The Department of Transportation recently announced a new rule that will require airlines to provide passengers with automatic refunds in the event of flight delays, cancellations, or failure to provide paid-for services. These regulations are set to be implemented over the next six to 12 months.
Passengers will be entitled to refunds if their flight is canceled or significantly changed and they do not accept alternative transportation or travel credits offered by the airline. This includes domestic flights delayed by more than three hours and international flights delayed by more than six hours. Significant changes that make passengers eligible for a refund include changes in departure or arrival airports, increased connections, or being downgraded to a lower class.
Previously, airlines had their own standards for refund eligibility, leading to confusion for passengers. The new rule aims to simplify the process by making refunds automatic and prompt. Passengers will receive refunds within seven business days for credit card purchases and 20 calendar days for other payment methods.
In addition to flight refunds, passengers are also entitled to a refund of their checked bag fee if their bag is delayed, as well as refunds for extra services like WiFi or in-flight entertainment that were paid for but not received. The refunds must be in the original payment method used by the passenger.
The DOT highlighted that airlines must provide a full refund, including all government-imposed taxes and fees, as well as airline-imposed fees. This new rule comes after a surge in complaints from passengers in 2020 related to refunds and compensation for disrupted travel plans, particularly during the COVID-19 pandemic.
As travel resumes and summer vacations are disrupted by delays and cancellations, the new rule aims to provide passengers with a clearer and more efficient process for obtaining refunds in case of flight disruptions.