U-Turn: Trump scraps airlines’ consumer compensation plan for flight delays, cancellations

*United States President Donald Trump cancels the compensation plan that would have guaranteed affected passengers cashback from $200 to $775 for airline-caused flight delays and cancellations, covering their meals, hotel stays, and rebooking

Gbenga Kayode | ConsumerConnect

As part of his administration’s recent far-reaching Executive Orders (EOs) for the aviation sector, United States (US) President Donald Trump has moved to withdraw a former President Joe Biden-era proposal that would have required airlines to compensate air passengers.

The Biden administration had introduced the proposal to cover affected travellers’ expenses for lengthy delays, or cancellations caused by carriers.

ConsumerConnect reports The White House, in a document posted Thursday, September 4, 2025, disclosed the Department of Transportation (DOT) planned to withdraw the notice.

US President Donald Trump

However, industry observers and consumer protection advocates have described President Trump’s attempt to discard the compensation plan as a major setback for consumer protection in the American country’s aviation ecosystem.

It us recalled the Biden administration announced the plan 2023, but not implemented before leaving office January 20, 2025.

The consumer compensation plan would have guaranteed passengers $200 to $775 for airline-caused delays

Travellers would also have received meals, hotel stays and rebooking at no cost.

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The overarching objective of the compensation plan was to address concerns from passengers, who got stuck due to disruptions within an airline’s control, such as mechanical failures or system outages.

The White House, in the document, also noted the US DOT’s withdrawal of the notice is “consistent with department and administration priorities.”

Incidentally, Transportation Secretary Pete Buttigieg, who had earlier championed the compensation plan alongside former President Biden, described it as a “game changer” for consumers.

Buttigieg had said back then: “When an airline causes a flight cancellation or delay, passengers should not foot the bill.”

The proposal again, was opened for public comment 2024, but never advanced to final implementation, according to USA Today report.

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Subsequently, the Trump administration late last week, announced the withdrawal of the plan in a regulatory notice from the Office of Information and Regulatory Affairs.

The administration cited alignment with its policy priorities and those of the Transportation Department in the aviation industry.

Airlines also oppose travellers’ compensation proposal

Airlines’ concerns

In regard to Trump administration’s move to scrap the consumer compensation plan, airlines reportedly contended that the scheme would increase their operating costs and ticket prices.

Besides, it also would have required airlines to provide meals, hotel accommodations, and rebooking assistance at no additional cost.

But consumer advocates had largely welcomed the plan, while airlines opposed it, warning it would drive up operating costs and ultimately, raise ticket prices for travellers.

Neither Airlines for America, the industry’s main trade group, nor FlyersRights.org, a leading passenger-rights group, had any immediate comment on the Trump move as of the time of filing the report.

It should be noted that similar rules have existed in some other climes, including the European Union (EU) since 2004, and the Nigerian Government intervention in addressing air passengers’ rights to compensation and replacement flights for long delays or cancellations.

A 2023 study also found those protections helped to reduce delays by putting more financial pressure on airlines.

Currently, US airlines are required to refund passengers for cancelled flights, but they have no obligation to provide compensation for delays.

Other airline givebacks

The DOT also disclosed on Thursday it is considering rescinding regulations issued under Biden in April 2024 that required airlines and ticket agents to disclose service fees alongside airfares to help consumers avoid unnecessary or unexpected fees.

The requirement was put on hold by the court pending an industry legal challenge, according to report.

The Department is also planning to reduce regulatory burdens on airlines and ticket agents by writing new rules detailing the definition of a flight cancellation that entitles consumers to ticket refunds, as well as revisit rules on ticket pricing and advertising.

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