New regulations from the US Department of Transportation will require airlines to offer automatic refunds to passengers in case of flight cancellations or significant alterations. These rules aim to simplify refund processes and ensure consistency across the industry.
The guidelines specify situations where passengers are eligible for refunds for travel to, from, or within the US. This initiative addresses concerns raised during the peak of the Covid-19 pandemic in 2020, where 87% of air-travel service complaints were related to airlines and ticket agents denying or delaying refunds.
Transportation Secretary Pete Buttigieg emphasized the importance of hassle-free refunds, stating that passengers deserve timely reimbursement when airlines fail to fulfill their obligations.
Under the new regulations, passengers are entitled to refunds if their flights undergo “significant changes,” such as:
- Domestic departure or arrival times shifting by more than three hours, or by six hours for international flights.
- Downgrading from the originally purchased class, such as from first class to economy.
- Changes in departure or arrival airports.
- Increase in the number of connections.
- Changes to connecting airports or aircraft that are less accessible for people with disabilities.
Additionally, passengers will receive refunds for checked bag fees if their bags are lost and not returned within a specified time frame after domestic or international flights. Refunds will also be provided for services like in-flight Wi-Fi or entertainment if not received.
To expedite the refund process, the Department of Transportation mandates prompt automatic refunds in cash or through the original payment method. Most of these new requirements are expected to take effect in approximately six months.
However, industry analysts predict that these refund changes could increase costs for airlines, potentially affecting low-cost carriers disproportionately. Nonetheless, the Airlines for America trade group assures that its member carriers already adhere to, and often surpass, consumer protection regulations.
In addition to refund regulations, the Department of Transportation issued a final rule mandating airlines to transparently communicate extra fees upfront for services like checked luggage, carry-on bags, or reservation changes. This move aims to curb surprise fees and save travelers over half a billion dollars annually, according to Buttigieg.
Furthermore, Buttigieg announced forthcoming rules to enhance passenger rights for wheelchair users and to prevent airlines from charging parents for sitting with their children on flights.
The Department of Transportation vows to enforce regulations rigorously, citing a $140 million fine imposed on Southwest Airlines Co. for operational disruptions in December 2022 as an example of the new standard for enforcement.
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