Inside The Political Theater Of President Biden’s Airline Compensation Plan

On Monday, President Biden announced plans for a new regulation requiring airlines to pay cash compensation to passengers for controllable flight delays and cancellations – on top of refunds and expenses. And yet the stocks of major airlines were flat to up on the day.

This new rule would represent a significant shift in power to consumers and a huge expense to airlines. It would also give unions, especially pilot unions and mechanics unions, tremendous power – because their members exercise discretion that can delay flights for small details, which could cost tens of thousands of dollars per flight in many cases if this comes to fruition. And yet,

  • We get word that details on the rule will ‘come this year’ rather than an actual Notice of Proposed Rulemaking

  • The only concrete step being taken right away is an update to a Department of Transportation dashboard pointing out that airlines generally do not commit to providing compensation (on top of expenses for hotels, meals) during delays and cancellations that are deemed their fault.

The Administration has chosen to announce this now, even before they have a rulemaking ready. That is timed for political effect, and again they’ll have a news cycle later in the year actually releasing a proposed rule.

What the timing means is that there’s a strong likelihood we do not see this rule happen unless President Biden is re-elected because promulgation of a final rule would quite likely not occur prior to the end of the President’s first term, which comes perhaps just a year after a proposed rulemaking is published.

There still needs to be a public comment period on the as-yet released proposed rule. Then DOT will have to consider each comment, respond, and update its rule based on comments received.

This is a middle class pocket book issue which will certainly poll well, aside from the merits of the issue. And it’s better as an issue to promise to work on if re-elected than as an issue to have solved prior to re-election. In much the same way this lines up with the strategy on hotel resort fees, which is to call for congressional action rather than to take action.

In both cases, there’s at least some question as to the legality of unilateral action on the part of the President’s administration. DOT does have broad regulatory authority under its mandate for safe and efficient transportation, and to protect consumers from unfair and deceptive practices. It’s not entirely clear that long-standing aviation practice to cover costs but not provide additional compensation as a matter of law in the event of a controllable delay is itself unfair and deceptive, when the system has very much been designed to encourage delays rather than take risks.

An administration that seeks to reduce the actual delays experienced by passengers, which is an issue that will only grow in the future as passenger numbers and flights rise, should focus on the actual throughput of the system: more gates, runways and taxiways at congested airports; more air traffic controllers; better technology (and management) for the air traffic control system.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »


  1. Sorry totally disagree with you. EU261 is one of the greatest things come out of Europe since the baguette. We need it here. You’re absolutely powerless as a consumer with the market being as consolidated as it is, few airlines, hubs being hyper concentrated. Make ’em pay

  2. The entire platform of the democrat party is based on grievance politics and emotions.

  3. This would be a debacle. Airlines won’t hold anymore for connecting passengers. Airlines will be hyper focused on their schedule to the detriment of elite pax. Keep in mind if your first flight is 30 min late and you miss a connection and get there 12 hours later in europe that’s not compensation. You were delayed but your planes weren’t over the max amount

  4. If you impose the same EU rules where they have 90 minute turns vs 40 min in the US the airlines will cut scheudules and double fares. And Joe Biden can say I DID THAT!

  5. Gosh Chad, unlike the GOP, whose last candidate started his campaign by tarring an entire nation as murderers and rapists, and went downhill from there? Look it’s all theater playing to the uninformed and credulous, not that I think so many people are even listening anymore. It’s just that some have a lower bar than others. One in particular seems to be bottomless in his fear and anger at the world.

  6. If you look at flightaware on any given day — except one with bad weather — you know that this is a solution in need of a problem. The US airlines now do a good job getting people where they need to go at a fair price. Certainly compared to the much smaller airlines in the rest of the world. US airlines now typically average zero daily cancellations. The (regulated) free market is working well now. We should leave it alone. The problem is that perception of airline reliability does not match the actual reliability — no doubt due to the fact that unusual incidents (like the Southwest Xmas meltdown) are endlessly hyped.

  7. Will the FAA pay the compensation when the delays are due to the FAA failure to adequately staff the air traffic control system? Only the government is allowed to fail at their job without consequence.

  8. Agree it’s all politics. Agree if such a rule was promulgated, it would be exceeding the the authority delegated to the FAA by the legislature.

  9. Relax. No US airline is going to pay anybody. This is just another desperate virtue signal by the flailing Biden admin.

  10. I wonder how this rule would be impacted if Chevron is overruled by the Supreme Court, which seems likely.

  11. Not sure what’s the point of this post: even a 5th grader knows that laws and regulations are a political activity by definition.

    But it’s nice to see politicians for once take the side of the public and not the corrupt lobbyists like you.

    Airlines routinely over schedule airports and routes because the cost of cancellation or delays is so minimal it’s a rounding error to them. Make them pay, and you will see results: the same exact thing happened with the tarmac delay rules, which made it worth for airlines to coordinate with airports and dedicate teams to solve the issue they had ignored before when it was cheaper for them to simply imprison people with no water and food for 8 hours on the tarmac.

  12. @Malte +1

    I don’t care about parties but the consumer has to be protected. A promise was made to get the passengers from point A to B in a certain time for a PRICE. And when that promise was not fulfilled, some sort of formal compensation mechanism has be in place. These same travel companies that collect $$$ billions of taxpayers’ monies every decade or so – if they can’t do the job, they shouldn’t be in business.

  13. How about the DOT and FAA focus on their core responsibilities first before they start political pandering?!

  14. There will be so many carve outs that compensation will almost never be paid out. All delays will be flagged as mechanical, whether (act of God) or safety related issues or whatever exception the government provides.

  15. It amazes me the number of people who immediately cry for government involvement whenever there’s a slight inconvenience in their lives. They never understand the old axiom, “A government big enough to give you everything you want is a government big enough to take from you everything you have.”, attributed to Gerald Ford.

  16. Chad,

    The entire platform of the country is based on grievance politics and emotions, and it has been since before 1789 and 1776.

  17. Then we can apply this to other Business sevices.

    IRS refund takes longer then it should IRS has to pay a PENATLY

    Post office takes too long to deliver mail . PO hast o pay a PENALTY

    Cable Company loses service . they have to pay a PENALTY.

    Cell phone service drops calls. They have to pay a PENALTY.

    Toll booths take too long to let cars through . They have to pay a PENALTY.

    LOVE HOW THE US GOVE is going to FORCE a business to PAY A PENATLY.

  18. @ tomri — Excellent list of ideas. Why shouldnt companies pay us for wasting our time? If there is a penalty to pay, then maybe service will improve.

  19. I would like to see EC261 and “Rule 240” codified into law together with a clause prohibiting airlines from passing along the costs to passengers or raising fares in response.

Comments are closed.