US proposes to ease airline penalties for consumer protection violations

By David Shepardson

WASHINGTON, Jan 7 (Reuters) – The U.S. Transportation Department is proposing to revise its guidance to deemphasize imposing civil fines on airlines that violate consumer protection rules and to drop Biden-era policies that toughened enforcement.

The department’s Office of Aviation Consumer Protection cited an executive order issued by President Donald Trump in February, saying its enforcement focus “will be on ensuring compliance with civil rights and consumer protection regulations rather than finding and penalizing entities for violations.”

The department said that in the event of violations it “will attempt to address the problem by issuing a warning letter to help the regulated entity achieve compliance and resolve the issues before pursuing enforcement actions.”

It is also proposing to drop guidance issued in 2023 under then-President Joe Biden that said the department would “intensify enforcement actions” and seek higher penalties for airlines that violate consumer protection rules. The Biden administration said those moves were necessary to deter future violations and to ensure they are not viewed “as simply a cost of doing business.”

The Trump administration’s proposed guidance says “civil penalties should be reasonable and proportional to the violation and its impacts.”

The guidance will be open for public comment for 30 days.

A spokesperson for Transportation Secretary Sean Duffy said in a statement that under Biden the USDOT focused on fines that “enriched government coffers, not civilian travelers.”

“Protecting the American people remains our top priority, and we won’t hesitate to impose sanctions for widespread, egregious, or intentional violations as appropriate,” the spokesperson said.

Last month, the Transportation Department moved to reverse some penalties imposed on airlines during the Biden administration. In December, it waived $16.7 million in fines imposed on American Airlines in 2024 as part of a settlement over the carrier’s treatment of disabled passengers, including failing to provide some with adequate assistance and mishandling of wheelchairs.

The department also agreed last month to waive the remaining $11 million of a fine imposed on Southwest Airlines as part of a $140 million settlement over operational problems that stranded more than 2 million passengers during the busy holiday travel period in December 2022. The department cited Southwest’s move to invest more than $1 billion in its operations in its decision.

In November, the department withdrew a proposal issued under Biden that sought to require airlines to pay passengers cash compensation when carriers are responsible for U.S. flight disruptions.

(Reporting by David Shepardson in Washington; Editing by Franklin Paul, Paul Simao and Tom Hogue)