A federal rule announced Wednesday will require airlines to quickly give cash refunds — without lengthy arguments — to passengers whose flights have been canceled or seriously delayed, the Biden administration said.
“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement.
The rule from the Transportation Department says passengers who decline other reimbursement like travel credits are to get cash refunds.
It applies when a flight is canceled or has a “significant change,” the administration said.
A “significant change” includes when departure or arrival times are three or more hours different from the scheduled times for domestic flights or six hours for international flights, and when the airport is changed or connections are added, it said.
Passengers are also to get refunds when their baggage is 12 hours late in delivery for domestic flights.
The new rule comes after promises to hold airlines accountable after major disruptions that made travel hell for passengers, including the 2022 Southwest Airlines meltdown, which resulted in almost 17,000 significantly delayed or canceled flights and a missing baggage nightmare.
The Transportation Department said that the new rule means refunds are automatic and that “airlines must automatically issue refunds without passengers having to explicitly request them or jump through hoops.”
Also announced Wednesday was a rule requiring airlines to more clearly disclose so-called junk fees upfront, such as surprise baggage or other fees, the department said.
It said that rule is expected to save fliers around $500 million a year.
The surprise fees are used so tickets look cheaper than they really are, and then fliers get the unwelcome surprise of fees on checked bags, carry-on bags or reservation changes — or even discounts that are advertised but apply to only part of the ticket price, officials said.
Airlines will also have to tell fliers clearly that their seats are guaranteed and that they don’t have to pay extra to ensure they have seats for flights, according to the Transportation Department.
Airlines for America, an industry trade group, said that its member airlines “offer transparency and vast choice to consumers from first search to touchdown” and that they do offer cash refunds.
The 11 largest U.S. airlines returned $10.9 billion in cash refunds last year, an increase over $7.5 billion in 2019 but slightly down from $11.2 billion in 2022, the group said.
“U.S. airlines are providing more options and better services while ticket prices, including ancillary revenues, are at historic lows,” Airlines for America said.
Left out of the federal changes announced Wednesday are those involving “family seating fees,” but the Transportation Department said in a statement that “DOT is planning to propose a separate rule that bans airlines from charging these junk fees.”
Travelers have complained to the Transportation Department that children weren’t seated next to accompanying adults, including in some cases young children, department officials said last year.
Fees on bags specifically have made up an increasing amount of airline revenues, the Transportation Department said Wednesday in announcing the new rules.
