1. Overview
This article discusses the potential impact of proposed compensation rules for airline passengers on airfare prices, featuring insights from Delta Air Lines’ CEO Ed Bastian and reactions from the International Air Transport Association (IATA).
2. Airfare Increases Likely
According to Delta Air Lines’ CEO Ed Bastian, the proposed requirement for airlines to compensate passengers will “no question” lead to increased airfare. He asserts that any new layer of government regulation will ultimately influence ticket prices.
3. IATA’s Concerns
The warning from Bastian coincides with IATA’s recent statement, which cautioned that the costs associated with the new compensation policies may be transferred to passengers. This follows the Biden administration and the Department of Transportation’s (DOT) suggestions to provide compensation beyond refunds when delays or cancellations occur due to airline fault, potentially including meal vouchers, overnight accommodations, and rebooking services.
4. Delta’s Current Compensation Policies
Bastian emphasized that Delta already offers certain compensations in instances where the airline is at fault. He reassured travelers that Delta prioritizes passenger interests and provides significant compensation for issues such as hotels, meals, and other travel impacts, reflecting their commitment to customer care.
5. Variability Among Airlines
It is important to note that compensation policies can vary significantly among different airlines. The DOT has highlighted this discrepancy in its dashboard launched last year. For instance, no major U.S. airline currently provides cash compensation for cancellations or delays causing longer wait times, although Alaska Airlines and JetBlue do offer travel credits in specific scenarios.
6. International Comparisons
When the new compensation rules were proposed, a White House official mentioned that similar compensatory measures exist in Canada and the European Union, where one study indicated that such policies resulted in fewer flight delays.
