If You Get Stranded by an Airline, the Dept. of Transportation's New Rule, When Implemented, Will Require Compensation

Mark Hake

On March 8, the Dept. of Transportation said its new rule, when implemented, will require "compensation and cover expenses for amenities such as meals, hotels, and rebooking when airlines are responsible for stranding passengers."

“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” said U.S. Transportation Secretary Pete Buttigieg.
“This rule would, for the first time in U.S. history, propose to require airlines to compensate passengers and cover expenses such as meals, hotels, and rebooking in cases where the airline has caused a cancellation or significant delay.”  

Passengers can see what airlines offer customers right now by going to FlightRights.Gov. As it stands, 10 airlines guarantee meals and free rebooking on the same airline, and nine guarantee hotel accommodations.

But none of them pay compensation and expenses for the actual canceled flight. DOT’s planned rulemaking would make passenger compensation and amenities mandatory so that travelers are taken care of when airlines cause flight disruptions.

Moreover, the Flight Rights dashboard shows that only Alaska and Jet Blue offer Credit or travel vouchers and only Alaska offers frequent flyer miles when a cancellation results in a passenger waiting for 3 hours or more from the scheduled departure time.

But even these two do not offer cash compensation for the actual lost flight. That is what this new rule, which has not yet been published by the DOT, will make mandatory.

The New York Times reported that airlines are understandably upset about this. However, apparently, it has been standard practice in Europe for over two decades. It is understandably very popular there as well.

This rule is likely to make travelers more secure about their options when traveling, but could also increase the price of tickets as well.


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Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at Kiplinger.com, Barchart.com, Medium.com, and Newsbreak.com as well as TalkMarkets.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ

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