What to know about new federal policy requiring airlines to issue refunds for a canceled flight
A new federal rule will require airlines to refund travelers who face significant travel issues and should ease headaches for those trying to get refunds.
The U.S. Department of Transportation final rule, or regulation, requires airlines to issue automatic refunds in various situations, like a major shift in an arrival time or luggage delays. A news release announcing the regulation said that, prior to this, airlines dictated their own standards for refunds in these situations and varied from company to company.
“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg in an April 24 news release on the regulation. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
The release also detailed that the department is working on establishing other regulations, like banning fees to have a family sit together on a flight; improve flying quality for people in wheelchairs; and to make passenger compensation and amenities required in the case of delays or cancelations.
Here’s what to know about the new federal regulation:
When passengers can get a refund
There are three ways that travelers can receive a refund, according to the release.
First, they'll receive a refund if a flight is canceled or in the event of “significantly changed flights.”
The latter is defined in the release as departures or arrival times altered more than three hours for domestic flights or six hours for international flights; increases in the number of connections; departing or arriving from a different airport than intended; when a traveler is downgraded to a lower service class; or when a person with a disability is switched to a connection at an airport that is less accessible or accommodating to them.
The second way is when baggage return is significantly delayed.
Travelers who file a mishandled baggage report will receive a refund if a checked bag isn't delivered within 12 hours of a domestic flight arriving at its gate, or 15 to 30 hours for international flights, depending on the flight’s length.
The third way is if someone pays for a service, like wi-fi, a seat or inflight entertainment, and it's not provided.
How will refunds work?
The federal Department of Transportation rule also is intended to improve the process behind refunds. The release details four parts to this.
First, refunds must be automatic, and passengers don't have to request them to receive them. Next, the refunds must be within seven business days if the original payment was done through credit card and within 20 days if it was made through another payment method.
Third, the refunds must be reimbursed in cash or whatever payment method was used.
“Airlines may not substitute vouchers, travel credits, or other forms of compensation unless the passenger affirmatively chooses to accept alternative compensation,” the release reads.
Lastly, refunds must be of the full amount or whatever amount remains from any portion of travel already done. It also must include taxes and airline fees, “regardless of whether the taxes or fees are refundable to airlines.”
When will this change take place?
According to a document on the United States Federal Register, the new travel rules will go into effect on June 25.
The full document detailing the rule can be found here.
This article originally appeared on Milwaukee Journal Sentinel: New regulation requires automatic refunds over canceled flights
