Biden administration ordering airlines to provide refunds in lieu of vouchers

Refunds must be offered in full and be prompt and automatic to the customer's original form of payment
Superbloom Explainer
Posted at 6:50 AM, Apr 24, 2024

The Biden administration released new rules on Wednesday requiring airlines to provide cash refunds in lieu of vouchers in certain situations.

The Department of Transportation said U.S. airlines will be required to issue refunds when they cancel or significantly change flights, significantly delay checked bags, or fail to provide promised extra services.

The new rules stipulate that U.S. airlines must offer a cash refund when a domestic flight is more than three hours off schedule or when an international flight is six hours behind.

Passengers will also be entitled to a refund if an airline increases the number of connections, downgrades them to a lower class of service, or offers connections at different airports or flights on other planes that are less accessible or accommodating to a person with a disability.

Airlines also must offer a checked bag fee refund if their bag does not arrive within 12 hours of a domestic flight or 15-30 hours of an international flight, depending on the length of the flight.

If a customer pays extra for Wi-Fi or in-seat entertainment and that option does not work, they are entitled to a refund.

The Department of Transportation says these refunds must be offered in full and be prompt and automatic to the customer's original form of payment.

“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”

The new rules will take 6-12 months to implement, the Department of Transportation said.

The department also issued new rules on Wednesday requiring airlines to disclose "critical fees" up front. These fees must be shown in detail and not be disclosed through a hyperlink, the Department of Transportation said.

Numerous U.S. airlines declined to directly comment on the changes, deferring to a statement released by Airlines for America. The group representing major airlines said that its members exceed Department of Transportation regulations regarding consumer protections.

"A4A passenger airlines — which are fierce competitors — offer transparency and vast choice to consumers from first search to touchdown. U.S. airlines are committed to providing the highest quality of service, which includes clarity regarding prices, fees and ticket terms," the statement said. "A4A members offer a range of options — including fully refundable fares — to increase accessibility to air travel and to help customers make ticket selections that best fit their needs. Consumers are given the choice of refundable ticket options with terms and conditions that best fit their needs at first search results."