New U.S. Passenger Protection Rules will Drive Up Fares: Airlines, IATA

Crowded airport. Image courtesy of Seattle-Tacoma International Airport.
Image courtesy of Seattle-Tacoma International Airport.

U.S. airlines and the International Air Transport Association (IATA) are criticizing  U.S. President Joe Biden's new proposed legislation mandating airlines to provide financial compensation to travellers for flight delays and cancellations, saying it will raise airfares and not solve issues causing delays.

As previously reported by Open Jaw, the U.S. Transportation Department is now working on drafting the new rules that would ensure that air travellers stranded for reasons within an airline’s control - including mechanical issues or lack of a crew - would be compensated for their meals and hotel rooms.

The new passenger protection regulations in the U.S. are expected to come into effect later in 2023.


"Managing delays and cancellations is very costly for airlines. And passengers can take their loyalty to other carriers if they are not satisfied with service levels. 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,” said Willie Walsh, IATA’s Director General.

Additionally, IATA says it is concerned the regulation could raise "unrealistic expectations among travelers that are unlikely to be met."

IATA notes that most situations not covered by the new rules include weather-related cancellations, which are responsible "for the bulk" of air travel delays, as well as air traffic control shortages which affected U.S. flights in 2022 and remain an issue in 2023, among other non-airline-related cancellations. As reported by Flight Global, about 63 per cent of disruptions in 2023 have been due to weather.

"While the DOT carefully notes that airlines will only be responsible for compensating passengers for delays and cancellations for which the airline is deemed responsible, severe weather and other issues can have knock-on effects for days or even weeks later, at which point it can be difficult to impossible to isolate a single causal factor," IATA stated.

IATA also stated that "experience shows that punitive regulations like this have no impact" on the level of flight delays and cancellations. The Association cited a report on the European Union's level of flight cancellations after implementing further passenger protection rules, which found that cancellations doubled from 67,000 in 2011 to 131,700 in 2018, while delays rose from from 60,762 to 109,396 in the same time frame.

"Instead of singling out airlines as this proposal most assuredly does, the Biden Administration should be working toward ensuring a fully funded FAA, a fully staffed controller workforce, and completing the rollout of the decades-delayed FAA NextGen air traffic control modernization program," said Walsh.

U.S. Airlines

Airlines for America (A4A), which represents most major U.S. airlines, echoed similar sentiments, highlighting that more than half of cancellations in 2022 were due to weather.

“Carriers have taken responsibility for challenges within their control and continue working diligently to improve operational reliability,” A4A said. “This includes launching aggressive, successful hiring campaigns for positions across the industry and reducing schedules, notably in the busy Northeast region, in response to the FAA’s staffing shortages.”

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