Biden plan won’t do away with need for travel insurance

President Biden has a plan to compensate airline passengers whose flights are delayed or canceled when it’s the carriers’ fault. But don’t plan on it taking effect before your summer trips are underway and don’t think about giving up on travel insurance just yet.

The long sought-after passenger relief plan comes as complaints against airlines have soared, from inexplicable flight cancellations, and abrupt schedule changes, to baggage mishandling and even non-working wi-fi.

"Summer travel is going to put enormous pressure on the system," U.S. Transportation Secretary Pete Buttigieg said this week. "Airlines need to accept their fundamental responsibility to better serve passengers."

But Buttigieg’s Department of Transportation could not say how much money it intends to require airlines pay for major delays. Last year, it asked carriers to agree to pay at least $100 for three hour delays or more. So far, the airlines have balked at cash compensation.

At any rate, Biden’s plan probably won’t be finalized by the end of the year and wouldn’t be operative until sometime in 2024 at the earliest, and likely cover a limited number of situations and small amounts of compensation.

Getting tough with airlines

Still, the move was seen as a get-tough threat of sorts to airlines that have been slow to deliver refunds or cash compensation for delays and other non-weather related issues. While some have voluntarily instituted what they say are settlements for delays or cancellations, such as frequent flyer miles, meal vouchers, or credits, none have offered cash, the Transportation Dept. says.

“Inclement weather, which is the leading cause of delays won’t be covered by this proposal, and the traveler will still be responsible for any expenses incurred such as meals and accommodations,” said Joe Cronin, President of International Citizens Insurance, a major provider of international health insurance, travel medical insurance and expatriate insurance.

Cronin noted, also, that Biden’s plan would only impact U.S. based carriers.

Travel insurance will still be needed

“When you take these factors into consideration, travelers should be aware that this new plan would not eliminate the need for travel insurance, which will provide coverage for the traveler regardless of which airline they are flying and can assist with costs incurred for any delays, not just those that are considered the fault of the airline,” he said.

There is no legal requirement that passengers be compensated for delays or cancellations and some airlines even question whether the government has the authority to hold the carriers accountable. Biden’s plan may be modeled after a similar European Union plan that require payment of up to 600 Euros for major delays.

Airlines were blamed for hundreds of thousands of flight disruptions last year. Most notable was a holiday breakdown at Southwest Airlines that led to more than 16,000 flight cancellations and buoyed the calls for new consumer protections.

But trade associations representing major airlines point out that airlines have no incentive to delay or cancel flights and regularly do everything they can to safely operate on time. The airlines also point to labor shortages at the Federal Aviation Administration which has caused a drop in the number of air traffic controllers and thus fewer scheduled flights than in previous years. Some contend that requiring compensation for delays will only increase fares for consumers.

Consumers hail Biden proposal

Yet consumer groups hailed the Biden proposal.

“For too long, U.S. airlines – especially the largest ones – have gotten away with treating passengers like cattle, overbooking flights, hiding fees, and allowing outrageous delays and cancellations for which they refuse to provide adequate compensation and accommodations,” said William J. McGee, senior fellow for aviation and travel at the American Economic Liberties Project.

Some legislators said there may be other unintended consequences to the government for leveling fines, making air travel even more uncomfortable as well as more costly.

Still, with the consumer outcry boiling over, the president seems determined to make changes,

“Your time matters, the impact on your life matters,” he said. “American air travelers deserve better and that’s what we’re going to do.”

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].