The U.S. Department of Transportation (DOT) has officially withdrawn a Biden-era proposal that would have required airlines to pay cash compensation and cover meals or hotel stays for passengers when flights are delayed or canceled due to the airline’s own fault.
This now-scrapped rule, finalized in late 2024 under the Biden administration, was designed to mirror protections in Europe by mandating payments of $200 up to $775 (depending on the length of the delay) to each affected passenger, along with meal vouchers and hotel accommodations for overnight disruptions.
The reversal, announced by the DOT under the current administration, cites regulatory overreach and concerns about burdening airlines, effectively pulling back the planned compensation policy before it ever took effect.
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What Was the Proposed Compensation Rule?
The idea for stronger passenger compensation emerged after a series of chaotic travel seasons in 2022, when staffing shortages and technology meltdowns left thousands of U.S. travelers stranded.
In response, the Biden administration’s DOT sought public comment in 2023 and formally proposed new consumer protection rules by late 2024. The new rule would have been a sweeping, EU-style mandate: Airlines would owe cash compensation to passengers for “controllable” flight disruptions – those within the carrier’s reasonable control, such as mechanical breakdowns, crew shortages, or IT outages.
If a domestic flight was delayed by 3 or more hours, the carrier would have to pay at least $200 per traveler, with amounts scaling up for longer delays (capped at $775 for extreme delays over 9 hours).
For outright cancellations or overnight delays caused by the airline, carriers would also be obligated to provide meal vouchers, hotel nights, and transportation to the hotel as needed. Importantly, these compensations and services would be automatic, sparing passengers the hassle of lengthy claim forms – the intent was for airlines to proactively offer payouts and amenities whenever the airline was at fault for a major disruption.
This proposed U.S. rule took heavy inspiration from Europe’s “EU261” regulation, long considered the gold standard of air passenger rights. Since 2005, EU Regulation 261 has required European carriers to compensate and assist travelers during significant delays, cancellations, or denied boarding situations under the airline’s control.
Similar protections exist in Canada, Brazil, and the U.K., which have their own compensation regimes for flight disruptions.
Had the U.S. rule been implemented, American travelers would have finally seen comparable rights — essentially joining those international travelers who routinely receive cash payouts and covered expenses when their airline is to blame for a ruined trip.
DOT Scraps the Rule Amid Industry Pushback
Just months after it was introduced, however, the compensation rule has been shelved. The DOT – now led by a new administration – announced in early September 2025 that it plans to withdraw the proposed regulation entirely.
President Donald Trump’s administration explicitly stated it would drop the plan put forth by the previous administration to mandate airline compensation for delays and cancellations.
The move was framed as aligning with “department and administration priorities,” with officials arguing that some of the Biden-era consumer rules exceeded the agency’s authority without a direct mandate from Congress.
In other words, regulators contended that requiring airlines to pay for delay inconveniences was a step too far beyond what U.S. law currently demands.
Airlines had fiercely opposed the compensation proposal from the start. Industry executives warned that mandatory payouts would impose heavy costs and inevitably lead to higher ticket prices for consumers.
The leading trade group, Airlines for America, applauded the DOT’s reversal, calling the would-be rule “unnecessary and burdensome regulation” and suggesting it “exceed[ed] [the DOT’s] authority”. US carriers also insisted that enforcing such compensation would not truly solve operational problems and might create new administrative hassles.
By scrapping the rule, the government removed what airlines saw as a looming financial liability. “We are encouraged by [the] reviewing of unnecessary and burdensome regulations…that don’t solve issues important to our customers,” the Airlines for America group stated in response to the withdrawal.
Consumer advocates, on the other hand, are dismayed. The now-repealed compensation rule had been hailed as potentially the biggest win for U.S. air travelers in decades, one that would finally force airlines to take accountability and automatically make things right for passengers they inconvenience.
Its reversal is seen as a significant setback for passenger rights, effectively preserving status quo conditions. Former Transportation Secretary Pete Buttigieg, who championed the original rule, noted that the DOT’s leadership under the new administration includes a former airline lobbyist – implying the industry’s influence played a role in torpedoing the regulation.
Likewise, a former White House economic adviser pointed out that paying penalties might have pressured airlines to prevent delays in the first place, by addressing scheduling and staffing issues proactively.
In short, critics argue that the decision to pull back this policy rewards airlines by relieving them of new obligations, while travelers lose out on protections that are commonplace elsewhere.
Why It Matters for Travelers
The DOT’s about-face leaves U.S. passengers with no new rights to compensation when their flights are delayed or canceled for reasons within the airline’s control.
Unlike their European counterparts who can rely on generous EU-mandated payouts and assistance, American fliers must continue to depend on airlines’ voluntary goodwill or navigate the aftermath on their own. This regulatory rollback underscores how limited and inconsistent passenger rights remain in the U.S. for flight disruptions.
Travelers here are not legally entitled to meal vouchers, hotel stays, or any cash for lengthy delays caused by an airline’s failures – costs such as extra nights’ lodging or last-minute alternate transportation often come straight out of the passenger’s pocket.
All that U.S. law firmly guarantees is that if your flight is canceled and you choose not to travel, the airline must offer a full refund for your ticket. But if you accept a rebooking or if your flight is significantly delayed (but not canceled), there is no requirement that airlines compensate you for lost time or incidental expenses.
Many U.S. carriers did voluntarily commit in 2022 to cover customers’ hotel and meal costs for severe disruptions of their own making , after public pressure and a DOT “customer service dashboard” shamed non-compliant airlines. In practice, however, such gestures are not uniform or guaranteed – they vary by airline policy and situation, and travelers cannot enforce them by law.
The now-abandoned rule would have standardized these obligations across all airlines and given passengers a clear right to assistance. Its repeal therefore means American travelers remain vulnerable to bearing the brunt of airline-caused problems, with far fewer protections than passengers enjoy in Europe or Canada.
Consumer advocates say this gap could have real impacts on travel behavior and trust. If airlines aren’t on the hook for compensating delays, they may feel less pressure to avoid over-scheduling or to invest in robust staffing and IT systems – potentially leading to more disruptions (the very cycle the rule intended to break).
The decision also signals a broader shift in U.S. aviation policy: a preference for deregulation, focusing only on measures explicitly required by Congress and rolling back extra consumer protections introduced in recent years. For travelers, it’s a reminder that “air-passenger rights remain limited” in the United States.
Until new laws are passed, Americans will not see the kind of automatic compensation for flight delays that has become standard in other parts of the world. In practical terms, this “passenger rights” rollback means that when your U.S. flight gets delayed or canceled due to an airline issue, you might not get paid anything for the inconvenience – and you’ll need to be prepared to advocate for yourself or absorb the costs.
How U.S. Travelers Can Handle Disruptions Now
With no sweeping compensation rule on the horizon, what can travelers do to protect themselves? First, remember that you still have the right to a refund if your flight is canceled or significantly changed and you decide not to fly – this is a long-standing DOT rule.
Always request a cash refund (not just a travel credit) if an airline cancellation ruins your plans and you prefer not to accept a rebooking.
For delays, since airlines aren’t legally obligated to cover your expenses, it’s wise to know your carrier’s specific policies: some airlines will voluntarily hand out meal vouchers or arrange hotel rooms in certain delay scenarios, but others may not, and none are required to by law.
Don’t expect lavish accommodations or full reimbursement unless promised; any assistance given is essentially a goodwill gesture.
Because official support can be lacking, travel insurance and credit card protections have become travelers’ best fallback. Consider booking flights with a credit card that includes travel delay insurance or purchasing a separate travel insurance policy.
These can reimburse you for expenses like meals, lodging, and rebooking fees when you’re stuck due to a covered flight delay or cancellation. Keep receipts for any unexpected costs during a disruption, as your insurer or credit card might require documentation for claims.
It’s also helpful to stay proactive during irregular operations: get in line for a customer service agent and simultaneously try the airline’s app or phone support to reschedule flights – sometimes being early to rebook can save you both money and time.
Ultimately, the burden is back on travelers to plan for the worst. Without a federal compensation mandate, airlines will continue setting their own policies for delays, and these can change or be handled case-by-case.
The most reliable way to mitigate the financial risk of flight chaos is to be prepared: use protections you can control (insurance, credit card coverage) and understand your airline’s contract of carriage.
While U.S. carriers no longer face new compensation requirements after this policy U-turn, informed travelers can take steps to lessen the pain when disruptions strike.
In the absence of government-enforced passenger compensation, a bit of preparation and vigilance is key – American fliers, at least for now, “are once again left to fend for themselves”, hoping their next flight will indeed take off on time.