US Airlines Now Required to Automatically Provide Refunds for Cancelled Flights

The U.S. Government made a pro-consumer move Monday, just in time for the holiday season when millions of travelers are looking to fly across the country and overseas. This decision adds convenience and reduces stress for customers in the event of delayed or canceled flights.

Easier Refunds for Passengers

The U.S. Department of Transportation's (DOT) new refund rules for U.S. airlines went into effect on Monday. This rule states that refunds on delayed or canceled flights must be automatically processed without requiring the customer to request the refund. 

Transportation Secretary Pete Buttigieg made a statement back in April when the rule was first introduced:

“Passengers deserve to get their money back when an airline owes them - without headaches or haggling...Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
 

Before the new ruling, customers would have needed to request a refund through the airline's customer service department in the event of a cancelation or significant delay. Airlines already issue refunds for flights that are canceled by the airline, airport, or a governing body, but now, airlines will have to process these refunds as soon as possible.
 

It's also now required for airlines to complete refunds within seven days for credit card purchases and within 20 days for non-credit card purchases.

Details on Delayed Flights

For this new rule to be applied to delayed flights, the flight would either need to be delayed by more than six hours for a global itinerary or more than three hours for a domestic itinerary. The airline should then give customers the option to cancel their ticket purchase and receive a full refund to the customer's original form of payment.

The DOT's new rule also defines what constitutes a "significant delay" across all U.S. airlines. Each airline used to have its own rules for how long the delay would need to go on for a refund to be warranted. 

Additionally, the DOT's new policy includes "significantly changed" flights. A significantly changed flight can apply to flights that:

• Require the aircraft to fly to a different arrival airport.
• Require a new connected flight.
• Require the passenger to downgrade his or her seat.
• Require the flight to involve an airport or aircraft that's "less accessible or accommodating to a person with a disability".

Under any of these circumstances, airlines should offer the customer a full refund should he or she refuse these new changes.

Refund terms apply to "significantly delayed" and "significantly changed" flights similar to canceled flights. Should the customer opt to receive a refund, it must be a full refund processed automatically to the original payment method.

Additional Refund and Credit Changes

U.S. airlines entitle travelers to refunds on checked baggage fees if their luggage doesn't arrive on time at their destinations. If the luggage isn't delivered within 12 hours on a domestic itinerary or 15 to 30 hours on a global itinerary, despite the customer filing a mishandled baggage claim, the airline will issue a refund on the luggage fee.

For services and add-ons that travelers pay for that aren't available, the airline will also issue a refund for that absent service, such as in-flight Wi-Fi.

Flight credit will also be available longer for certain customers. If a traveler is restricted from flying due to an advisory by a doctor or government official, the traveler's flight credit will have its expiration date extended by at least five years. Passengers must apply for this credit and show a letter or other proof to support this request. This change will take effect in May of next year.