The Trump administration has reversed a key Biden-era plan that would have required airlines to pay passengers cash compensation for delays and cancellations under their control, as the Daily Mail reports.

The reversal marks a major shift in federal airline policy, scaling back consumer protections that were set in motion during Joe Biden’s presidency in 2023.

Biden first introduced the proposal in May 2023 as part of an effort to strengthen passenger rights. The plan would have guaranteed payments, on top of refunds, for significant delays or cancellations caused by an airline.

Compensation concept emerges

The original proposal also included requirements for airlines to cover meals and hotel stays during disruptions. It sought to place financial responsibility on airlines when travel plans were derailed for reasons within their control.

By December of that year, the Department of Transportation asked the public whether carriers should be required to pay $200 to $300 for domestic delays of at least three hours, and up to $775 for longer interruptions. The discussion reflected growing frustration over the rise in cancellations and delays.

Supporters of the initiative argued that airlines had little incentive to minimize disruptions without such compensation rules. Advocates said the plan would both reimburse passengers and reduce the overall number of flight issues.

Industry groups praise reversal

The Trump administration’s Department of Transportation has now withdrawn the notice of compensation. The move is consistent with its broader effort to roll back what it considers unnecessary or burdensome regulations.

Airlines for America, an industry trade group, welcomed the decision, stating that the Biden plan would have driven up ticket costs. “We are encouraged by this Department of Transportation reviewing unnecessary and burdensome regulations that exceed its authority and don’t solve issues important to our customers,” the group said.

The administration has argued that current requirements already ensure refunds for canceled flights, though there is no mandate for compensation in cases of delays. Carriers contend that they already provide adequate assistance, citing commitments made in 2022 to cover expenses such as meals and lodging during disruptions.

Consumer advocates raise concerns

Critics of the rollback say passengers are losing important protections. Former Biden economic adviser Bharat Ramamurti said the earlier rule “would not only have put real cash back in your hands for badly delayed or canceled flights, but would have resulted in far fewer delayed and canceled flights in the first place.”

The Department of Transportation under Trump has also begun reviewing other Biden-era rules. Among them is a requirement for airlines to disclose service fees up front, which is currently on hold due to a court ruling.

Officials say they are considering updating regulations on refund policies for cancellations, along with a review of advertising and ticket pricing practices. These steps may shape what protections travelers ultimately retain.

Future of consumer protections unclear

A spokesperson for Transportation Secretary Sean Duffy emphasized that the department “will faithfully implement all aviation consumer protection requirements mandated by Congress.” This statement highlights the administration’s intent to focus only on rules explicitly authorized by lawmakers.

The administration also confirmed it will reconsider any regulations created during Biden’s presidency that it believes go beyond congressional mandates. This approach could continue to scale back the broader consumer-focused agenda that had been advancing under the prior administration.

In another move, the Trump administration recently dropped a lawsuit against Southwest Airlines that had been initiated during Biden’s tenure. This decision further demonstrates the shift toward limiting federal involvement in consumer protection disputes with major carriers.

Broader policy implications awaited

Most major airlines, including leading U.S. carriers, pledged in 2022 to cover certain out-of-pocket costs when delays or cancellations were their responsibility. Those commitments, however, are voluntary and not enforced by federal law.

The withdrawal of the compensation plan leaves passengers with fewer formal protections, as refunds remain the only guaranteed recourse under federal policy. Delays, even lengthy ones, continue to be excluded from required reimbursement.

The long-term impact of these changes may depend on whether Congress or future administrations revisit the debate. For now, the Trump administration’s decision represents a clear rollback of the consumer-focused framework pursued by its predecessor.