Transportation facilities publication of final regulations requires airlines to automatically refund passengers cash and notify passengers of their right to a refund by Wednesday. The policy change highlights the Biden Administration’s continued support for a hard line on consumer rights in the skies. USDOT forces airlines to paid more than $600 million in refunds in 2022. The agency also levied taxes record fine of 140 million USD against Southwest over the 2022 holiday season crisis.
Final rule require any airline to provide automatic refunds for canceled or significantly changed flights within seven days for credit card payments and within 20 days for other forms of payment other. This regulation also applies to checked baggage fees and ancillary service fees such as In-flight WiFi.
It is important to note that a refund will only be requested if the passenger refuses or is not offered a refund. replacement shipping or compensation, as credit for another flight. Airlines must inform customers of their right to a refund, but those who want a refund will have to be savvy enough to decline the alternatives.
For clarity, USDOT definition a significant change such as:
– domestic flight delayed by three hours (or departed early)
– international flight delayed by six hours (or departed early)
– change the departure or arrival airport during the itinerary
– Add connection points on the journey
– downgrade to a lower service type
– Changing airport connections for disabled passengers
– aircraft replacement makes accessibility features unavailable to passengers with disabilities
Transportation Security Pete Buttigieg said in a press release, “Passengers deserve to get their money back when the airline owes them – without the headache or haggling. Our new regulations set a new standard for requiring airlines to promptly refund cash to their passengers.”
It’s no secret that refunds eat into airlines’ profits significantly. Delta Airlines refunded 6 billion USD between January 2020 and August 2022. Measures forcing carriers to pay cash compensation also create incentives for better service with fewer delays and cancellations.
