Airline lobbyists are celebrating today as a key Biden-era consumer-protection rule has been dropped by the Trump Department of Transportation.

Trump Administration Shelves Airline Cash Compensation Rule For Delays And Cancellations

Plans for cash compensation in the USA for airline delays and cancellations, much like in Canada, the European Union, and the United Kingdom, will not go into effect.

The Rule That Almost Was..

In May 2023, the U.S. Department of Transportation announced plans to require airlines to compensate passengers and cover expenses for controllable delays and cancellations. As Secretary Pete Buttigieg put it:

“When an airline causes a flight cancellation or delay, passengers should not foot the bill…

“Americans know the importance of a robust airline industry, which is why this country—and U.S. taxpayers — kept U.S. airlines afloat when the COVID pandemic threatened their very existence. 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.”

DOT then advanced the effort in December 2024 with an Advance Notice of Proposed Rulemaking that sought comment on a tiered cash compensation framework for airline-caused disruptions, plus free rebooking, meals, lodging, and local transportation. The contemplated tiers were broadly $200–$300 for 3–6 hour domestic delays, $375–$525 for 6–9 hours, and $750–$775 for 9+ hours, with comparable protections on international itineraries.

Separately, in April 2024 DOT finalized automatic refunds for cancellations, significant schedule changes, delayed checked bags, and paid ancillaries not delivered. That refund rule took effect on a staggered schedule and is distinct from the compensation proposal.

Trump Administration Explains The Reversal

On September 4, 2025, the administration confirmed the compensation proposal will be withdrawn. A DOT spokesperson said the department would focus on enforcing protections that Congress has mandated while reconsidering rules that went beyond statutory requirements. As stated:

“We will faithfully implement all aviation consumer protection requirements mandated by Congress, including the requirement to refund ticket prices to passengers in the case of airline canceled or substantially delayed flights when consumers choose not to travel. Some of the rules proposed or adopted by the previous administration, however, went beyond what Congress has required by statute, and we intend to reconsider those extra-statutory requirements.”

Industry groups opposed to mandatory payouts argue that the compensation scheme would impose costs and complexity without fixing operational problems. Consumer advocates counter that mandatory compensation deters avoidable delays and provides predictable care when disruptions occur.

EU261/UK261 Shows Consumer Protections Work

Europe’s passenger rights regime has required cash compensation since 2005, typically €250–€600 based on distance, along with care and assistance. UK261 mirrors these protections post-Brexit. Courts have limited the “extraordinary circumstances” defense so routine technical faults usually do not excuse payment. Evidence cited by Biden DOT indicated compensation rules in Europe have reduced the likelihood and duration of delays. Airfares remain competitive and carriers have not compromised safety under these regimes. In practice, the rules protect consumers without crashing the system. Look no further than airfare pricing and availbality within Europe…

What This Means For U.S. Travelers

This change in policy cancels a proposed rule that had not gone into effect, but does not change existing regulations.

• Automatic refunds remain in place under existing rules when you are owed a refund.
• No federal cash compensation is guaranteed for airline-caused delays and cancellations within the U.S. unless a carrier voluntarily offers it in its plan.
• On itineraries covered by EU261 or UK261, those regimes still apply when eligible, even if your carrier is U.S.-based (practically, that only applies to U.S. carriers when originating in the EU or UK)

I’m very hopeful (though not optimistic) that existing rules will continue to be enforced, even as the airline industry lobbies the administration heavily to cut back on consumer protections that help to hold airlines accountable. The idea that these regulations somehow compromise safety or are bad for consumers is not supported by evidence.

CONCLUSION

The Trump administration will not carry forward the Biden-era cash compensation plan for delayed or cancelled flights. Refund rights continue, but the United States remains well behind Europe on guaranteed compensation and care when airlines cause major disruptions. But who has time for consumer protections when the Department of Defense has to be changed to the Department of War to protect the Gulf of America, and de minimis tariffs have to be collected such that many foreign postal services are now refusing to send packages to the USA? #priorities