Transportation Secretary Sean Duffy has defended his decision to dump Biden-era plans to require airlines to pay guaranteed cash compensation to passengers hit by significant delays or cancellations.
In an interview with Fox News, Duffy said he was taking a more “commonsense” approach to passenger rights and that proposed rules would have actually hit consumers in the pocket through higher ticket prices.
Although the outgoing Biden administration never fully fleshed out its passenger rights legislation before President Trump took office, it would likely have been a sweeping rulemaking that mimicked similar laws in Canada and the European Union.
The idea behind passenger rights rules in Canada and Europe isn’t just about travelers landing a payday when they’re left stranded by the airlines, although it’s probably unsurprising that this is what everyone focuses on.
At a basic level, the EU’s so-called EC261 legislation and Canada’s Air Passenger Protection Regulations set out the minimum level of care that airlines are required to provide passengers.
Although fairly complicated, the different regulations:
- Mandate when airlines must provide refreshments, food, and overnight accommodation during a lengthy delay.
- Set out how and when airlines should reroute passengers to get them to their intended destination, even if that means flying them on another airline.
- Provide a means for passengers to claim compensation when the delay is within the airline’s control.
The last point is, unsurprisingly, the most contentious and has faced fierce opposition from the airline industry, which argues the rules unreasonably inflate their costs, which in turn, have to be passed onto consumers in the form of higher fares.
This is exactly the argument that U.S. airline lobby groups used when they pushed back against the Biden administration’s plans, and it’s this reason that Duffy is now citing for abandoning the proposal.
There is definitely some truth to this, although the bigger picture is possibly more nuanced.
Various studies have looked into the financial impacts of Europe’s EC261 legislation – some by European lawmakers, others by industry groups. One of the most recent studies, which was commissioned by an airline lobby group, concluded that, at a conservative estimate, passenger rights rules cost its members €3.9 billion (US $4.49 billion) in 2024.
The industry believes, however, that the true cost is actually much higher, as much as €5.8 billion for members of Airlines 4 Europe, and a staggering €8.1 billion for all airlines in 2025.1
And those costs are being passed onto consumers. In 2011, the per-passenger cost of complying with EC261 was estimated at around €1.8, but it has surged in recent years to €4.4 in 2018 (which is the most up-to-date information).
The International Air Transportation Association (IATA) summed up the situation in a recent report, explaining2: “In an industry with margins as slim as the airline sector, there is no margin to absorb additional costs on this scale.”
“Essentially, EU261 is a redistribution – with compensation to those passengers who suffer disruption being paid for by all passengers,” the report continued.
But while all passengers are paying for protections that most don’t directly benefit from, there is an argument that it’s a price worth paying.
One of the newest studies on the impacts of EC261, published earlier this year, found that the regulations were a “powerful engine for operational efficiency.”
The researchers discovered that short-haul flights covered by EC261 were 70% less likely to face a significant delay of three hours or more, compared to the United States, where passenger protection rules don’t exist.3
Essentially, EC261 is an “efficient insurance mechanism” that protects all passengers, the report’s authors, Dr. Hinnerk Gnutzmann and Dr. Piotr Śpiewanowski argue.
Airlines are faced with a choice: either invest in running an efficient operation and mitigating the risk of delays and cancellations, or pay compensation. Airlines have chosen to invest in mitigation, and that has had a direct impact on passenger journeys.
The authors also suggest that the cost per passenger is much lower than industry-funded studies suggest, coming in at just €1.73 per passenger, while also debunking claims that EC261 has just resulted in more cancellations.
Interestingly, even IATA isn’t arguing for EC261 to be scrapped altogether, and believes that regulations should still exist to make airlines provide care and assistance to passengers facing long delays, as well as rerouting them to their destination.
But back to the main question: would a U.S. air passenger rights bill make flying more expensive for all Americans? The answer is probably yes, but likely at a much lower cost than the industry might have you believe.
The next question is whether travelers think that the additional cost is a price worth paying. The industry says there’s absolutely no guarantee that passenger rights rules would have any noticeable effect on delays and cancellations, while also warning that low-cost carriers could be put under enormous pressure when made to pay compensation.
Evidence from Europe tells a slightly different picture – improved on-time performance and a flourishing low-cost industry. Of course, Europe and the United States are very different aviation markets.
EU Comp is a scam. Airlines routinely lie about delay reasons and deny obvious compensation under the law. It’s insane how awful the European airlines are about this compensation that is statutorily owed. a few airlines do follow the law but most lie and do not. Saying it was ATC, or weather when it clearly wasn’t.