Should U.S. airlines pay passengers for delays like the EU?
Southwest Airlines spent the early part of 2023 trying to make good after a historic meltdown resulted in more than 16,700 canceled flights during the 2022 holidays. The airlinefor the cost of alternative travel arrangements and sent many travelers additional loyalty points.
As long as the flight wasn’t disrupted due to an “extraordinary circumstance” such as weather, passengers are entitled to compensation from 250 euros to 600 euros , depending on the length of flight and delay. Some passengers are also entitled to free meals and accommodations.Given the financial pressure to pay out passengers, it might seem airlines are incentivized to stay on schedule, but some studies show that it might not help with being on time at all.
“Compensating 250 euros on a flight that costs 50 euros is clearly absurd,” said former Flybe CEO Christine Ourmières-Widener in a testimonial generated for a 2019 report published by the European Regions Airline Association. Flybe is a now-defunct British regional airline.. Government laws mandating compensation can alleviate that burden if passengers are willing to put in the time to file the paperwork.
The rate of passengers claiming compensation has increased, suggesting more people are getting money for their inconvenience. In 2018, 38% of eligible passengers claimed compensation, up from just 8% in 2011, according to aThat uptick in passengers claiming compensation is in part due to the proliferation of claims agencies, such as AirHelp. These third-party claims agencies help passengers navigate the claims process, but often take a cut of compensation.
Southwest reported a revenue loss of $410 million during the 2022 fourth quarter, attributed to the December 2022 disruptions, which was just part of their $800 million overall loss. Factoring in the first quarter of 2023, the meltdown cost Southwest more than $1 billion after accounting for lost revenue and passenger reimbursements.
He emailed American and — within 48 hours — the airline deposited 5,000 miles into his AAdvantage account.
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