DOT LAUNCHES RULEMAKING ON CASH COMPENSATION AND RELATED CONSUMER PROTECTION REQUIREMENTS
January 6, 2025
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On December 5, 2024, DOT announced a long awaited and significant new rulemaking initiative by issuing an Advance Notice of Proposed Rulemaking (“ANPRM”), titled “Airline Passenger Rights.” The ANPRM proposes changes which would require airlines, when an airline-caused disruption occurs, to pay passengers cash compensation, rebook affected passengers free of charge on the next available flight, and cover expenses (i.e., meals, overnight lodging, related transportation). Noting that other countries have adopted similar consumer protections compensating passengers when an airline causes a disruption, DOT seeks public comment on several topics including when to consider a cancellation or delay within an airline’s control. The Department is exploring how to determine which delays and cancellations are controllable, yet doing so presents a herculean task when flight disruptions are often caused by multiple events. Airlines are encouraged to submit comments to inform the Department’s definition of “controllable” cancellations or delays. Under the current definition, the below requirements would apply “if a delay or cancellation involves any factor or event within the control of the airline, including its operating partner, and their employees, subcontractors, or other persons working on their behalf.” In other words, controllable cancellations and delays would be defined as those due in whole or in part to any circumstance within an airline’s control.
The Department foresees that this rulemaking will apply to U.S. and foreign air carriers, but the ANPRM specifically asks for comments on which carriers should be covered if DOT were to issue this rule. DOT’s current position is that covered entities would include “certificated carriers, commuter carriers, and foreign air carriers operating to, from, or within the United States, conducting scheduled passenger service with at least one aircraft having a designed seating capacity of 30 or more seats.”
The European Union (“EU”) and Canada have similar regulations on the books requiring services and compensation like those proposed in the ANPRM. For example, the EU and Canadian regulatory regimes limit entitlement to compensation if the passenger already received compensation for the same delay or cancellation in another jurisdiction. DOT seeks comments on whether the Department should adopt similar limits on compensation when the laws of multiple jurisdictions apply. To guarantee that passengers can accept a reimbursement, service, or compensation on an informed basis, the Department may require airlines to notify passengers of any differences in value owed under DOT requirements as compared to a foreign jurisdiction’s compensation regime when the laws of multiple jurisdictions apply. Doing so would require airlines to differentiate the value owed under DOT-imposed requirements from the value owed under the law of a foreign jurisdiction so that passengers can make informed decisions.
DOT is considering the following requirements when there is a cancellation or lengthy delay due to any circumstance within an airline’s control:
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Pay at least $200 in cash compensation: The ANPRM contemplates a tiered approach where compensation could range from $200-$300 for domestic delays of at least three hours but less than six, $375-$525 for delays of at least six hours but less than nine, and $750-$775 for delays of nine hours or more.
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Rebook at no additional cost on the next available flight: DOT may require airlines to offer free rebooking when a passenger’s flight is cancelled, their departure is delayed three hours or more domestically or six hours or more internationally, or if a delay results in a missed connection. Airlines could further be required to rebooking passenger on the next available flight operated by the airline or its branded codeshare partners, and if flights on those airlines are not available within 24 hours, then any carrier that the airline has a commercial agreement to transport passengers.
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Cover meals, overnight lodging, and related transportation expenses: Under the ANPRM, airlines could be obligated to provide meals, overnight lodging, and transportation for passengers and may also be required to automatically pay a minimum reimbursement for each service an affected passenger is entitled to receive when an airline does not provide such services upfront.
Please note that this rulemaking is independent from DOT’s refund rule. It is unclear whether this rulemaking will proceed once President-elect Trump takes office in January 2025. Comments are due by February 10, 2025, yet the ANPRM notes that late-filed comments will be considered to the extent practicable.
This Aviation Blog is intended to keep readers current on developments in the law. It is not intended to be legal advice. If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com; Jay Julien at 202.659.6648 or jjulien@eckertseamans.com, or Tyler Myers at 202.659.6642 or tmyers@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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