Delta’s CEO on the White House’s Airline Compensation Plan — and Why It Will End up Costing Passengers More Money
Delta CEO Ed Bastian says the proposed requirement of airlines compensating passengers will "no question" increase airfare.
Delta Air Lines’ CEO said it is inevitable that airfare will increase if the White House’s proposal to require airlines provide compensation for significant flight delays and controllable cancellations goes into effect.
“There's no question if there is another layer of government regulation and cost that's introduced into the system, it will eventually find its way back into ticket prices,” Delta’s CEO Ed Bastian told CBS News on Wednesday. “That's just common business logic.”
The warning comes days after the International Air Transport Association (IATA) painted a similar picture, cautioning the cost of the new policies may be pushed onto passengers. The commentary follows the Biden administration and the Department of Transportation’s (DOT) proposed new rules to ensure passengers are compensated beyond just a refund when a delay or cancellation is considered the airline’s fault. That compensation could apply to things like meal vouchers, overnight accommodations, rebooking, and more.
Bastian added that Delta already compensates passengers in those airline-at fault situations.
“That's why you travel on us… You know if something goes awry, Delta is going to be there for you,” he said, adding, “Anything that's within our control, we already do. We compensate our customers a meaningful amount of money whether it's hotels or meals or additional impact items for their travels. Because we know when you decide what airline you're choosing, you want to make sure you're choosing an airline that's got your back.”
Still, compensation policies differ by airline, a fact the DOT spells out in a dashboard it launched last year. Currently, no major U.S. airline offers cash compensation when a cancellation or delay results in a passenger waiting for three or more hours, for example, and only two (Alaska Airlines and JetBlue) guarantee a credit or travel voucher in that situation.
When the new compensation rules were proposed, a White House official noted to Travel + Leisure this type of compensation already exists in Canada and the European Union, and was shown to result in fewer delays in the EU in one study.
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