The United States Department of Transportation (DOT) has implemented a new rule requiring airlines to automatically issue refunds for significantly delayed, canceled or disrupted flights.
The sweeping measure is aimed at enhancing transparency, protecting customers and minimize refund-related hassles.
"Passengers deserve to get their money back when an airline owes them - without headaches or haggling," Pete Buttigieg, the Transportation Secretary said this spring. "Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers."
Domestic flights delayed over three hours, international flights delayed over six hours, and canceled flights qualify for a full refund that must be processed automatically.
The policy also covers "significantly changed" flights, which the department refers to as "departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability."
Refund guidelines also apply to delayed flights meaning refunds must be processed within seven days for credit card payments and 20 days for other methods.
The refunds cannot be covered by airline vouchers or credits if they weren't paid for that way. Instead, airlines must issue it to the original form of payment.
The sweeping changes are not limited to just airline tickets. The rule mandates that airlines must refund checked bag fees if luggage isn't delivered within 12 hours domestically or 15-30 hours internationally.
Fees for non-functional or unavailable services like onboard Wi-Fi, seat selection, and inflight entertainment must also be refunded.
Passengers who bought a ticket but were unable to travel due to medical reasons or government restrictions will receive airline credits valid for five years.
As of this year, the DOT has taken a critical look at the operations of major airlines. Delta, American, United, and Southwest Airlines had to submit detailed reports on their reward programs over a federal probe about their loyalty program practices.
The department fined American Airlines $50 million for violating disability laws. In October, Lufthansa Airlines was hit with a $4 million fine for kicking 128 Jewish passengers off a plane.
The DOT is embroiled in a lawsuit involving Airlines for America, a trade group that represents six top airlines, over a new rule that requires upfront disclosure of so-called airline junk fees.
