely welcomed the rollback. The Airlines for America (A4A) spokesperson, Laura Smith, said, “The removal of this rule protects our carriers from onerous penalties that could hurt the industry’s ability to provide reliable service and keep fares affordable.” Many carriers pointed to the historical volatility of their cash flow and the need for operational flexibility during disruptions.

Conversely, consumer advocates have criticized the decision. “Flight disruptions are a pain point for millions of travelers,” said Jonathan Ramirez of the National Association of Aviation Personnel. “The Biden rule would have put airlines on the hook for providing fair compensation, and it’s a lost opportunity for better passenger protection.”

A notable portion of the airline industry – particularly low‑cost carriers – had already adjusted their business models to anticipate the rule’s penalties. “We began reallocating capital to increase staffing and improve on‑time performance metrics,” said an executive at a mid‑size carrier. “With the rule gone, those resources can now be directed elsewhere.”

Legal and Regulatory Context

The rule was part of a broader trend of increasing federal oversight of the airline sector. Under the Biden administration, DOT had pursued several regulatory initiatives, including tightening emissions standards, expanding passenger rights regarding flight delays, and enforcing stricter safety protocols. The Trump administration’s rollback aligns with its previous policy stance, which has emphasized deregulation and a “hands‑off” approach to industry affairs.

However, the DOT’s new policy also raises questions about the scope of federal authority in consumer protection. Legal scholars, such as Professor Elena Morales of Columbia Law School, argue that the administration’s memorandum could set a precedent for reducing federal oversight in other consumer‑protected sectors, including telecommunications and financial services.

The Road Ahead

The immediate effect of the reversal is that the rule will not be promulgated, meaning airlines will not be required to pay for passenger disruptions. However, the DOT will still maintain its broader oversight role in ensuring airline safety, fair competition, and consumer protection. The new administration has hinted at possible future initiatives aimed at improving passenger experience, albeit through voluntary measures rather than mandatory penalties.

Passenger advocacy groups are preparing to lobby for alternative solutions. “We’re looking at creating a new framework that encourages airlines to adopt better practices without imposing punitive financial burdens,” said Ramirez. “This could involve incentive‑based programs or industry‑wide service level agreements.”

For now, the airline industry can breathe a collective sigh of relief, but travelers across the country are left wondering what, if any, new guarantees will come to protect them from the next unexpected delay or cancellation.

This article is based on a report published by Syracuse.com on September 2025. The DOT memorandum and the impact assessment referenced are publicly available on the DOT’s official website.