Trump Administration Scraps Plan for Airline Delay Payouts

The Trump administration is reversing course on an airline passenger compensation plan introduced during the Biden presidency. The Department of Transportation announced it will withdraw a proposal that would have required airlines to pay cash—ranging from $200 to $775—to passengers facing long delays caused by the airlines themselves. US carriers and their trade group, Airlines for America, welcomed the latest move, arguing that compensating for delays would ultimately inflate ticket prices, per Reuters.

"We are encouraged by this Department of Transportation reviewing unnecessary and burdensome regulations that exceed its authority and don't solve issues important to our customers," Airlines for America says. Along with scrapping the compensation rule, the DOT is reconsidering other consumer-oriented regulations from the Biden era. One such rule, requiring airlines and ticket agents to display service fees from the start, has already been paused due to an ongoing legal challenge. The agency is also looking at updating how flight cancellations are defined for refund eligibility and reexamining rules around advertising and ticket pricing.

Currently, US airlines are obligated to refund passengers only for canceled flights, not for delays. However, major carriers have voluntarily agreed to cover meals and hotel costs in cases of significant disruptions they cause. In contrast, regions like the EU, Canada, Brazil, and the UK have formal compensation policies for delayed flights. Meanwhile, the administration recently dropped a lawsuit—initiated late in Biden's term—accusing Southwest Airlines of running persistently delayed flights.