The days of airlines leaving customers in the financial lurch after canceling their flights may be coming to an end.
On Wednesday, the U.S. Department of Transportation issued two new rules that are aimed at tackling delayed refunds and hidden junk fees for consumers. Airlines will be required to promptly refund customers who are owed money and to inform customers about service fees before they purchase their fares and additional services.
“Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them — without having to ask,” Transportation Secretary Pete Buttigieg said in a statement. “Today’s announcements will require airlines to both provide passengers better information about costs before ticket purchase, and promptly provide cash refunds to passengers when they are owed — not only saving passengers time and money, but also preventing headaches.”
Customers will be entitled to an automatic cash refund if their flights were canceled or “significantly changed,” if their baggage was extremely delayed, or if an airline failed to provide a service the customer paid for, such as Wi-Fi or in-flight entertainment. Examples of significant changes include delays of more than three hours on domestic flights or more than six hours on international flights, increased connections, and a new airport for arrivals and destinations. Under the new regulation, customers won’t be required to request a refund in order to obtain it. The cash refunds must also be issued within seven business days or up to 20 business days for other forms of payment. Airlines will be required to repay customers the full amount either in cash or through the customers’ initial form of payment.
Airlines will also be required to disclose individual service fees up front, to explain their fee policies for carry-ons and cancellations prior to purchase, and to share that information with travel agencies and other third-party travel-booking websites. The rule will also prevent airlines from advertising discounted flights that have hidden additional fees unrelated to the lower base fare.
The implementation period for these new regulations will vary for the various stakeholders. Airlines will have six months to comply with the refund changes but up to 12 months for many of the service-fee regulations.
