The Biden administration announced final rules Wednesday that require airlines to automatically issue cash refunds for things like flight delays and improve disclosure of baggage fees and reservation cancellation fees.
The Department for Transport said airlines will be required to issue automatic cash refunds within days for canceled flights or “substantial” delays.
At the height of the pandemic in 2020, complaints about airlines and ticket agents refusing or delaying refunds accounted for 87% of all complaints about air travel services, the ministry said.
“If passengers owe money to an airline, they have the right to get their money back without any hassle or haggling,” Transportation Secretary Pete Buttigieg said in a statement.
Under current regulations, airlines determine how long a delay will last before issuing a refund. The government is seeking to eliminate this scope for change by defining significant delays as lasting at least three hours for domestic flights and six hours for international flights.
Airlines will still be allowed to offer alternative flights or travel credits, but consumers can decline the offer.
This rule also applies to refunds for checked baggage fees if the baggage is not delivered within 12 hours for domestic flights and 15 to 30 hours for international flights. It also applies to charges such as seat reservations and internet access if the airline is unable to provide the service.
Complaints about refunds spiked during the pandemic as airlines canceled flights and even if they didn't, many people didn't feel safe sharing plane cabins with other passengers.
Airlines for America, a trade group for major U.S. airlines, said refund complaints to the Department of Transportation have fallen sharply since mid-2020. A spokesperson for the group said the airline “is increasing access to air travel and offering a wide range of options, including fully refundable fares, to help customers choose the ticket that best suits their needs.” Stated.
The group said 11 major U.S. airlines issued $43 billion in refunds to customers from 2020 to 2023.
Seaport Research analyst Daniel McKenzie said the refund changes would add significant costs to airlines and could disproportionately impact low-cost airlines. “As long as low-cost carriers have to add costs to comply with regulations, constrain growth and reduce scale, their competitiveness will decline,” McKenzie said in the memo.
The Department of Transportation issued another rule requiring airlines and ticket agents to disclose in advance fees for checked and carry-on bags, as well as fees for canceling or changing reservations. Airline websites must display prices when customers first view prices and schedules.
The rule also requires airlines to tell passengers they are guaranteed seats for which they do not have to pay extra, but does not prevent airlines from charging people to choose a specific seat. . Many airlines now charge extra fees for certain locations, such as seats in exit rows or near the front of the cabin.
The agency said the rule would save consumers more than $500 million annually.
Airlines for America said its members “provide transparency and broad choice for consumers” from their first search.
The new rules will take effect over the next two years. They are part of a broader administration attack on what President Joe Biden calls “junk fees.” Transportation Secretary Pete Buttigieg announced last week that his department would engage state agencies in 15 states to help enforce federal aviation consumer protection laws.
Information for this article was contributed by Allyson Versprille of Bloomberg News (TNS).