Earlier this month, President Biden announced plans for new regulations for the airlines to provide traveler compensation. When airlines are at fault for travel disruptions it would require them to cover expenses for meals and hotel rooms to stranded passengers.

This announcement is a part of broader consumer protections that the Biden administration has been promising – partly because of the unpredictable and chaotic summer and holiday seasons the domestic airlines have had recently. What are the implications for travelers and what could these rules (if they happen) look like for the various airlines? Let’s take a not-always-so-serious look at traveler compensation when the airline is at fault.

What made Biden push these new rules?

The Department of Transportation reported that almost 20% of all flights were delayed last year. Though the weather is frequently at fault, a lot of times it’s actually the airlines that are responsible. The rash of delays and cancellations last year were caused by technological failures, system outages and staffing shortages. Biden’s new rules would hold airlines’ feet to the fire and make them pay. This would be great news for travelers who often feel they’re at the mercy and whim of murky and confusing rationales for flight delays.

A return to better airline customer service?

Biden called out the airlines in terms of their lackluster to dismal customer service in these situations. The President said “I know how frustrated many of you are with the service you get from your U.S. airlines. Your time matters. The impact on your life matters.”

What would the new compensation rules mean for travelers?

Under the new rules, airlines would be required to provide passengers with assistance and compensation (cash money!) when the airlines are at fault for cancellations or delays of three hours or more. That’s key. The airlines themselves have to be at fault. Under this new set of rules the airlines can’t get around compensating passengers with vague regrets owing to “mechanical difficulties” or “last minute delays” that turn into cancellations.

How is this different from what the airlines already do?

All 10 major U.S. airlines already provide free rebooking or refunding the price of the ticket when flights are canceled. They also provide meal vouchers when passengers are left waiting for three hours or more. There’s not a ton of regulation around what these policies look like right now.

JetBlue offers $12 vouchers for airport vendors, and United gives vouchers for the “reasonable cost of a meal at airport food vendors.” United staff may offer these to you, or you might have to ask for them. Southwest also offers vouchers (of indeterminate value), but says if they are not available will entertain reimbursement costs.

In addition, if a delay (or cancellation) requires an overnight stay when you are away from home, the airlines all provide complimentary ground transportation and accommodation (hotel stays). The only airline not on board with this is Frontier Airlines – you get nothing! Under the new rules, customers would get cash for their inconvenience.

Inconvenienced travelers would be entitled to a payment in the form of cash, miles or travel vouchers. This is a big deal. Of course, this is also not yet set in stone and the airlines are going to push back big time. The airlines already have very slim margins, and are not known for “taking care” of Economy customers.

Which airlines already get a gold star for compensating customers?

It’s slim pickins out there. Two U.S. airlines offer traveler compensation. Alaska Air gives you “discounts” on future travel (meh).

JetBlue tells travelers via email if their flight qualifies for compensation. They then offer travel credit on a sliding scale up to $250, depending on the length of the delay and whether the plane had already boarded. Essentially, a delayed flight of at least 3 hours pays you.

Europe already offers compensation to airline customers

In case you’re wondering if Biden is crazy or out to get the airlines, we can look to Europe for some established precedent for traveler compensation.

Since 2004, in E.U. countries, flight cancellations or lengthy delays give passengers the right to either a refund or a replacement flight (with a few exceptions like political unrest). This policy covers all travelers regardless of nationality, and on all routes within the E.U. (even on U.S. airlines). On flights coming into E.U. countries, the rule applies only to E.U. carriers.

If flights take off late or are canceled less than 14 days before their scheduled departure, passengers are also entitled to up to 600 euros.

What’s the downside to the new airline rules for traveler compensation?

Well, none really if you’re a passenger. But the already beleaguered airlines aren’t going to like it too much.

Right now, the airlines usually put people up at mid-range hotel chains like Marriott or Hilton, or offer reasonable reimbursement for these additional incurred costs. But if the government starts to mandate payment for your inconvenience, we wonder what those vouchers and hotel stays might turn into. Are we looking at a future of a McDonald’s value meal plus a stay at a Motel 6? Oof.

Also, could putting this financial onus back on the airlines cause them to put more planes in the air when they might have otherwise pulled them for service?

We think it’s probably more likely that the airlines will simply inflate their prices to cover these new operational costs, passing the increases onto the traveler.

So where do the new rules stand right now for traveler compensation?

While the announcement offers passengers rights they’ve simply never had before, the proof is in the pudding. The Department of Transportation is still working out the specifics. Still up in the air: how much money goes to passengers and how claims will be handled. Translation: this is mostly a PR announcement right now. Implementation and compliance TBD.

We’d like to know what you think about the new policies. Do you think President Biden is doing us a solid? Or do you think these new rules might cause the airlines to take safety shortcuts or jack up their prices even more? Sound off in the comments below!

One Comment

  1. The airlines will find a way around any compensation to passengers. Apparently they do this now because my United flight to London Heathrow was delayed by more than 4 hours due to “mechanical issues” with the scheduled 11pm flight. We passengers were not offered vouchers for airport food. Instead, we received one 8-ounce bottle of room temperature water and a choice of 3 types of veggie chips. Some passengers, by name, received a boxed meal of some type but I don’t know why.
    To add insult to injury, the 4+-hour delay caused me to miss my connecting British Airways flight to Dublin, Ireland which was the part of a pre-paid roundtrip ticket gifted to me. With the help of my very experienced world-traveler daughter, I had made extra sure to allow at least 3 hours between scheduled arrival at Heathrow and departure of the connecting Dublin flight in case the United flight would be late and to allow time to get my bags & go through customers if necessary before getting to the departure gate for Dublin. But the United flight arrived so late that not only did I miss that pre-paid British Airways flight, but also the next scheduled flight that departed about 20 minutes prior to the United arrival at Healthrow! Thankfully, UK relatives came to my rescue to pay for a replacement because I had no money of my own, but that one-way ticket cost more than the roundtrip ticket had cost!
    Then, on my return from Heathrow to Newark, NJ via United as part of that pre-paid roundtrip ticket, that flight was more than an hour late leaving because of unavailability of a plane so we had to wait for an inbound plane to arrive and be serviced quickly. Yes, they apologized profusely while we waited but that was all.

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