U.S. Considering EC261-Type Compensation Rule
Joe Cortez September 11, 2024
The Dallas Morning News reports the Biden administration is working on a proposed rule which would require carriers based in America to provide similar recourse for delayed passengers.
Rule Would Require Cash Compensation on Top of Food and Hotel Vouchers
During an invite-only meeting, White House leadership outlined a plan which would require airlines to provide a cash payment when flyers are displaced by a “controllable” cancellations or delays. The policymakers did not elaborate on which situations would be considered “controllable.” The current EU policy includes everything that is not due to “extraordinary circumstances,” which includes “air traffic management decisions, political instability, adverse weather conditions, and security risks.”
The rule is still in the beginning stages of consideration, and no number has been floated for consideration. However, those who are working on it say the new rule could be introduced as soon as January 2025.
“When an airline cancels a flight because of mechanical or staffing issues, the passengers should receive compensation for their troubles,” Sen. Ed Markey (D-MA) told The Dallas Morning News.
If the idea does move to the Notice of Proposed Rulemaking stage, it would be the final capstone on the Biden administration’s moves to bring passenger-friendly reforms to air travel. Over the past three years, some of their instituted or proposed initiatives include the Airline Customer Service Dashboard, refunds for cancelled flights and junk fees, and fee-free family seating.
“This is all part of trying to provide passengers with more assurances that, you will be OK,” special assistant to the President for economic policy told the Morning News. ““We can’t make up for the fact that you had to spend nine hours away from your family stuck in an airport or hotel — but we can make sure the airlines are held accountable when it’s something they could have prevented.”
I don't think this rule covers America as stated in the article. It covers the United States of America. Not the other 36 or so countries in America.
So who makes the most? Lawyers..Initially Airlines repudiate the claim. Then you have to use a Lawyer and they take their 25% Cut and in most cases come out the Winner Long Term.
I've only ever used a third party claim firm once for EC.261 when it was a particularly tricky grey area. I've made many claims directly to the airlines which have been paid out fairly, and a couple which have gone to an Alternative Dispute Resolution arbitration service where I've won every time.
Here come the "we will pay for it" brigade.
I'd much prefer to pay the distributed cost of airlines buying insurance policies to cover the cost of reimbursement for travel delays, than my own hotel and travel expenses d/t the too frequent mechanical and computer issues of airlines.
If people don't realize this cost will get covered by increased fares they don't understand economics. A truly poorly run airline might not recover its costs, but every line will make adjustments to avoid penalties. So something like the average spend will get added to fares.
The thing you are not taking account of is that often airlines can avoid the penalties.
Let's say an airline can save $50k by cancelling a flight and just rebooking passengers onto other flights. They might do that. If they'd have to pay $120k in penalties for the delay, they probably won't do it. Passengers are then vastly better off because they are not inconvenienced and the airline only "lost" $50k, not $120k. Even if the air fares were to go up to keep the profit the same, it's not by nearly as much as the theoretical penalty.
The sky hasn't fallen in Europe. And the reality is, regardless of what we are led to believe, the US is far from a free market. Competition has been drastically reduced in the past decade and consumer protections in general are minimal.
Lobbyists have a disproportionate amount of power in setting policy so whatever we end up getting is likely to be a watered-down version of EC261.
This would be a good thing and the airlines can most definitely afford it. They will hum and ho that it will be terrible for them and for passengers... bla bla bla. It might actually cause them to tighten up their own acts.
So? When my rent goes up, I raise my rates and my clients pay for it. However, each of them individually is not paying the full cost of the increase; it's spread over the entire client base.
And I really don't care if airfares go up. There is no right to fly at a budget of your insistence; if you can't afford it, stay home like people did for centuries. The increase in airfares since the pre-regulation days are well below the rate of inflation (and is reflected in the lack of service).
I use the same argument against the fee-free family seating. If you can't afford to pay for seat assignments for the kids, skip the trip to Disney World (that alone will allow you to pay seat fees for 10 years!). Drive to your local state park, or something else. Having kids shouldn't give you special rights or privileges just because you can't afford it.
And? I think that's kind of the point of a regulation like this. I would gladly pay marginally more for airfare if it meant I am not getting stuck in random locations due to maintrenance issues, delayed for three hours due to lack of flight attendants, or constantly waiting on the tarmac for an hour due to lack of a gate agent. Staffing is a prime avenue for cutting costs so airlines can offer marginally lower fares on extremely competitive routes or markets. This cost cutting is an over-competitive race to the bottom with consumers, as they bear the brunt of the consequences with delays.
You are wrong. Your corporate masters always predict job losses & higher costs whenever Congress tries to raise the pitiful minimum wage -- it never happens.
EC261 (Air Passenger Rights Regulation) has been effect since 2004 as well as its counterpart UK261 (adopted after the UK left the EU) and fares are still low in Europe and the entire system is now more efficient but more importantly now more accountable to the public for their operation as a public conveyance.
We need it desperately here in the US because the unlawful trusts known as airline companies really perform poorly and don't give a whit about the impact their conduct has on the public.
I predict it will never make it because the congressmen will do what their corporate masters tell them to do and shoot it down, and will justify it by "this cost will get covered by increased fares."