2024-28930. Airline Passenger Rights

Canadian Compensation Requirements ⁹⁹

	Large carriers	Small carriers
Delayed Arrival of 3-5:59 hours	$400 Canadian Dollars (CAD), Approximately $295 U.S. Dollars (USD)	$125 (CAD), Approximately $92 USD.
Delayed Arrival of 6-8:59 hours	$700 (CAD), Approximately $517 USD	$250 (CAD), Approximately $185 USD.
Delayed Arrival of 9+ hours	$1,000 (CAD), Approximately $738 USD	$500 (CAD), Approximately $369 USD.

The Department is considering whether to use amounts similar to Canada to ensure U.S. passenger compensation requirements are in line with other similar international requirements.

Under this first option, the Department is considering requiring an airline to pay compensation of $300 USD to a passenger whose arrival at the final stop of a domestic flight is delayed at least three hours but less than six hours; $525 USD to a passenger whose arrival at the final stop of a domestic flight is delayed at least six hours but less than nine hours; and $750 USD to a passenger whose arrival at the final stop of a domestic flight is delayed at least nine hours.^[100] The Department is considering requiring an airline to pay $525 USD to a passenger whose arrival at the final stop of an international flight is delayed at least six hours but less than nine hours; and $750 USD to a passenger whose arrival at the final stop of an international flight is delayed at least nine hours. If the Department proposes this option, should it also include reduced compensation amounts for small airlines like the Canadian APPRs? Why or why not?

The second option the Department is considering is to require airlines to pay compensation based on the Department's hourly value of travel time savings for air travel from DOT's Benefit-Cost Analysis Guidance for Discretionary Grant Programs ^[101] and the weighted average flight segment delay of flights delayed at least three but less than six hours, at least six hours but less than nine hours, and nine hours or more on flight segments within the United States using 2022 and 2023 full-year domestic flight performance data collected by BTS.^[102] Under this second option the Department would require an airline to pay compensation of $200 to a passenger whose arrival at the final stop of a domestic flight is delayed at least three hours but less than six hours; $375 to a passenger whose arrival at the final stop of a domestic flight is delayed at least six hours but less than nine hours; and $775 to a passenger whose arrival at the final stop of a domestic flight is delayed at least nine hours. The Department is considering requiring an airline to pay $375 to a passenger whose arrival at the final stop of an international flight is delayed at least six hours but less than nine hours; and $775 to a passenger whose arrival at the final stop of an international flight is delayed at least nine hours.

In calculating the compensation amounts for the second option, the Department relies on the BTS data because that data is reported and certified correct by U.S. airlines to the Department. The Department recognizes that BTS data have some limitations as applied to this rulemaking. Notably, BTS only collects flight performance data from U.S. airlines for domestic flight segments, and the data does not reflect passenger trip delay. Accordingly, the data used to establish any compensation amounts from BTS data would necessarily be limited to domestic segment-based delays, not overall delays for passengers arriving at their destinations. The Department invites comment on whether it should use BTS data to establish any compensation amounts or whether an alternate data source would provide information more appropriate to establishing compensation amounts.

To arrive at the dollar value for compensation for purposes of soliciting comment on option two in this ANPRM, the Department multiplied its estimated ( print page 99775) weighted average arrival delay for each compensation tier (3-5:59 hours; 6-8:59 hours; 9+ hours) ^[103] by the Department's hourly value of travel time savings for air travel from DOT's Benefit-Cost Analysis Guidance for Discretionary Grant Programs. This hourly value of travel time savings for air transportation is $51.54.^[104] The Department developed its value of travel time savings “to be used in all DOT benefit-cost or cost-effectiveness analyses.” ^[105] Although the value of travel time savings was not specifically developed for the purpose of assessing the value of time lost due to air travel delays, the Department views the factors used to establish the value of travel time savings—trip purpose, passenger characteristics, passenger income, mode and distance of transportation, and passenger comfort—are also potentially relevant to time lost due to air travel delays.^[106]

The Department also closely reviewed the EU compensation regime when developing this ANPRM. The EU, like Canada, uses a three-tiered compensation system, but those compensation regimes have different criteria. Canadian compensation requirements are based on the length of a passenger's delayed arrival and whether the carrier is a large or small carrier.^[107] The EU compensation amounts are based on the distance and location of the flight ( i.e., whether the flight is entirely within the EU), with a reduction of 50 percent if passengers arrive with delays of less than two, three, or four hours depending upon the distance and location of the flight.^[108] The EU applies the following requirements for compensation in the form of cash, electronic bank transfer, bank order or bank check for cancellations and delays of three hours or more unless the airline proves that the cancellation or delay is “caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.” ^[109]

EU Compensation Requirements ¹¹⁰

	Compensation	Reduced compensation if rerouting is provided
All flights 1500km or less	250 Euros, Approximately $278 USD	Reduced to 125 Euros (approximately $139 USD) if passenger arrives less than 2 hours later than scheduled.
All flights entirely within the EU and all flights between the EU and a location outside the EU between 1500 and 3500 km	400 Euros, Approximately $445 USD	Reduced to 200 Euros (approximately $223 USD) if passenger arrives less than 3 hours later than scheduled.
All other flights	600 Euros, Approximately $668 USD	Reduced to 300 Euros (approximately $334 USD) if passenger arrives less than 4 hours later than scheduled.