Airlines ask Trump admin to end review of payments for flight disruptions

A trade group representing three major U.S. airlines is asking the Trump administration to abandon a review over whether they should be required to pay passengers compensation over flight disruptions.

Airlines for America, which represents American Airlines, Delta Air Lines and United Airlines, wrote a letter to the U.S. Department of Transportation (DOT) this week, Reuters reported.

The letter urged the Trump administration to end the review launched in December to take public comments on whether U.S. airlines should give cash as compensation for carrier-caused disruptions, as is done in the European Union and Canada.

“Airlines do not need further incentive to provide quality service,” the group wrote, according to Reuters, arguing that the DOT does not have the authority to do this, and that the requirement would drastically increase airlines’ costs – and ticket prices.

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Last month, the DOT imposed a $2 million penalty on JetBlue Airways after a federal investigation revealed that it was “operating multiple chronically delayed flights.” 

The DOT’s order required JetBlue to stop chronic flight delays., Of the $2 million penalty, half was to go directly to the U.S. Treasury, with the other half to be used to compensate passengers who were impacted by the chronically delayed flights or any future flight disruptions of three hours or more caused by JetBlue within the next year, the DOT said.

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The future compensation must be valued at a minimum of $75 for each harmed passenger, the DOT said.

Before the 2024 holiday season kicked off, the Biden administration’s new rules, which require automatic cash refunds for canceled or significantly delayed flights, took effect. 

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The new automatic refund rule, first laid out in April by the DOT, created a universal standard for when airline passengers on flights to, from or within the U.S. are owed refunds. 

Prior to the rule taking effect, airlines set their own standards for what flight changes warranted a refund. Passengers then had to “navigate a patchwork of cumbersome processes to request refunds owed to them,” the DOT said.

The rule was established to “address persistent issues reported by airline passengers who were trying to obtain refunds they were owed,” the DOT said. 

The International Air Transport Association representing airlines worldwide separately criticized the idea, saying required compensation programs “have become wealth transfer tools that have cost airlines billions of dollars without any meaningful reduction in flight disruptions.”

Spirit Airlines said the idea is so extreme “it might encourage carriers to re-evaluate when they proceed with flights that should have been further delayed or canceled when potential safety related concerns exist.”

FOX Business’ Daniella Genovese and Reuters contributed to this report.