US passenger compensation fines threaten flight cancellations

CONTINENTAL Airlines CEO, Jeffery Smisek has indicated that carriers would rather cancel flights than face the US Transportation Department's forced compensation to pay passengers for delays.

Speaking at a recent investor conference in New York, Mr Smisek stated his fear might develop after April when passengers kept on delayed flights in excess of three hours would be entitled to compensation of up to US$27,500 per person, which results in a $5 million loss on a fully-packed 757.

Aviation consultant Denny Kelly said the airline position had been taken to induce legislators to repeal the law, according to an NBC news report. Interviews with passengers suggest that the plan might backfire, with many stating that they would be willing to use a different carrier in the event of excessive cancellations, said the report.

(Source: www.schednet.com)