Biden administration announces final rule that requires airlines to issue automatic cash refunds when owed

The new rule makes refunds to passengers easy when airlines cancel or significantly change their flights, significantly delay their checked bags, or fail to provide the extra services they purchased.

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Image Credit: The Wall Street Journal

The Biden administration issued a final rule that requires airlines to provide prompted cash refunds when owed. The new rule makes refunds to passengers easy when airlines cancel or significantly change their flights, significantly delay their checked bags, or fail to provide the extra services they purchased.

The U.S. Department of Transportation (DOT) said the new rule “creates certainty for consumers by defining the specific circumstances in which airlines must provide refunds.”

“Passengers deserve to get their money back when an airline owes them—without headaches or haggling,” Pete Buttigieg, U.S. Transportation Secretary, said. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”

While refund policies differed from airline to airline and made it difficult for “passengers to know or assert their refund rights,” DOT said the final rule improves consumer experience by requiring refunds be automatic, prompt, either cash or original form of payment and full refunds of the ticket purchase price.

Passengers are entitled to a full refund for the following reasons as outlined by DOT:

  • Canceled or significantly changed flights: Passengers will be entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered. For the first time, the rule defines “significant change.” Significant changes to a flight include departure or arrival times that are more than 3 hours domestically and 6 hours internationally; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability.
     
  • Significantly delayed baggage return: Passengers who file a mishandled baggage report will be entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight.
     
  • Extra services not provided: Passengers will be entitled to a refund for the fee they paid for an extra service—such as Wi-Fi, seat selection, or inflight entertainment—if an airline fails to provide this service.

To learn more about the final rule, consumers can read about their protections here, or file an airline complaint with the Department here.

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