IATA criticises US air passenger compensation rules

US government mandates financial compensation for flight delays & cancellations
2023-05-10
/
/ New Delhi
IATA criticises US air passenger compensation rules

The US Department of Transportation and the Biden Administration were criticised by IATA for their decision to increase the cost of air travel by requiring airlines to offer financial compensation to passengers for flight delays and cancellations

IATA criticised the US proposed decision to raise the cost of air travel by mandating airlines provide financial compensation to travellers in addition to their current care offerings, as it will fail to solve the issue of flight delays.
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“Airlines work hard to get their passengers to their destinations on time and do their best to minimise the impacts of any delays. Airlines already have financial incentives to get their passengers to their destination as planned. Managing delays and cancellations is very costly for airlines. And passengers can take their loyalty to other carriers if they are not satisfied with service levels. The added layer of expense that this regulation will impose will not create a new incentive, but it will have to be recouped –which is likely to have an impact on ticket prices,” said Willie Walsh, IATA’s Director General.

The US Department of Transportation (DOT) and the Biden Administration were criticised by the International Air Transport Association (IATA) for their decision to increase the cost of air travel by requiring airlines to offer financial compensation to passengers for flight delays and cancellations in addition to their current care options. A recent notice by IATA states that the rule will be released later this year.

According to the statement, the 10 major US carriers, according to the DOT’s Cancellation and Delay Scoreboard, already provide meals or cash vouchers to passengers during lengthy delays, and nine of them also provide complimentary hotel accommodations for passengers affected by an overnight cancellation.

The statement says that the new regulations may foment unrealistic expectations among travellers that are unlikely to be met. This rule would not apply in the majority of cases because weather is the primary cause of air travel delays and flight cancellations. The Federal Aviation Administration has acknowledged that air traffic controller shortages, which contributed to delays last year and would continue to be a problem in 2023, by requesting that airlines reduce their flight itineraries to the New York metropolitan area. Delays and cancellations are often caused by equipment malfunctions and closed runways. Additionally, delays in aircraft deliveries and parts shortages, over which airlines have little or no control but which affect reliability, are a result of supply chain concerns in the aircraft manufacturing and service industries.

“Aviation is a highly integrated activity involving a number of different partners, each of whom has a vital role in ensuring the smooth operation of the air transport system. Instead of singling out airlines as this proposal most assuredly does, the Biden Administration should be working toward ensuring a fully funded FAA, a fully staffed controller workforce, and completing the rollout of the decades-delayed FAA NextGen air traffic control modernization program,” adds Walsh.

The statement adds that while the DOT carefully notes that airlines will only be responsible for compensating passengers for delays and cancellations for which the airline is deemed responsible, severe weather and other issues can have knock-on effects for days or even weeks later, at which point it can be difficult to impossible to isolate a single causal factor.

It adds that experience shows that punitive regulations like this have no impact on the level of flight delays and cancellations. A thorough examination of the European Union’s passenger rights regulation, EU261, released in 2020 by the European Commission(i), found the opposite to be true. Cancellations overall nearly doubled from 67,000 in 2011 to 131,700 in 2018. The same outcome occurred with flight delays, which rose from 60,762 to 109,396. While the share of airline attributable delays as a percentage of total delays shrank, the report attributed this to an increase in delays classed as extraordinary circumstances – such as air traffic control delays.

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