New Rules Will Force Airlines to Provide Refunds for Delayed, Canceled Flights

The Biden administration announced a game changer for anyone who has ever dealt with frustrating flight delays and cancelations or hidden fees when booking airline tickets. On Wednesday, the U.S. Department of Transportation issued new rules that will require airlines to provide an automatic refund, in full, in the event a flight is canceled or significantly delayed.

"Passengers deserve to get their money back when an airline owes them—without headaches or haggling," U.S. Transportation Secretary Pete Buttigieg said in a statement. "Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers."

Today's new rule makes it easy for passengers to obtain refunds when airlines cancel or significantly change their flights, delay their checked bags, or fail to provide the ancillary services they purchased.pic.twitter.com/S2Qe0d2dq9

— U.S. Department of Transportation (@USDOT) April 24, 2024

According to the new rule, passengers will be entitled to a refund if their flight is canceled or "significantly changed," in the event they do not accept alternative transportation or travel credits. Significant changes to a flight refer to departure or arrival times that are more than three hours for domestic flights and six hours for international flights.

The rule is also requiring airlines to refund passengers checked baggage fees over mishandled or late bags, if not delivered within 12 hours of a domestic flight or 15 to 30 hours internationally, depending on the length of the flight. Airlines will likewise be on the hook for reimbursing passengers for extra services that fail to be provided such as Wi-Fi, seat selection, or in-flight entertainment.

Airlines must provide refunds in cash or whatever the original payment method was. For credit card purchases the refunds must be given in seven business days, and 20 calendar days for other payment methods.

In a second rule, the executive department is cracking down on "junk fees" when airlines charge passengers for checked bags or changing or canceling reservations. The rule is aimed at ending "discount bait-and-switch tactics" that airlines use to hide the full cost of discounted flights.

Going forward, airlines must disclose any additional fees up front and be transparent about extra fee policies prior to the purchase of a ticket.

“Airlines should compete with one another to secure passengers’ business—not to see who can charge the most in surprise fees," Buttigieg said in a follow-up press release. “DOT’s new rule will save passengers over half a billion dollars a year in unnecessary or unexpected fees by holding airlines accountable for being transparent with their customers."

Unfortunately, the new rule likely won't go into effect in time for any upcoming summer travel plans. According to the U.S. DOT, the various provisions of the new rules will be implemented on different timelines ranging from six months to two years. But at least there is finally a light at the end of the tunnel for travelers.