Transportation Secretary Pete Buttigieg announced the new rules Wednesday.
Good news for air travelers: The Department of Transportation announced Wednesday new rules that would require airlines to automatically refund passengers for canceled and significantly delayed flights.
The company said the delays could be more than three hours for domestic flights and more than six hours for international flights. This includes tickets purchased directly from airlines, travel agents, and third-party sites such as Expedia and Travelocity.
“This is a big day for America's flying public,” Transportation Secretary Pete Buttigieg said at a news conference Wednesday morning. Buttigieg said the new rules — requiring immediate refunds — are the largest expansion of passenger rights in the department's history.
Airlines can now decide how long a delay must be before a refund is issued — however, these new rules define “significant” delay standards that trigger a refund.
DOT rules state that “passengers are entitled to a refund if their flight is canceled or substantially changed, and they will not accept alternate transportation or travel credits.”
DOT will require airlines to issue refunds if your bags are not delivered within 12 hours of being lost.
According to the new DOT rules, refunds must be issued within seven days and must be in cash unless the passenger chooses another form of compensation.
Airlines can no longer issue refunds in the form of vouchers or credits if customers are entitled to a refund.
Airlines will be given six months to comply with the new rules.
“Passengers deserve to get their money back when an airline owes them without the hassle or bargaining,” Buttigieg said in a statement.
The DOT said it is also working on rules related to family seat fares, improving wheelchair passengers' rights to safe and dignified travel, and mandating compensation and accommodations when flights are delayed or canceled by airlines.
Buttigieg said the DOD is working to protect air travelers from being surprised by hidden fees — a move he estimates costs Americans billions of dollars each year.
DOT regulations Passengers will receive refunds for extras paid for and not provided, such as Wi-Fi, seat selection or in-flight entertainment.
The rules come after the agency fined Southwest Airlines $140 million for winding down its operations through the 2022 holiday travel season.
Buttigieg said Southwest's fine sets a “new standard” for airlines and passenger rights.
“To be clear, we want the airline industry to thrive. That's why we're spending so much on helping them survive the pandemic, and frankly that's why we're so strict on passenger safety,” he said.
Buttigieg reiterated that refund requirements are already standard for airlines, but the new DOT rules hold airlines to account and ensure passengers “get the money they're owed.”
“We're not interested in airlines holding them to a higher standard,” Buttigieg said, “and he knows they can adapt.”
Airlines for America, the nation's leading trade association for passenger and cargo airlines, told ABC News that its members “offer a range of options, including fully refundable fares.” Consumers are said to be “presented with a choice of refundable ticket options with terms and conditions best suited to their needs in the first search results”.
The group reported that the 11 largest U.S. airlines returned $43 billion in refunds to customers from 2020 to 2023.
