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Proposed airline regulations face uncertainty with incoming Trump administration

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Proposed airline regulations face uncertainty with incoming Trump administration
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As the United States prepares for a new administration under President-elect Donald Trump, changes in airline regulations are anticipated. While specifics have not been disclosed, some signals suggest a business-friendly environment may emerge.

The outgoing administration, led by Secretary of Transportation Pete Buttigieg, proposed rules on December 5 regarding automatic refunds for canceled or delayed flights. The Department of Transportation (DOT) published an advance notice of proposed rulemaking (ANPRM), inviting stakeholders to comment on these changes. The proposal includes compensating passengers between $200 and $775 for delays ranging from three to over nine hours and rebooking at no extra cost.

The DOT highlighted that similar regulations in the European Union have reduced delay likelihood and duration. "U.S. airlines received $54 billion in taxpayer bailouts during the COVID-19 pandemic," noted the department, emphasizing that while U.S. airlines do not provide cash compensation for disruptions, they offer credits or vouchers following DOT actions.

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Ten major U.S. airlines have committed to rebooking passengers without additional charges and covering meals during disruptions caused by airlines. Nine have agreed to refund accommodation and related transportation costs. However, as the DOT stated, "airlines can change course on their customer service commitments at their discretion."

With the ANPRM consultation period ending on February 10, 2025, after Trump's inauguration in January 2025, there is concern about potential regulatory rollbacks. Pillsbury Winthrop Shaw Pittman law firm expressed worries about consumer protection initiatives being scrapped under Trump's administration.

"In the first Trump Administration there was an effort to roll back some of [consumer protection] regulations," Pillsbury remarked, anticipating similar actions in Trump's next term.

Potential areas of change include competition regulation and air traffic control restructuring. Privatization has been suggested by The Heritage Foundation's Project 2025 plan—though Trump denied direct association with it—and could align with his manifesto Agenda 47.

Sustainability policies might also shift significantly under Trump, who has previously called climate change a "hoax." Changes to foreign ownership policies are possible too; Trump announced expedited approvals for investors committing at least $1 billion into the U.S., including environmental permits.

Airline CEOs have expressed mixed reactions toward the incoming administration's stance on regulation. Delta Air Lines CEO Ed Bastian criticized what he termed regulatory "overreach" but faced backlash from Buttigieg who defended pro-consumer measures as beneficial both publicly and financially for airlines like Delta.

United Airlines CEO Scott Kirby supported government accountability efforts but advocated for more air traffic controllers and technology upgrades within the National Airspace System (NAS).

Despite potential shifts in policy direction with Congress's new composition post-inauguration, hope remains among some lawmakers for continued pro-consumer decisions amidst bipartisan frustration over rising passenger fees discussed during recent Senate hearings.

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