DOT Changes Airline Refund Rules [What Qualifies, Who Is Affected]

The U.S. has long had fewer protections for travelers. Unlike other countries, airlines have historically had a lot of leeway regarding refunds, flight cancellations, and what they owe to passengers. Now, a new Department of Transportation (DOT) ruling has solidified passenger rights in the event of delays, cancellations, and luggage issues. Let’s take a look at what’s changing.

New DOT Rules Require Refunds for Irregular Operations

These new DOT rules are excellent news for those traveling on airlines, as they specifically lay out the situations in which an airline must refund passengers. In the past, wishy-washy language about “significant delays” left it up to an airline’s discretion to decide when a refund was due. Now, the DOT’s new ruling ensures that passengers receive prompt refunds when a variety of irregular operations occur:

• Canceled Flights: The passenger is refunded if the flight is canceled and they do not accept alternative flight options.
• Delayed or Altered Flights: The passenger is refunded if a flight is altered more than 3 hours domestically or 6 hours internationally, airports are changed, connections are increased, they are downgraded to a lower class of service, or those with a disability experience alterations to a less accessible aircraft.
• Delayed Baggage Return: The passenger is refunded the checked baggage fee if their luggage is not delivered within 12 hours of a domestic flight or 15 to 30 hours of an international flight (depending on the length of the flight).
• Ancillary Purchases: If amenities such as seat selection, Wi-Fi, or inflight entertainment are not provided on the flight, the passenger is refunded for the purchases.

In all these cases, airlines are required to automatically process refunds for passengers within 7 business days (for those who paid with credit cards) or 20 business days (for those who used other methods of payment).

Airlines are not allowed to offer travel credits or vouchers; instead, refunds must be made in cash or to the original form of payment. The exception is if passengers actively choose to accept a credit or voucher in lieu of a cash refund.

Finally, refunds must be complete and include all taxes and fees, even if those fees are nonrefundable to the airline.

DOT Rules Include Regulations for Pandemic Travel

The COVID-19 pandemic heavily impacted air travel, and airlines passed on their financial woes to customers. Delayed refunds, ridiculous changes in “delay” policies, and offers of travel credits meant passengers were often left without a ticket or the money they’d paid.

This ruling also requires that airlines must provide travel credits or vouchers when consumers are restricted by the government or advised by a medical professional not to travel. These vouchers must be transferable and valid for at least 5 years.

Final Thoughts

These changes have been sorely needed as passengers traveling within the U.S. have had very few rights regarding flight disruptions. It’s unfortunate that we aren’t seeing reimbursements like you’ll find within the European Union (especially since last-minute flight changes can be extremely expensive), but regulating language for airlines to follow is a step in the right direction.