U.S. Airlines are now required to issue automatic refunds for a canceled or changed flight, according to a new Biden administration rule now in effect.
President Joe Biden on Tuesday said the new provision means good news for passengers ahead of the busy holiday travel season.
“As of this week, Americans will get automatic refunds if their flights are altered because of a cancellation or significant delay,” Biden said in a statement on X (formerly Twitter). “That’s a big deal for folks who will be flying to visit loved ones this holiday season.”
According to a survey conducted by online travel guide The Vacationer, nearly 46 percent of American adults say they have little or no confidence in airlines being able to avoid interruptions such as cancellations and excessive delays this holiday season.
But the Department of Transportation (DOT) says this new provision holds airlines accountable and provides protection for consumers affected by changed or canceled flights by no fault of their own.
“Passengers deserve to get their money back when an airline owes them – without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement earlier this year when the rule was finalized. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
Under previous guidelines, airlines were allowed to establish their own rules for what kind of flight changes warranted a refund. The new standard, according to DOT, defines the specific circumstances in which passengers are eligible to get their money back.
Passengers are entitled to a refund for the following 3 situations:
Canceled or Significantly Changed Flights
If a flight is canceled or “significantly changed,” passengers are entitled to a refund.
“Significant changes to a flight include departure or arrival times that are more than three 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,” as defined in a readout about the new rule.
Significantly Delayed Baggage Return
A refund will be granted to passengers who file a mishandled baggage report and whose checked bag is not delivered within 12 hours of their domestic flight arriving at the gate. For international travel, refunds will be provided for checked bags not delivered within 15 to 30 hours of their flight arriving at the gate.
Extra Services Not Provided
If passengers paid for an extra service and an airline failed to provide that service, they are entitled to a full refund on that fee. This includes services such as Wi-Fi, seat selection, or inflight entertainment.
Additionally, airlines are responsible for notifying affected customers of their right to a refund.
The refunds must also be automatic, meaning that passengers must get their money back without having to request a refund or jump through hoops. Airlines will be required to pay the full refund of the original purchase price of the ticket, including taxes and fees. Passengers will be refunded in their original form of payment, such as cash, credit card, or airline miles, according to the new rule.