By David Shepardson

CHICAGO (Reuters) – The U.S. Department of Transportation (USDOT) announced on Thursday it is seeking public feedback on whether airlines should be mandated to provide cash compensation to passengers for disruptions caused by carriers.

The USDOT is offering a 60-day comment period as it begins the rulemaking process but has not proposed any formal regulations yet. The decision to pursue these regulations will fall to President-elect Donald Trump's administration, which has expressed intentions to reduce regulatory oversight broadly.

U.S. Transportation Secretary Pete Buttigieg commented, "It's very reasonable to say you have some compensation for your time and some protections," during an aviation event interview. He contended that implementing compensation rules for delays could alter the economic motivations of airlines positively.

In May 2023, President Joe Biden declared that his administration would formulate rules to require compensation for disrupted flights and indicated that a proposal would be forthcoming by the end of 2023.

Countries like Canada, Brazil, the European Union, and the United Kingdom have established airline delay compensation regulations. Buttigieg specified that the USDOT does not plan to simply adopt European models.

Currently, the USDOT is seeking input on potential compensation ranging from $200-$300 for domestic delays of at least three hours, $375-$525 for six-hour delays, and $750-$775 for nine-hour delays.

Airlines for America—a trade group representing major carriers such as American Airlines, Delta Air Lines, and United Airlines—strongly opposed the proposal. The group argued that additional cash compensation would likely increase ticket prices, deeming the move a poorly conceived attempt to re-regulate the airline industry.

Although airlines are required to refund fares for canceled flights, they are not obligated to compensate passengers for delays. However, major airlines have voluntarily agreed to cover expense-related costs like meals and hotel stays when significant disruptions occur.

Buttigieg expressed that the USDOT has worked hard to encourage airlines to improve their treatment of passengers. "I'm not terribly surprised that when we require them to treat passengers better they're going to fight back," he noted.

The USDOT is also reviewing whether to adjust compensation obligations for smaller airlines, explore the requirement for compensation if passengers are notified in advance, and determine if airlines should cover expenses after disruptions.

Additionally, considerations include mandating airlines to rebook customers on the next available flights or use competitors if flights are unavailable for 24 hours.

It remains uncertain whether the USDOT would need further Congressional authority to enforce such compensation regulations.

Buttigieg has adopted a proactive stance on airline investigations and stated that the USDOT aims to finalize regulations on family seating and wheelchair access by January 20.