The outgoing US Department of Transportation has proposed a new rule that would implement mandatory compensation payments to passengers booked on delayed flights. Meanwhile, Delta Air Lines hopes for an end to what it called "overreach" under the incoming Donald J Trump administration.

The Advance Notice of Proposed Rulemaking issued on December 5 outlines mandatory compensation ranging from USD200 to USD775 per passenger, depending on the length of both the delay and the flight, but airlines would only be liable in cases where the delay is their fault. They would also have to provide passengers with free accommodation, if needed, necessary transportation, and meals. The airlines would have to rebook affected passengers onto the first available alternative flight, even if it is operated by another carrier, in cases of a cancellation, significant delay, or delay that results in a missed connection. The framework would broadly resemble the rules that have been in force in the European Union since 2005.

As the proposal is at an early stage, the DOT said some issues are still open, including the amount of compensation, whether smaller airlines could have lower obligations, and which delays are within the airline's control. The public has until early February 2025 - after the handover to the new administration - to comment on the proposal.

The step is the latest in a string of pro-passenger regulatory steps taken by the Joe Biden administration. Since earlier in 2024, airlines have been obligated to automatically refund the full amount in cash to passengers whose flights have been cancelled or significantly delayed. The DOT had also planned to impose a new rule requiring airlines to display ancillary fees and charges more prominently in the early stages of booking to facilitate easier price comparisons. The so-called "surprise airline junk fee rule" has been challenged and is currently on hold pending a court ruling.

In a heated hearing at the Senate Permanent Subcommittee on Investigations on December 4, representatives of major airlines defended their ancillary fee policies. While the hearing and the subcommittee's report slamming so-called "junk fees" were promoted by Democratic Senator Richard Blumenthal, the airlines were also attacked from across the aisle by Republican Senator Josh Hawley, who said that flying in the US was a "horrible experience" partly due to the abundant and steep ancillary fees.

However, the future of the pro-passenger regulatory momentum hangs in the balance, as airlines have expressed hopes that the incoming Trump administration will reverse course. Delta CEO Ed Bastian told the Associated Press news agency that the new presidency should bring a "breath of fresh air" countering "the level of overreach that we have seen over the last four years within our industry". Southwest Airlines CEO Robert Jordan has expressed hope for "a little less aggressive" DOT policies under the new administration.

"I think anyone who says that the last few years are an overreach is out of touch with his customers, because the public response to this work has been overwhelmingly positive. I would add it’s been perfectly consistent with good business outcomes at an airline like Delta, which is plenty profitable, even as we require them to take better care of passengers," Secretary of Transportation Pete Buttigieg told the New York Times.

Delta Air Lines was the biggest donor during the 2024 electoral cycle among all US airlines. USD1.5 million of the carrier's total donations of USD2.8 million went to Republican candidates. Overall, the sector donated slightly more to Democrats than Republicans.

In related news, Canadian Transport Minister Anita Anand told the broadcaster CTV that she would be summoning airlines to discuss their policies. This comes after Air Canada introduced carry-on fees starting on January 3, 2025.