The International Air Transport Association (IATA) is disappointed that the Biden Administration has announced its long-threatened compensation scheme for airline delays and cancelations. This, despite the fact that similar schemes in the European Union and Canada have proven completely ineffective in reducing underlying delays or cancelations, the majority of which are outside the control of the airlines.
Airlines already have policies in place to support passengers in the case of disruptions and have every incentive to limit delays. In Europe, the EU261 regulation, on which the Department of Transportation (DOT) proposal is based, costs airlines over $5 billion a year. These costs continue to rise and are eventually paid by consumers through higher fares and reduced choice.
The US has one of the most dynamic and competitive airline industries in the world – facilitated by the visionary Airline Deregulation Act of 1978. Rather than increasing the cost of travel for passengers by rolling back deregulation that has democratized airline travel, the US Government should focus its attention on addressing the causes of delays and cancelations under its control, such as the understaffed and outdated air traffic control system.
