How airline regulations may change next year

While the incoming administration, led by President-elect Donald Trump, with the Republican Party, which will have a majority in Congress, has not yet said much about its plans for the commercial aviation industry, including the Federal Aviation Administration ( FAA ), some indications point to an operating environment benefitting businesses.

The now-outgoing administration, via the Department of Transportation ( DOT ), led by Pete Buttigieg, the Secretary of Transportation, announced its proposed rules on automatic refunds for canceled and/or delayed flights on December 5.

The DOT explained that it has published an advance notice of proposed rulemaking (ANPRM), providing an opportunity for stakeholders, including airlines, to comment on its proposed changes.

This includes paying passengers between $200 and $775 for delayed flights between three and more than nine hours and no additional costs when rebooking on the next available flight.

According to the Department, the European Union (EU) – with the EU261 regulation – and other countries have passenger protections that compensate travelers and provide services when an airline is to blame for a significant delay. The DOT pointed out that one study concluded that the EU’s regulations have reduced the likelihood and duration of delays.

“U.S. airlines received $54 billion in taxpayer bailouts during the COVID-19 pandemic, helping the industry recover and enjoy record travel demand. While no U.S. airline provides cash compensation to passengers for airline-caused disruptions, following DOT actions, several airlines must provide at least $50 in credits or vouchers.”

The DOT pointed out that after it had pressured carriers, ten of the largest US airlines have committed to rebooking passengers at no additional cost and covering meals during an airline-caused disruption, while nine have promised to refund accommodation and related transportation costs.

“However, airlines can change course on their customer service commitments at their discretion, and it is often up to the airlines to determine when they are responsible for a flight delay or cancellation.”

Per the DOT, travelers have faced challenges holding airlines accountable since there was no legal obligation. With the proposed rules, the Department was addressing any gaps regarding refunds and/or reimbursements following airline-caused flight disruptions.

Unfortunately, with the ANPRM being published on December 11, the rule’s consultation period will end on February 10, 2025. The new, Trump-led government will be inaugurated in January 2025, which could result in the scrapping of pro-consumer regulations, including the proposed refunds for delayed flights.

In a preview of the incoming administration, Pillsbury Winthrop Shaw Pittman (Pillsbury), a US-based international law firm, concluded that Trump has clearly stated his intentions to slash federal regulations, with the firm particularly concerned about consumer protection initiatives that were passed or pursued by the current administration.

“In the first Trump Administration there was an effort to roll back some of [consumer protection] regulations and to impose limits on DOT’s use of this authority. We expect to see something similar in the next Trump Administration.”

Additional areas where there could be changes should be competition, with reduced regulations potentially resulting in even more consolidation. Pillsbury speculated that while the DOT has launched a probe into the state of airline competition in the US, the Trump administration could label it irrelevant to its goals.

The law firm also warned that Trump could also restructure air traffic control (ATC), with possible privatization on the cards, something that was outlined by the far-right think tank The Heritage Foundation in Project 2025. While Trump had denied his association with the think tank and the paper, Project 2025 and Agenda 47, Trump’s manifesto following his election, shared similarities, as pointed out by ABC News.

Sustainability, with Trump, on multiple occasions, having called climate change a “hoax,” and foreign ownership policies, could see significant changes, Pillsbury said. The law firm pointed out that, as outlined in Project 2025, the incoming administration could revise the strict US citizenship requirements for US airline ownership.

In a post on his social media network Truth Social on December 10, Trump said that any individual or business looking to invest at least $1 billion into the US would receive fully expedited approvals and permits, including all Environmental approvals.

Over the past few months, US airlines’ chief executive officers (CEO) have expressed different views about the incoming administration.

Ed Bastian, the CEO of Delta Air Lines , landed in hot water after his comments before the airline’s investor day in November. Then, the executive remarked that Trump has promised to review the regulatory environment, which, according to Bastian, included a “level of overreach that we have seen over the last four years within our industry.”

In turn, Scott Kirby, the CEO of United Airlines , told NPR that he was comfortable with the government holding United Airlines and other carriers accountable. While Kirby praised the FAA for its efforts, the executive pleaded for more ATCs and technology upgrades to the National Airspace System (NAS).

In response to Bastian, Buttigieg, in an interview with The New York Times, bluntly stated that if anyone interpreted the outgoing administration’s pro-consumer work as overreach, they were “out of touch with his customers, because the public response to this work has been overwhelmingly positive.”

“I would add it’s been perfectly consistent with good business outcomes at an airline like Delta, which is plenty profitable, even as we require them to take better care of passengers.”

However, there could be hope that pro-consumer decisions will be made even by the next Congress. Following a US Senate Permanent Subcommittee on Investigations (PSI) hearing on December 4, which included grilling airline executives about rising and excessive passenger fees, Richard Blumenthal, a Democrat and chair of the PSI, told Reuters that there was fury and frustration on both sides of the aisle, with Blumenthal describing it as “pretty dramatic.”