Frontier CEO suggests alternative to proposed airline passenger reimbursement rule

A new rule proposed by the Biden administration would require airlines to reimburse passengers for expenses whenever there is a major delay or cancellation caused by something within the airline's control, like staffing shortages or mechanical issues.

Frontier CEO Barry Biffle has a different idea.

Chatting with several reporters following a Wings Club presentation by Delta CEO Ed Bastian this week, Biffle laid out an alternative rule that he says would be more effective at managing airline disruptions than requiring carriers to cover things like food, toiletries, hotels and alternative travel arrangements.

A return of "Rule 240."

Rule 240 was a stipulation before the Airline Deregulation Act of 1978 that required airlines to carry each other's passengers during delays or cancellations caused by anything besides bad weather.

The major airlines, which have interline agreements with each other, may still voluntarily rebook passengers on their rivals' planes during irregular operations. However, that is typically not required and generally only includes the three legacy airlines — American, Delta and United, along with Alaska and potentially JetBlue in some cases. Smaller airlines and low-cost carriers, such as Southwest, Spirit, Frontier and others, do not have such agreements, and the major airlines are not necessarily interested in entering into interline deals with their low-cost competitors.

"It got turned off after [airline] consolidation," Biffle said, referring to a series of mergers in the decades since deregulation that led to there being three main legacy carriers. "After consolidation, all of the big guys cut everyone off."

Related: Biden administration presses airlines to compensate passengers for delays and cancellations

Frontier, which is currently the only major airline that does not voluntarily offer hotel accommodations for passengers who are canceled or delayed overnight, according to the Department of Transportation, would be able to work with the bigger airlines to accommodate their passengers during disruptions if a modernized Rule 240 was implemented, Biffle said.

Daily Newsletter

Reward your inbox with the TPG Daily newsletter

Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts

Email address

Sign up

By signing up, you will receive newsletters and promotional content and agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.

"If we, as an industry, get together and say we're going to protect consumers, that if there's a seat available, you're going to have it," customers would benefit more than they would under the administration's proposed rules, Biffle suggested.

"There's a solution that already exists," Biffle added. "And I would like to work with the other airlines and the Biden administration to implement it."

Ultimately, Biffle implied, cooperating on an interline rebooking plan would benefit the airlines along with customers.

"If you asked Southwest if they would have loved to have access to my seats during their meltdown, I bet they'd have loved it," he said, referring to Southwest's operational collapse following winter storms during the holiday travel period, although Frontier likely would have been able to handle only a fraction of the stranded passengers.

Additionally, the old rule only would have applied later on in the Southwest saga — the first few days of storm-related cancellations, which affected every carrier, would have been considered to have been caused by weather and not resulted in a triggering of the rule.

Biffle said that he had not yet approached the Biden administration or other airlines to campaign for the rule but said he intends to.

"I'm planning on talking to them," he said. "I'm going to talk to everybody."

The DOT did not immediately return TPG's request for comment.

Don't miss: Would you fly Frontier to Europe? CEO Barry Biffle is working on that

U.S. airlines have historically opposed requirements to reimburse passengers during significant delays or cancellations, arguing that it would force them to raise fares to compensate for additional costs. The Biden administration's proposal would include protections similar to those required in the European Union.

In a statement responding to the proposed rules earlier this month, Airlines for America, the trade group and lobbying organization representing U.S. carriers, said that carriers had already taken steps to minimize issues that were within their control.

"U.S. airlines have no incentive to delay or cancel a flight and do everything in their control to ensure flights depart and arrive on time," A4A said.