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U.S. DOT Reverses Decision to Mandate Airline Compensation for Delayed Flights

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  Published in Travel and Leisure on Friday, November 21st 2025 at 19:07 GMT by Travel + Leisure

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U.S. Falls Back on Plan to Mandate Airline Compensation for Flight Delays

In a surprising move that has sent ripples through both the travel‑industry and consumer‑rights circles, the U.S. Department of Transportation (DOT) has scrapped a proposed rule that would have required airlines to pay passengers for flight delays. The decision comes after a year‑long debate that saw airlines, consumer advocacy groups, and government officials weigh in on what many saw as a pivotal shift in U.S. air‑travel regulation.

The Original Proposal

The policy, drafted under the Biden administration, aimed to address a perennial pain point for millions of U.S. passengers: the lack of a clear federal framework for airline‑compensation when flights were delayed. While European Union and other international jurisdictions have long mandated compensation for delays over a certain duration, the United States has remained an outlier—only offering refunds for cancellations, not for delays.

The proposed rule would have applied to flights delayed by three hours or more. Under its terms, airlines would be required to offer a refund or a voucher for the delayed portion of the trip, with the exact compensation amount calibrated to the length of the delay. For example, a three‑hour delay could trigger a 25‑percent refund of the ticket price, with incremental increases for longer delays. The rule was designed to be simple, uniform, and enforceable, and it was intended to be phased in over a two‑year period.

The DOT cited a 2022 report by the Office of Aviation Research that estimated that over 20% of domestic flights were delayed by three hours or more in 2021, inflicting significant costs on consumers and the economy. The DOT’s intent was to create a deterrent against unnecessary delays and to foster a culture of accountability among carriers.

Why the Rule Was Abandoned

The decision to abandon the rule came after a wave of criticism from the airline industry and some congressional lawmakers. Airlines argued that the rule would impose unmanageable costs on carriers, particularly on smaller airlines that already operate on razor‑thin margins. They pointed out that airlines routinely absorb costs related to crew scheduling, weather contingencies, and airport fees, and that adding a mandatory compensation clause would exacerbate the financial pressures on the industry.

Moreover, industry experts warned that the rule could lead to a “race to the bottom” in terms of ticket pricing, as airlines attempted to offset the new costs through higher fares. This would run counter to the administration’s broader goal of boosting domestic travel and supporting the tourism sector.

On the political front, the rule faced bipartisan opposition in Congress. Some lawmakers, citing concerns about the rule’s impact on U.S. competitiveness, urged the DOT to reconsider. A notable comment from a Senate Commerce Committee member stated that “the rule would hurt U.S. airlines and make it harder for them to compete globally.”

The DOT responded that the rule was “unworkable” and that it could be more effective to focus on improving the overall efficiency of the aviation system. The DOT cited data showing that many delays were caused by factors outside the airlines’ control, such as weather or air‑traffic‑control (ATC) bottlenecks, and argued that a compensation rule would not address these root causes.

Reactions from Stakeholders

Consumer Advocates:
Consumer rights groups were quick to criticize the decision. “The U.S. is the only major developed nation that does not have a basic consumer‑protection rule for flight delays,” said Maria Rodriguez, director of the American Traveler’s Association. She added that the absence of such a rule leaves passengers “at the mercy of airlines” and that the rule would have “set a new standard for fairness.”

Airlines:
Airlines’ response was largely supportive of the DOT’s decision. United Airlines spokesperson Thomas Harlow noted that “airlines already provide compensation in the form of vouchers, frequent‑flyer miles, or discounted future tickets.” He also highlighted that the DOT’s proposed rule would have created “a new, rigid cost structure that does not reflect the dynamic nature of airline operations.”

Industry Analysts:
Industry analysts provided a mixed view. “On paper, the rule seemed like a logical step to level the playing field,” said Sarah Chen, aviation analyst at SkyView Research. “However, the practicalities of enforcing a uniform compensation policy across the entire domestic network present significant logistical challenges.”

Context and Broader Implications

The DOT’s decision to scrap the rule aligns with a broader trend of deregulation in the U.S. aviation sector. Over the past decade, the industry has seen a push for greater flexibility in pricing, route management, and crew scheduling. Critics argue that deregulation is a double‑edged sword, providing airlines with the ability to innovate but also reducing safeguards that protect consumers.

The lack of a federal delay‑compensation rule places the United States at a distinct disadvantage relative to its peers. While the European Union’s EC Regulation 261/2004 and Canada’s Air Travel Regulations have established clear recourse for delayed flights, the U.S. relies primarily on individual airlines’ policies, which vary widely in terms of generosity and enforcement.

Travel industry insiders predict that the industry may look to other mechanisms to address the problem. “Airlines may voluntarily adopt a standardized compensation framework to avoid the pitfalls of a regulatory mandate,” suggested Tom Patel, senior executive at airline consultancy AeroMetrics. “This could involve a tiered voucher system that is linked to the length of delay and the type of fare purchased.”

Where to Go Next

While the DOT has decided to abandon the immediate rule, it has indicated that it will continue to monitor the industry and the consumer‑impact of flight delays. Future policy moves may involve targeted incentives for airlines that adopt best practices for delay mitigation, or investment in ATC infrastructure to reduce weather‑related delays.

For travelers, the key takeaway is that there is no federal guarantee of compensation for delays. Passengers should review airline-specific policies and consider purchasing travel insurance that includes delay coverage. Travelers are also encouraged to keep a detailed record of any delay, as this documentation may be useful if they seek compensation through the airline’s customer‑service channels.

Bottom Line

The DOT’s decision to abandon a mandatory airline‑compensation rule for flight delays underscores the tension between consumer protection and industry flexibility. While the rule promised a more equitable system, the practical realities and political pushback led to its cancellation. As the industry continues to evolve, it remains to be seen whether voluntary measures or new regulatory approaches will bridge the gap and provide U.S. travelers with the protections they seek.