Ed Bastian, CEO of Delta Air Lines, revealed Wednesday that government regulations recently unveiled by the Biden administration could lead to higher ticket prices.
Last week, the Department of Transportation (DOT) announced plans for new rules that would require airlines to compensate passengers and cover expenses for meals and hotel rooms should flights be delayed or canceled within the control of the air carrier.
“There’s no question if there’s another layer of government regulation and cost that’s introduced into the system, it'll eventually find its way back into ticket prices,” he said.
When asked if Delta is considering lobbying against the DOT’s proposition to mandate the industry to compensate travelers, Bastian said it would be premature to comment on the matter since no rules have been finalized yet, noting Delta already offers compensation to passengers in the event of disruption.
“We haven’t even seen what they are yet, so it’s premature to be out giving specific comments,” he said. “But … this is something we already do. At Delta, we already pay compensation—this last year hundreds of millions of dollars for customers.”
“We do it ... because it’s great service,” he added. “You know if something goes awry, Delta’s going to be there for you.”
According to the dashboard, Delta provides free rebooking and covers the cost of meals, hotels, and transportation when delays or cancellations within the carrier’s control results in passengers waiting three hours or more.
Proposed Airline Rules
DOT announced in a statement on May 8 that the aim of the new rules would be to require airlines to provide compensation beyond a ticket refund and to cover expenses that consumers incur when the airline is at fault for a delay or cancellation.“When an airline causes a flight cancellation or delay, passengers should not foot the bill,” said Transportation Secretary Pete Buttigieg. “This rule would, for the first time in U.S. history, propose to require that airlines compensate passengers and cover expenses such as meals, hotels, and rebooking in cases where the airline has caused a cancellation or significant delay.”
The department made clear on a government website that no U.S. carriers have agreed to provide cash compensation for delayed or canceled flights under carriers’ control. However, it did ask carriers last year whether they would agree to pay at least $100 for delays of at least three hours caused by airlines.
President Joe Biden, joined by Buttigieg, said at a news conference on May 8 that the law currently only requires airlines to refund customers their ticket costs, but not meals, hotels, and transportation when passengers are left in limbo.
“If your flight is very delayed or canceled and the airline could have prevented that from—you deserve more than just being—getting the price of your ticket,” Biden said. “You deserve to be fully compensated. Your time matters. The impact on your life matters.”
However, it could still take months or years to write and finalize the proposed rules, and some carriers privately question whether the department has the legal authority to mandate compensation for delays. A July 2021 proposal to require airlines to refund consumers fees for baggage that is delayed, or onboard services like Wi-Fi that do not work, are still not finalized.
As mentioned by Biden, there is currently no legal requirement for airlines to compensate Americans for delayed or canceled flights, but the European Union and some other countries require compensation of up to $663 for most significant delays.
Airline-caused cancellations include flights scrubbed for mechanical issues with the plane or lack of a crew.
