(UNITED STATES) The U.S. Department of Transportation has officially withdrawn a Biden-era proposal that would have required airlines to pay cash compensation to passengers for many airline-controlled flight disruptions, ending the rulemaking effort in August 2025. The change, confirmed under the Trump administration’s deregulatory agenda, means U.S. carriers will not owe set payments for delays and cancellations within their control. Consumer groups say the United States 🇺🇸 now remains out of step with Europe’s compensation model, while airlines argue the move avoids higher fares and operational strain.
What the dropped proposal would have required
Under the now-dropped plan, first unveiled in late 2023, carriers would have owed:
– Up to $300 for domestic delays of 3–6 hours
– Up to $775 for delays of at least 9 hours
The rule never took effect. Airlines for America (A4A), which represents most major U.S. airlines, opposed the measure throughout the process, saying it would raise prices, reduce access for price-sensitive travelers, and complicate operations. After the administration change in January 2025, the Department of Transportation pivoted, aligning with industry arguments and shelving the compensation regime. A4A welcomed the withdrawal, calling prior rules “unnecessary and burdensome.”
What protections remain in place
While the mandatory compensation scheme is gone, a separate consumer protection remains intact and active.
- In 2024, the DOT finalized a refund regulation requiring automatic cash refunds when:
- A flight is canceled or “significantly changed”
- Paid-for services (like Wi‑Fi) are not delivered
- Baggage is delayed beyond set thresholds
- That refund rule took effect on May 16, 2024, with full industry implementation by October 28, 2024.
- The Department is reviewing other consumer policies from the previous administration, including fee disclosure rules that required carriers to show baggage and seat selection charges upfront during booking.
How the landscape looks now — two-track system
According to analysis by VisaVerge.com, the DOT’s decision locks in a two-track system for U.S. fliers:
1. No guaranteed cash for most controllable delays or cancellations.
2. Stronger right to refunds when a flight is canceled or meaningfully altered.
- Consumer advocates worry this will leave families vulnerable during mass schedule disruptions.
- Airlines say greater flexibility and lower base fares serve travelers better than mandatory payouts.
How the U.S. differs from the EU
Passengers should not expect EU-style payments in the United States.
- In the European Union, lump-sum compensation applies to many airline-caused delays and cancellations.
- Under current U.S. law, those set payments are not required.
- Domestic carriers typically offer rebooking, and sometimes meal or hotel vouchers, during disruptions — but these are not standardized in federal law and vary by airline policy.
Practical refund rights under the 2024 rule
Refund rights do matter in practice:
- Travelers are entitled to a refund—usually back to the original form of payment—when a flight is canceled or significantly changed.
- The DOT has set clearer standards for what counts as a “significant change” and is evaluating which disruptions should trigger refunds going forward.
- Passengers can review rights, file complaints, and track new actions at the DOT’s Aviation Consumer Protection page: transportation.gov/airconsumer.
Industry priorities and ongoing review
Industry groups are pushing for broader rollbacks beyond the end of the compensation plan. Their priorities include:
– Narrowing when automatic refunds apply
– Scaling back public reporting requirements
– Revisiting family seating initiatives
Supporters of deregulation argue that reducing red tape will lower costs that otherwise feed into ticket prices. Consumer organizations counter that clear, enforceable standards are needed, especially during mass cancellations or when staffing and maintenance issues create cascading delays.
Policy shift and administration stance
President Biden’s team advanced a suite of consumer rules between 2021 and 2024, pairing the now-active refund rule with proposed fee transparency requirements and the shelved compensation plan. After President Trump took office in January 2025, the DOT shifted, saying some measures exceeded agency authority and imposed new costs without clear benefits.
DOT officials emphasize:
– A focus on removing requirements they view as duplicative or burdensome
– Retaining the refund framework as a key protection
Quick takeaways for travelers
Here’s what this means for travelers today when flights go off schedule:
- There is no mandatory cash compensation for delays or cancellations within a carrier’s control. Any goodwill payments are at the airline’s discretion.
- Airlines generally offer rebooking and may provide meal or lodging vouchers, but these are not guaranteed by federal law.
- For flights that are canceled or “significantly changed,” airlines must issue automatic refunds under the 2024 rule.
- Paid extras not delivered (e.g., onboard Wi‑Fi) are refundable under the same rule.
- If fee disclosure rules are weakened, shoppers may have a harder time seeing the true, all-in price at booking.
Practical advice for families and business travelers
- Check each airline’s customer service plan before buying for voucher, hotel, and rebooking policies during controllable disruptions.
- Keep receipts for out-of-pocket expenses after misconnects or late-night cancellations; documentation helps when requesting reimbursement or credits.
- If the airline denies a refund you believe is due, file a complaint with the Department.
Arguments from both sides
- Airlines say removing the compensation mandate will prevent higher fares and keep more routes viable, including thin domestic markets. They also claim a cash regime would divert resources from reliability programs.
- Consumer advocates say promises of lower fares have been made before and maintain that firm compensation standards would better incentivize airlines to fix controllable problems before they escalate.
What to watch next
The Department has not indicated plans to revive the discarded compensation rule under current leadership. Ongoing reviews focus on:
– The scope of refund triggers
– The status of fee transparency
For now, the rules that matter most to U.S. fliers are the refund protections that took effect in 2024 and the airline-by-airline promises listed in customer service plans.
The Biden-era proposal to require cash compensation for airline-controlled flight disruptions is off the table. Refund rights remain, but passengers should plan trips with the current limits in mind—and watch for future rule changes.
If you believe your rights were violated, contact the DOT’s Aviation Consumer Protection Division via transportation.gov/airconsumer. Complaints help regulators detect patterns — from repeated refund denials to misleading fee displays — and can prompt enforcement or policy changes even during a period of deregulation.
This Article in a Nutshell
In August 2025 the U.S. Department of Transportation withdrew a Biden-era proposal that would have required airlines to pay cash compensation for many airline-controlled flight disruptions. Proposed payouts—never implemented—ranged up to $300 for 3–6 hour domestic delays and $775 for delays of nine hours or more. After the January 2025 administration change, the DOT sided with industry concerns about added costs and operational strain. However, a 2024 DOT refund regulation remains active: automatic cash refunds are required for canceled or significantly changed flights, undelivered paid services, and qualifying baggage delays. The decision creates a two-track system: no mandatory compensation for most controllable disruptions, but preserved refund rights for cancellations and major schedule changes. Consumer groups say the move leaves the U.S. out of step with EU protections, while airlines argue it prevents higher fares and preserves network flexibility. Travelers should check airline customer service plans, keep receipts for expenses, and file DOT complaints when refunds are denied as the agency continues reviewing other consumer rules.
