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Until now, U.S. travelers have not had proper airline protection for canceled and significantly changed flights, delayed baggage, and other factors. But now, the U.S. Department of Transport (DOT) has implemented several new rules for airlines to provide refunds when required. Here's a summary of these new airline refund rules.
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New Airline Refunds and Other Consumer Protections Law
Earlier this year, the U.S. DOT finalized a few rules requiring airlines to provide refunds for canceled flights, delayed baggage, missing in-flight services, and more. This is the first time the U.S. has had such regulations to protect travelers. Many of these rules are now in effect.
Timeline of the DOT rules
Although the rulings were handed down in early April and enacted in mid-May, not everything immediately went into effect. But most notably, airline carriers and travel agents had until October 28, 2024, to implement the relevant requirements to put the rules into effect regarding airline refunds for significantly changed itineraries, delayed baggage, and in-flight services.
And there's still more to come. Airlines still have until April 28, 2025, to meet the refund requirements for travelers with serious, infectious diseases.
Summary of the new DOT airline refund rules
These rules require both U.S. and foreign airline carriers to provide automatic refunds to passengers when a flight is canceled or changed significantly. Additionally, passengers can get a refund for factors out of the airline's control, such as bad weather.
Airlines must provide refunds promptly. Specifically, this means seven business days for flights paid for with a credit card and 20 business days for flights paid for by other means. The airline must inform customers of their right to a refund before offering alternative transportation and travel credits, vouchers, or other compensation.
The law further introduces measures to refund travelers for ancillary services they did not receive (Wi-Fi, paid in-flight entertainment, seat selection, etc) and delayed baggage. Lastly, travelers who have a severe, communicable disease and provide valid evidence of such by a healthcare professional will get travel credits or vouchers valid for five years after the date of issuance.
Airlines Refunds Required for Significantly Changed or Canceled Flights
The Department of Transportation's new rules ensure passengers are refunded if a flight is canceled or significantly changed and the traveler opts not to travel. “Significantly changed” is defined as follows:
- Adjustments to departure arrival times that are more than three hours for domestic flights or more than six hours for international flights.
- Departs or arrives from a different airport.
- Increases in the number of connections to get to the destination.
- Downgrades in class of service.
- Connections to planes or airports that are less accessible or accommodating for those with a disability.
While the initial rule required automatic refunds, this aspect isn't yet in place. Travelers still need to request a refund within the time frame stipulated by the airline. Customers must receive the refund within seven business days if they paid with a credit card or within 20 business days if they paid using a different method.
Passengers will receive a refund for the full amount of their ticket, less any completed travel segments. That includes government-imposed taxes and fees and airline-imposed fees, regardless of whether the taxes or fees are refundable to airlines.
Related: How To Get Compensation for Delayed or Cancelled Flights
Airline Refunds for Delayed Baggage
This legislation also includes reimbursement of checked baggage fees for passengers who do not receive their luggage within a stipulated time frame. Specifically, airlines must refund checked baggage fees in three scenarios:
- Domestic flights: A checked baggage delay of more than 12 hours after arrival.
- International flights less than 12 hours: A checked baggage delay of more than 15 hours.
- International flights more than 12 hours: A checked baggage delay of more than 30 hours.
The passenger must fill out a mishandled baggage report with the airline upon arrival (in each scenario) to claim a refund.
Related: Which Credit Card Offers the Best Baggage Delay Coverage?
Refunds for In-Flight Services
One clause of this law protects travelers who paid for and did not receive an in-flight service. The law does not specifically enumerate all services, but they could include Wi-Fi, premium in-flight entertainment, seat selection, and other paid upgrades. It's unclear how to request a refund for these services, but it's likely this process starts by reaching out to customer service.
Coming Soon: Refunds for Illnesses
Finally, passengers with a “severe, communicable disease” can claim travel vouchers or credit if they are unable to fly. These vouchers are valid for five years. However, it's worth noting that airlines can require that the passenger provide evidence of the disease from a healthcare professional to claim the voucher. So you should be ready to provide this information.
Of course, this regulation refers to the recent COVID-19 pandemic. However, it applies regardless of any declaration of a public health emergency. Unlike refunds for canceled or significantly changed flights, airlines can charge a processing fee for the travel voucher.
Airlines have until April 28, 2025, to meet the requirements for this rule.
Our Take
These are great changes for U.S. travelers. Countless passengers, myself included, have experienced canceled or significantly changed flights. While the nightmare stories can make for interesting conversations, they are not fun experiences. Of course, receiving a refund for a service or product that wasn't delivered isn't anything extraordinary. But we're glad that there's now a mandate for it.
Airlines can still offer alternative transportation and travel credits, vouchers, or other compensation. However, that is only an option after they inform the passenger of their right to a refund. Passengers have the right to choose between a refund or other compensation.
While this legislation goes a long way to protect customers' rights to get a refund for airline disruptions, it still requires manual action by travelers. To get a refund for delayed or significantly changed flights, passengers must request the refund within a stated timeframe. To get refunded for delayed baggage, for example, passengers must fill out the mishandled baggage report upon arrival.
The bottom line is that airlines can't just take advantage of customers or buy them off with vouchers and travel credit. Many customers need monetary reimbursement rather than just travel credit. If the passenger is not directly responsible for missing a flight, they now have full recourse and reimbursement.
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