New Federal Rule Requires Airlines to Provide Automatic Refunds for Canceled or Significantly Delayed Flights

The Biden administration has announced new rules requiring airlines to automatically issue cash refunds for flights that are canceled or significantly delayed, effective in late October. This ensures that passengers no longer have to request refunds and simplifies the process. The Department of Transportation (DOT) defines a significant change as a delay of more than three hours for domestic flights and more than six hours for international flights. Airlines can still offer alternative options, but they must prioritize passengers’ right to cash refunds. Other refund rights include changes in departure/arrival airports, downgraded service, or added connecting stops. Refunds must be issued automatically and within seven days for credit card purchases or 20 days for other payment methods.

DOT Finalizes Passenger Refund Rules

The Department of Transportation (DOT) has finalized rules that require airlines to promptly refund passengers if flights are canceled, significantly delayed, or have substantial changes to the itinerary. Airlines must offer refunds in cash or in the original form of payment, and passengers can also opt for travel credit or alternative travel arrangements.

New Airline Refund Rules Protect Consumers from Delays, Hidden Fees

The Biden administration has issued new rules that require airlines to provide automatic cash refunds for canceled flights and significant delays. The rules also require airlines to disclose upfront the fees they charge for checked and carry-on bags, canceling or changing a reservation, and other services. The Transportation Department estimates the new rules will save consumers more than $500 million a year.

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