In a sweeping move affecting air travelers nationwide, the Donald Trump administration has officially scrapped a proposed rule that would have required airlines to pay cash compensation to passengers for delays or cancellations caused by carriers.
The rule—initiated under the Joe Biden administration in December 2024—would have imposed payments ranging from about $200–$300 for domestic delays of three hours or more, up to $775 for the longest disruptions. Airlines also would have been required to cover meals, lodging, transportation and free rebooking when the carrier was at fault.
In its withdrawal filing, the Transportation Department asserted that it lacks the statutory authority to impose such mandatory cash payments and concluded that the rule “would impose significant costs on airlines, and potentially consumers.” The administration said it prefers to let airlines “compete on the services and compensation that they provide” rather than face minimum federal mandates.
Consumer advocates have voiced alarm. A coalition of 18 Democratic senators last month urged the administration to preserve the protections, arguing that families forced to change plans through airline error deserved guaranteed relief.
Some in the airline industry welcomed the decision, saying the proposed mandate would hike costs and ticket prices. With the rule officially off the table, U.S. airline passengers will continue to rely largely on voluntary airline policies — rather than guaranteed federal compensation — when disruptions occur.
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