Airlines Must Give Cash Refunds for Canceled Flights Under New Rule
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Make your vacation plans with confidence: Airline passengers will now be entitled to automatic refunds if their flights are canceled or significantly delayed.
The Biden administration announced Wednesday that airlines must provide cash refunds to your credit card within seven days, and customers won’t have to call their airlines or complete paperwork to get their money back.
The new rule, issued by the Department of Transportation, applies to any trip to or from the U.S. when the customer does not take an alternative flight or accept a travel voucher instead of the delayed or canceled flight. Airlines can still offer travel credits to make up for flight cancellations, but they must notify customers of the cash refund option.
The administration also announced a separate rule Wednesday meant to prevent airlines from charging “junk fees.” Officials said that airlines will now be required to disclose baggage fees as well as flight change and cancellation fees when customers are buying tickets so there are no surprises later on.
“Airlines should compete with one another to secure passengers’ business — not to see who can charge the most in surprise fees,” Transportation Secretary Pete Buttigieg said in a statement.
What the new airline rules mean for you
As the department's changes go into effect over the next year, passengers will gain more clearly defined rights related to ticketing and airline refunds.
Notably, the Department of Transportation is laying out exactly what constitutes a “significant change" to a flight requiring a refund. Previously, airlines had their own refund policies for delayed flights, leading to confusion for customers.
Here are the situations included in the new definition of a significant change:
- Delays of three or more hours for domestic flights
- Delays of six or more hours for international flights
- Additional connections on the new route
- Changes to the departure or arrival airport
- Downgrades to a “lower class of service”
When flights are canceled or significantly delayed, airlines must now provide total refunds, including all taxes and fees, even if some of those taxes and fees are sunk costs for the airline (meaning they can't be recovered).
Lastly, under the new rule, passengers will also be entitled to refunds for baggage fees if their bag isn’t delivered within 12 hours for domestic flights, or within 15 to 30 hours for international flights.
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