The White House's Airline Compensation Rule Is Meant to Protect Passengers — but Will It Ultimately Lead to More Expensive Airfare?

The International Air Transport Association (IATA) is criticizing the White House’s plan to require airlines to provide compensation for significant flight delays and controllable cancellations, warning it may cause prices to actually increase.

“Airlines work hard to get their passengers to their destinations on time and do their best to minimize the impacts of any delays,” Willie Walsh, IATA’s director general, said in a statement. “Airlines already have financial incentives to get their passengers to their destination as planned. Managing delays and cancellations is very costly for airlines… The added layer of expense that this regulation will impose will not create a new incentive, but it will have to be recouped — which is likely to have an impact on ticket prices.” 

In addition to increased prices, IATA warned the proposed rule would create “unrealistic expectations” since cancellations or delays caused by weather would not be covered and other issues like air traffic controller shortages have led to flight problems.

The assessment comes as the Biden administration and the Department of Transportation (DOT) have proposed new rules to ensure passengers are compensated when a delay or cancellation is the airline’s fault, the latest push to hold airlines accountable. The redress could apply to compensation like meal vouchers, overnight accommodations, rebooking, and more.

The new rule-making would also define exactly what constitutes a controllable cancellation or delay.

A representative for the DOT did not immediately respond to a request for comment from Travel + Leisure. A representative for the White House deferred comment to the DOT.

These new proposed rules are the latest effort from the DOT to crack down on airlines. Last year, the department proposed a rule change that would require airlines to issue a refund if a domestic flight is delayed by more than three hours. And earlier this year, the DOT launched an online family seating dashboard highlighting which major U.S. airlines guarantee fee-free family seating for children who are 13 years old or younger.