U.S. Forces Airlines to Automatically Refund Passengers for Flight Cancellations and Delays of More Than 3 Hours

  • Airlines must also refund passengers their checked bag fee if they don’t deliver the bag within 12 hours for domestic flights.

  • The automatic refunds were prompted by a new rule from the Department of Transportation, which went into effect Monday.

Us Airline Refund Rule
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Finding out your flight has been cancelled or delayed is bad enough, but having to fight or delve into the recesses of your airline’s website for a refund is another level of hell. Beginning this week, though, many of those battles will be left in the past because of a new rule from the Department of Transportation that forces airlines to issue automatic refunds to passengers in these situations.

Delayed and cancelled flights. Under the new rule, airlines are required to issue automatic refunds to passengers whose flights have been cancelled or subject to a “significant change.” Specifically, delayed flights are eligible for refunds after three hours for domestic flights and six hours for international flights.

That’s not all. The government also considers the following to be significant changes: departures or arrivals from a different airport, more connections than expected, and downgrades to a lower class of service.

The Department of Transportation’s new rule was announced in April but went into effect on Oct. 28.

Bags and other fees. The new refund requirements don’t only apply to cancellations and delays, they also apply to luggage. Airlines will have to provide refunds to passengers who paid checked bag fees if their bag isn’t delivered within 12 hours of their flight’s arrival for domestic travel or 15-30 hours for international travel.

Furthermore, have you ever paid for Wi-Fi beforehand only to find out that your flight doesn’t offer Wi-Fi? Well, fees for Wi-Fi and other add-ons that the airline doesn’t end up providing are now refundable, too. These include seat selection and in-flight entertainment.

Goodbye to obligatory vouchers. The Department of Transportation stipulates that airlines must refund passengers in cash or in their original form of payment. The agency explained that it put the requirement in place because passengers reported receiving “a travel credit or voucher by default from some airlines instead of getting their money back,” thereby preventing them from rebooking on another airline without hassle.

Companies must now deliver refunds promptly, or within seven business days for credit card purchases and 20 calendar days for other payment methods.

Industry response. Airlines were, unsurprisingly, not exactly happy about the new rule. The International Air Transport Association (IATA), an industry group that represents roughly 330 airlines, said in a statement that the rule “far exceeded DOT’s authority.” IATA added that the rule would raise costs for airlines and raise ticket prices for consumers.

Before the new rule, airlines each set their own standards for what circumstances qualified for a refund. Consumers also often had to scour airlines' websites to search for information on how to request a refund or spend hours on the phone speaking to customer service.

87% of all complaints are about refunds. In the announcement for the rule, the agency said that at the height of the COVID-19 pandemic, 87% of all the complaints it received were about refunds. It added that flight refund problems continue to make up the bulk of complaints it receives.

“Passengers deserve to get their money back when an airline owes them—without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement on X on Monday. “Airlines are required to provide prompt cash refunds without passengers having to ask.”

Image | Jon Tyson | Unsplash

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