Proposed U.S. DOT Compensation Rules: Analyzing What it Means for Passengers & How it Compares to Other Countries

Written By Joanna Teljeur

7 minutes read
Last Updated: December 13, 2024

When it comes to passenger rights and protections, the United States lags behind Europe by 20 years! Countries including Turkey, Canada, and South Korea have also enacted regulations over the last decade, providing compensation to flight-disrupted travelers.

Now, the U.S. DOT is stepping up. In December 2024, they proposed compensation rules that would provide U.S passengers with some relief for delayed and canceled flights caused by airlines. But, what does this mean for passengers, and how do the proposed rules compare to other countries? Let’s take a look.

What are the Proposed Compensation Rules?

The proposed DOT rules would require airlines to provide financial and material compensation to passengers facing delays and cancellations.

Specifically, the rules would give US passengers the following compensation amounts when the disruption is caused by the airline:

• $200-$300 for domestic delays of at least 3 hours but less than 6, 
• $375-$525 for delays of at least 6 hours but less than 9, and 
• $750-$775 for delays of 9 hours or more. 

Additionally, carriers would also be required to:

• Offer free rebooking when the passenger’s flight is cancelled, or 
• Their departure is delayed three hours or more domestically or six hours or more internationally, or 
• If a delay results in a missed connection. 

The DOT would also require carriers to provide passengers with a rebooked flight, even if that means using codeshare partners. If no flights are available within 24 hours, they would have to find a flight with another airline that has a commercial agreement with them.

Finally, the proposal would make airlines responsible for providing meals, overnight accommodation, and related transport, if the cancellation or delay causes you to wait at the airport for an extended period of time. The DOT is still working out the details on what would be provided, when, and how often.

Would all flight disruptions lead to financial compensation?

You wouldn’t be able to get money or assistance from the airline for all delays and cancellations. Only flight disruptions that could have been avoided would be eligible. This is how it works in the EU, and it’s a common source of frustration for anyone hoping to receive a payout, and here’s why.

Most flight disruptions are caused by weather-related issues. As a matter of fact, the FAA found that 74.26% of delays more than 15 minutes were caused by bad weather. But this is one event that would exempt carriers from compensating you.

Other situations that would eliminate your chances of getting money and assistance from the airline, based on the proposed rules, include airport disruptions like strikes, technical issues, and infrastructure shortcomings, as well as air traffic control restrictions or labor shortages.

Bottom line, you wouldn’t get cash back if your flight was delayed because of thunder or snow storm.

Why were these rules proposed now?

With only a few more weeks left for the Biden administration, you might be wondering why this has been introduced so late in the game. According to Pete Buttigieg, the proposal of expanded passenger rights is a response to the record-breaking demand for air travel.

Now that we are on the other side of the pandemic and air travel is breaking records, we must continue to advance passenger protections. This action we’re announcing is another step forward into a better era for commercial air travel—where the flying public is better protected and passengers aren’t expected to bear the cost of disruptions caused by airlines.

How the rules would affect travelers

If the proposed rules became law, any passenger flying in the United States would be protected, regardless of their nationality or place of residence, airline, or ticket price, but the exact coverage requirements have yet to be established.

Generally, the compensation rules would mean that US passengers could travel with much more confidence, worrying less about how to navigate lengthy delays and having to spend hundreds of dollars on meals, hotel, and taxis. It also means they could count on the airline to help with free rebookings, preventing them from being stranded at some airport far from home.

Not only that, but if the delay requirements are met, they could also get financial repayment for the inconvenience caused in addition to reimbursement of out-of-pocket expenses.

Here’s an example scenario to give you a better idea of how the proposed protections would work. We’ve based this on what happens in Europe and Canada during flight disruptions.

But don’t airlines assist passengers already?

Yes, they do. In fact, many airlines have committed to helping passengers who are stranded or left waiting for extended periods of time as long as the disruption was within their control. The trouble is, premium passengers or those with miles and loyalty status, are usually given priority, so economy class travelers are left to either fend for themselves or sleep on the airport floor.

The proposed material compensation would ensure that all passengers are treated equally when it comes to delays and cancellations, regardless of their seating class, loyalty, or miles.

Airline Compensation in Other Countries

Financial compensation for flight disruptions might seem like a revolutionary idea, but it’s actually been in practice in the European Union since 2004. Israel adopted their own scheme for compensation in 2009, and India moved to provide cash to passengers for delays in 2010.

Since then, Turkey, Mexico, Canada, and South Korea all enacted compensation policies for passengers faced with delays and cancellations. Payout amounts and criteria differ from country to country, but, as you can see in the table below, they all require airlines to provide some cash repayment as well as care and assistance. 

Note: All amounts have been converted to USDs, so the actual amounts may vary based on exchange rates.

Would this lead to an increase in airline ticket prices?

If the proposed compensation rules were implemented, some carriers might raise their ticket prices. In Europe, only a few low cost airlines responded to the compensation requirement by adding a small surcharge of around $2 to ticket prices as a way of offsetting payouts. Legacy airlines have done the same but the amount is barely noticeable.

Will the proposed rules be enacted?

It’s hard to say if the DOT’s compensation rules will ever become law. The Department has given the public 60 days to comment. After that, a final version will be drafted based on these comments, then reviewed to ensure it aligns with other government policies. Only at that point will the DOT finalize or withdraw it. Plus, we just don’t know if the new administration will support the rules.

Again, the public has until February 2025 to comment. You can do so at Regulations.gov.

No feedback