DOT Proposes Airline Compensation Rule

The Biden administration's Department of Transportation (DOT) has proposed a new rule that would require airlines to provide cash compensation to passengers stranded due to airline-caused delays or cancellations, with payouts ranging from $200 for three-hour delays to up to $775 for nine-hour delays. The proposal also mandates that airlines rebook affected passengers for free and cover expenses such as meals and lodging. This initiative aims to enhance consumer protection in air travel, comparable to regulations in the EU, U.K., and Canada. However, the future of these proposals is uncertain, particularly with the possibility of a change in administration. Critics, including the airline industry's lobbying group, argue that such mandates could increase operational costs and impact service quality. The public has 60 days to comment on the proposal, which may influence its implementation.