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In a couple of final rulings announced this morning by the U.S. Department of Transportation, significant changes are coming through increased passenger protections, transparency, and cracking down on airline junk fees. Here's what this regulation means for you and when it's expected to go into effect.
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U.S. DOT Issues Final Ruling on Airline Junk Fees, Transparency, and More
The newly finalized rules, courtesy of the U.S. DOT, target two aspects of air travel: refunds and junk fees. Here's a high-level overview of the components of each rule.
Cash refund requirements
As anyone who has encountered an issue with an air carrier and tried to get a refund can attest, the process doesn't always run smoothly. Sometimes, you'll get the runaround; other times, you'll get a travel credit or flight voucher, and, in some cases, maybe a cash refund. The new rule seeks to rectify this, requiring airlines to provide “automatic refunds of tickets and ancillary service fees.”
The rule states that passengers are entitled to a refund for:
- Canceled or significantly changed flights: You're entitled to a refund if your flight is canceled or significantly changed. “Significantly changed” is defined as:
- Adjustments to departure arrival times that are more than three hours for domestic flights or 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.
- Significantly delayed checked bags: If you check a bag and it's not delivered within a certain number of hours (12 hours for domestic and 15–30 hours for international, depending on the flight's distance), you can file a mishandled baggage report and get a refund of the checked bag fee.
- Services not rendered: If you paid for Wi-Fi, seat selection, or inflight entertainment but the airline didn't provide the service, you can request a refund.
Related: Best Credit Cards for Flight Delay Insurance
There are still questions on how some of these rules will be enforced or how airlines will calculate partial refunds. There's plenty left to iron out, but if one thing is clear, the DOT has stated that refunds due will be:
- Automatic: No hoop jumping required.
- Prompt: Refunds should be issued within seven days of coming due for credit card purchases, or 20 days for other payment methods.
- Made in cash or to the original form of payment: Unless you accept alternative compensation, an airline isn't allowed to refund you with travel credits, vouchers, etc.
- In full: Airlines and travel agencies will need to provide full refunds, less the value of any transportation already used — taxes and fees included.
Related: Which Credit Card Offers the Best Baggage Delay Coverage?
Protection against junk and service fees
The second DOT ruling focuses on fee disclosures. The perceived goal is to make airlines and agencies selling airline tickets clearly state what they're charging and why, helping you make an informed decision — rather than proceeding through the booking process only to see the all-in price at the end.
Specifically, the rule seeks to make airlines and ticket agents:
- Disclose fees conspicuously.
- Spell out fee policies.
- Share fee information with companies that advertise flight quotes.
- Advertise that seats are guaranteed as part of the fare and state that fee-added seat purchases aren't required to fly.
- Provide passenger-specific fee information for those with elite status, military affiliation, etc.
- Refrain from advertising promotional discounts on base fares that don't include taxes and carrier-imposed fees.
There's a lot here, which explains why airlines and travel agencies have until 2025 and 2026 to implement the necessary changes. More on this shortly.
Additionally, in the press release, the DOT indicated that it plans to “propose a separate rule that bans airlines from charging these junk fees.” In short, this might not be the last we hear from the DOT on related airline regulations.
Related: The Best Flexible Rewards Points for Free Travel
When will the rulings take effect?
While there's a lot to like with the new rulings, the caveat is that they won't take effect immediately. Like other rulings handed down by other government agencies, each must undergo the necessary steps before implementation.
Principally, the rules will need to be published in the Federal Register. The final rulings indicate neither has been published as of April 24, 2024, so the implementation clock won't start until that happens. However, that's expected to happen this week.
Based on this timeline, the rules should kick into effect after six months, but there's an asterisk here. Each ruling has several components, which means the implementation schedule could vary.
In other words, these changes likely won't start until later this year. And on top of that, airlines and travel agencies have until April 20, 2025 (and into 2026 for some agencies) to comply with the rulings and meet the new requirements.
Related: Claiming Compensation for a Delayed, Overbooked, or Canceled Flight in the U.S. and E.U.
Final Thoughts
The new rulings handed down by the U.S. DOT should smooth out a few aspects of travel that consistently frustrate travelers. Ideally, handing some semblance of power back to the consumer will make travel better and resolve issues more easily when they arise.
But with new regulation comes unintended consequences. That much is a given. Take away a source of revenue for airlines, and you might soon be paying more for airfare. We can't predict the future, but if we had to guess, the cost of these regulations would likely be passed on to consumers in some way, shape, or form. Airlines aren't simply going to give up on sources of revenue.
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