U.S. Drops Airline Compensation Plan for Flight Delays

Updated: September 5, 2025, 9:53am CDT

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What Changed With U.S. Airline Compensation Rules?
Final Thoughts

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Travelers hoping the U.S. would soon follow Europe’s lead in offering cash compensation for flight delays just hit a setback. The Department of Transportation (DOT) announced it will not move forward with a Biden-era proposal that would’ve required airlines to pay passengers hundreds of dollars for long delays.

Here’s what you need to know about the decision — and what protections still exist for passengers.

What Changed With U.S. Airline Compensation Rules?

In 2023, the Biden administration introduced a proposal that would’ve forced airlines to compensate passengers when delays were within their control:

$200 to $300 for domestic flight delays of at least 3 hours
Up to $775 for longer disruptions

The plan sparked backlash from airlines, who argued the policy would drive up ticket prices. Consumer advocates, meanwhile, saw it as a long-overdue move to bring the U.S. closer to Europe and Canada, where passengers are compensated for major disruptions.

Traveler waiting at the airport departure area for his delayed flight — Image Credit: Chalabala via Adobe Stock

On Thursday, the DOT said it will officially withdraw the rule. Instead, the agency says it will focus on revisiting other regulations, such as:

Clarifying what counts as a “cancellation” that entitles passengers to refunds
Reviewing advertising and fee disclosure rules for airlines and ticket agents

For now, U.S. airlines are only required to refund tickets for canceled flights. While major carriers have pledged to cover meals, hotels, or rebooking costs in certain situations, there’s no law guaranteeing passengers receive cash for delays.

Airlines for America — the trade group representing Delta, United, and American — praised the move, saying Biden’s plan would’ve increased fares.

As someone who’s dealt with my fair share of delays, I can’t help but feel a little disappointed by this decision. While I understand the airlines’ concerns about higher fares (which may or may not be entirely truthful), the idea of guaranteed compensation felt like meaningful accountability — something passengers in the U.S. rarely get.

For now, it seems we’ll have to keep relying on individual airline policies, which can vary widely and often leave travelers in limbo when disruptions strike.

Hot Tip:

If you’re flying in the U.S., know your rights. You’re entitled to a refund if your flight is canceled but not for delays. In contrast, if you fly within or from Europe (or into Europe on a European carrier), EU rules may entitle you to up to €600 ($650+) in cash for lengthy disruptions.

Final Thoughts

This latest move keeps the U.S. far behind other regions when it comes to passenger protections for delays. While some airlines cover meals and hotels voluntarily, travelers shouldn’t expect automatic cash payouts anytime soon.

And that’s bad news if you have costs associated with your delay, such as meals or needing to rebook yourself with another airline to make it to a meeting or a wedding on time.

For frequent flyers, this makes travel insurance from credit cards and flexible booking options more important than ever — especially if you’re hoping to get compensated when things go wrong.