Passengers will receive better protection and easier refund options under new federal rules for airlines, which will go into effect later this year. Travelers will have a clearer understanding of the total cost of flights before booking and will be eligible for refunds if things go wrong.
The Biden administration announced the rules on Wednesday, wrapping up a process that lasted more than a year. “This is a big day for America’s flying public,” said Transportation Secretary Pete Buttigieg.
The new rules include a provision that requires airlines to automatically issue cash refunds when flights are canceled or significantly changed. This means that passengers will no longer be forced to accept vouchers or credits, which can be difficult to use. Refunds must be issued within seven business days for credit card purchases and 20 calendar days for purchases made through other methods.
Other types of compensation are allowed only if a passenger chooses one of those alternatives. “No more defaulting to vouchers or credits when consumers may not even realize that they were entitled to cash,” Buttigieg said.
The rules also define what constitutes a “significant change” to a flight. A change is considered significant if a departure or arrival is different by more than three hours for domestic flights or six hours for international trips. Other changes considered significant include a change in departure or arrival airport, additional connections, a downgrade to a lower class of service, or service on planes that are less accessible for people with disabilities.
In addition to the refund rules, the new regulations require airlines and online travel booking sites to disclose upfront the fees for checked bags, carry-on bags, reservation changes, and reservation cancellations. These fees must be clearly noted and not shown through a hyperlink. Consumers must also be informed that they don’t have to pay for a seat assignment to travel and that a seat will be provided without an additional price.
“Healthy competition requires that, as a consumer, you comparison shop, which means knowing the real price of a trip before and not after you buy,” Buttigieg said. “Airlines will now be required to show you these costs up front, so you have all the information you need to decide what travel option is best for you.”
The new rules are expected to go into effect in about six months. Buttigieg said he hopes that by making refunds automatic, there will be less need for complaints and more flexibility for employees to perform audits or spot-checks of airline compliance.
