Airlines will be forced to offer cash refunds for delayed or canceled flights without customers having to ask, under major new rules being finalized by the Biden administration.
The new planswhich has been nearly three years in the making, will require airlines to provide automatic refunds within days of a flight cancellation or “significant” delay.
In a major change for consumers, regulations will classify a delay as “significant” when it lasts at least three hours for domestic flights and six hours for international routes.
Under current rules, airlines can set their own standards for what type of flight change warrants a refund, giving them much more wiggle room.
The changes aim to eliminate the often long and frustrating process that customers are forced to go through to get a refund, which can involve hours of waiting on the phone or completing “cumbersome” digital paperwork.
The new rules, which have been nearly three years in development, will require airlines to provide automatic refunds within days of a flight cancellation or a “significant” delay.
The regulations, which are being finalized by the U.S. Department of Transportation, will also require airlines and ticket agents to disclose any additional fees along with the full fare when purchasing tickets online.
The department said consumers will save up to $543 million annually if they are informed about excessive airline fees, which include baggage costs and change and cancellation fees.
The government will also require airlines to refund baggage fees if bags are not delivered within 12 hours of the arrival of domestic flights or 15 to 30 hours after the arrival of an international flight.
Refunds will also be required for additional inflight services, such as WIFI, seat selection or inflight entertainment, if they are faulty or not provided by the airline.
Carriers will also be forced to inform passengers that they have a guaranteed seat for which they are not required to pay extra, although they will still be able to charge people for choosing specific seats.
Airlines and ticket agents are required to return money within seven business days after the refund is due for credit card purchases and 20 calendar days for other payment methods.
They cannot substitute cash reimbursement for vouchers or travel credits unless the passenger chooses a different type of compensation.
“Passengers deserve to get their money back when an airline owes them, without headaches or haggling,” said US Transportation Secretary Pete Buttigieg.
“Our new rule sets a new standard for requiring airlines to quickly provide cash refunds to their passengers.”
“Passengers deserve to get their money back when an airline owes them, without headaches or haggling,” said US Transportation Secretary Pete Buttigieg.
Airlines will also be required to refund baggage fees if bags are not delivered within 12 hours of arrival for domestic flights or 15 to 30 hours after arrival of an international flight.
Airlines for America, a trade group representing major airlines, said airlines “offer transparency and broad choice to consumers from the first search to landing.”
“U.S. airlines are committed to providing the highest quality of service, including clarity on prices, fares and ticket conditions.”
The group said the 11 largest U.S. airlines issued $43 billion in refunds to customers between 2020 and 2023. AP reported.
The new rules will take effect over the next two years, the department said, as part of a broad administrative campaign against junk fees.
Last month, a US Senate committee said it was stepping up its investigation into billions of dollars in annual airline fees.
It noted that between 2018 and 2022, the total revenue of major US airlines from baggage fees increased from $4.9 billion to $6.8 billion.
Major airlines have come under fire in recent months for raising baggage fees and making it harder to earn frequent flyer miles in a bid to boost profits.
Earlier this month, JetBlue introduced dynamic pricing for check-ins baggage charges – the first major US airline to do so.