From the Detroit Free Press:
Compensation abroad for airline passengers whose flights are canceled is changing with the smoke of a European volcano. Europe has a generous compensation policy, which forces airlines to give each passenger as much as $775 when a flight is canceled. In contrast, the United States has no similar penalty, especially for cancellations blamed on weather or natural disasters. Airlines typically provide a hotel room when a mechanical problem delays a traveler overnight…Jan Brueckner, an economics professor who studies the airline industry at the University of California, Irvine, said airlines already know they must be reliable because otherwise travelers will go elsewhere. "It's not like the airlines can screw their passengers with impunity," Brueckner said. "Airlines have every incentive to run a good operation. Happiness and loyalty of passengers depend on it." He expected U.S. airlines to block any requirements for them to provide compensation for cancellations. "That's a non-starter," Brueckner said. "They would scream bloody murder in response to that kind of movement."

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