Flight delayed or cancelled? Checked baggage doesn’t arrive on your flight? New Federal rules now in effect require airlines to pay you back automatically and immediately.
Refunds will be in the original form of payment, such as credit card refund or returning the miles to your frequent flyer account. Vouchers and credits for a future flight are specifically outlawed, unless you actually request one instead of money.
The refund is to be automatic, without any specific request or additional effort from the affected passenger.
It’s the reverse of being offered a voucher and then have to haggle with the airline, or with your travel insurance company, to get your money back.
The new mandate from the US Dept. of Transportation is in response to years of consumer complaints.
If your flight is canceled or delayed by more than three hours for a domestic itinerary, or six hours for an international itinerary, you’re automatically entitled to a refund.
“Passengers deserve to get their money back when an airline owes them – without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement when the regulation was announced this past spring. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
The new rule also require compensation for significant itinerary changes, such as a change of departure or arrival airport, and for services you paid for but did not receive, such as on-board Wi-Fi or an upgraded seat.
And it applies for any reason, including cancellations or delays for mechanical issues, even weather.
“Passengers deserve to get their money back when an airline owes them – without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg during the announcement of the new guidelines.
The refund must be issued within seven business days for credit card purchases and 20 calendar days for other payment methods, such as frequent flyer miles.
New Airline Refund Rules – Good News, Bad News
Airlines and ticket agents must provide full refunds of the ticket purchase price, minus the value of any portion of transportation already used.
The refunds must include all government-imposed taxes and fees and airline-imposed fees, regardless of whether the taxes or fees are refundable to airlines.
More good news is that the new rules also require disclosure of “hidden fees”, such as for carry-on luggage and changing or canceling a reservation, at the first point where a price and schedule are shown on the airline’s website.
Charges for carry-on are mostly by the so-called low-price airlines, and those hidden fees can raise the ticket price to the same as a top airline.
Airlines also are now required to inform passengers that they have a guaranteed seat without additional fees. But it does not prevent airlines from charging for preferred and premium seating, such as exit-row seats and those near the front of the cabin.
That’s the good news.
The bad news is that the new airline refund rules do not apply to the massive computer outage that grounded flights around the world on July 19 plus affecting banks and other business services, such as check-out cashiers in stores.
And, the new rules apply only to US carriers only, not to foreign airlines which fly to and from the USA.
New Airline Refund Rules – What to Expect
If your flight is canceled –
You will receive a full refund if your flight is canceled in the form you paid – either credit card or frequent flyer miles.
If you prefer to proceed to your destination, you may choose another flight, travel credit, or alternative transportation options offered by the airline.
If your flight is delayed or the itinerary is changed significantly –
Airlines are now required to provide refunds for “significant changes” to the itinerary.
This includes instances where your flight’s scheduled departure or arrival time is adjusted by three hours or more on domestic trips or six hours or more on international trips.
You are also eligible for a refund if the airline changes your departure or arrival airport, adds a stop to your itinerary, downgrades your service class, or fails to accommodate your disability adequately.
In the case of canceled flights, passengers will receive a refund only if they decline any alternative transportation or travel credits the airline offers.
Issues with baggage and additional services-
If your checked baggage is significantly delayed, you are entitled to a refund of the baggage fee, provided the bags are not delivered within 12 hours after a domestic flight or between 15 and 30 hours following an international flight, depending on the flight’s length.
If you pay for added services like Wi-Fi, seat selection, or in-flight entertainment and the airline does not deliver, you are also entitled to a refund.
When will the rules take effect?
These changes will be phased in over the next 6 to 12 months, as stated by the DOT.
Full information about these new passenger rights is available on the US Dept. of Transportation website.
New Airline Refund Rules – What it Means
These new rules are projected to save consumers more than $500 million annually. That means it could cost airlines more than $500 million annually, so some experts are predicting it will mean higher airfares.
Stay tuned.
ecoXplorer Evelyn Kanter is a journalist with 25+ years of experience as a newspaper and magazine writer, radio & TV news producer & reporter, and author of guidebooks and smartphone apps – all focusing on travel, automotive, the environment and your rights as a consumer.
ecoXplorer Evelyn Kanter currently serves as President of the International Motor Press Assn. (IMPA).
ecoXplorer Evelyn Kanter also is a member of the North American Travel Journalists Assn. (NATJA) and the North American Snowsports Journalists Assn. (NASJA).
Contact me at evelyn@ecoxplorer.com.
Copyright (C) Evelyn Kanter
[…] Earlier in November, the Department of Transportation announced it would begin enforcing a new rule that requires airlines to provide automatic refunds to passengers for canceled or significantly delayed flights. […]