In a win for flyers in the United States… the US Department of Transportation (DOT) has introduced a new rule to ensure US airlines give automatic cash refunds to passengers when flights are cancelled, changed significantly, or when bags are delayed.
The new rule aims to clear up confusing and inconsistent refund policies across airlines and to protect travellers’ rights.
Before this rule, carriers could set their own refund terms, leading to a maze of different rules that made it hard for passengers to understand their rights.
Consequently, DOT received many complaints, especially during the pandemic. In 2020, for instance, refund issues made up a staggering 87 per cent of all air travel complaints.
Now, passengers can get a refund for:
- Flights that are cancelled or changed significantly, and where passengers don’t accept alternative options.
- Baggage that’s delayed more than 12 hours for domestic flights or between 15-30 hours for international ones.
- Extra services like wi-fi or seat selection that the airline fails to provide after charging for them.
The rule also makes it easier for passengers to get their money back. US airlines must now:
- Automatically issue refunds without passengers having to ask.
- Give refunds within seven business days for credit card payments and 20 days for other methods.
- Refund the full amount, including any taxes and fees.
Carriers must also notify passengers promptly if their flight is cancelled or changed, informing them of their refund rights.
For travellers affected by government restrictions or medical advice due to serious diseases, US airlines must offer travel credits or vouchers. These must be transferable and valid for at least five years.
“Passengers deserve to get their money back when an airline owes them – without headaches or haggling,” US Transportation Secretary Pete Buttigieg said.
“Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
Flyers’ friend?
According to a DOT statement, the Department has taken a strong stance on consumer protection under the Biden-Harris Administration.
This includes significantly expanding flyer rights, issuing record fines against airlines for poor service, helping return over US$3 billion in refunds and reimbursements to passengers, and partnering with state attorneys general to address consumer complaints.
DOT is also looking into other changes to benefit travellers, like banning extra fees for family seating to ensure parents can sit with their kids without extra charges, making compensation and amenities mandatory for passengers during flight delays or cancellations caused by airlines, and improving rights for wheelchair-using passengers.
US airlines have between six months to a year to implement these new rules.
Aussie angle
Where do Australian airlines stand when it comes to the issue of paying compensation for delays and cancellations? Read about that here.
After the release of the Federal Government’s Aviation Green Paper late last year, Qantas said that compensation for flight delays would inflate airfares.
Two in five (40 per cent) respondents in a major study by CHOICE said they experienced cancelled or delayed flights in 2023.
