Good News: U.S. Airline Passengers Finally Have Enhanced Consumer Protections

A win for consumers.

The United States Department of Transportation has issued a final ruling that will provide additional consumer protections for airline passengers, the agency said Wednesday. 

The rule will require airlines to provide prompt refunds to travelers whose flights are cancelled or the schedule significantly changed, issue transferable travel credits to passengers unable to travel because of a communicable disease, refund baggage fees for significantly delayed bags, and provide clarification around many existing consumer protections. 

For flight cancellations, airlines must now issue refunds within seven business days to passengers who purchased tickets with a credit card. Airlines must also inform passengers with cancelled flights that they are entitled to a cash refund before offering alternatives, such as a travel credit. The DOT is also defining, for the first time, exactly what qualifies as a cancellation or a significant delay. 

A cancellation is a flight that is open for sale for reservations but ultimately not operated by the airline. A significant change is a retiming of the flight to depart up to three hours earlier for domestic flights, or up to six hours earlier for international flights, or arriving later by the same period for domestic or international flights. Passengers whose flights are changed to depart or arrive from a different airport, make more connections than originally booked, or receive a downgrade to a lower class of service will also be eligible for refunds. 

The rule will also require airlines to refund ancillary fees (such as those for checked bags, seat assignments, priority boarding) for services that are not provided. Airlines must refund baggage fees in the event of a significantly delayed bag, which the DOT defines as failure to deliver a bag to a passenger within 12 hours of the arrival of a domestic flight, or between 15 and 30 hours for an international flight of the flight’s arrival depending on the length of the international flight. 

Another requirement is for airlines to fully disclose the full price of a ticket, including all taxes, fees, and charges at the time of sale, including any additional fees that may apply to the passenger’s travel. 

Customers who are unable to travel because they have been advised by a doctor, that they have a serious communicable disease will be eligible for a transferrable credit, valid for up to five years.

Finally, the rule prohibits airlines from withholding processing fees from refund amounts for passengers whose flights are cancelled or significantly changed. 

While the rule was being considered, the Department of Transportation received over 5,300 comments consumer rights advocacy groups, airlines and airline trade associations, ticket agents and ticket agent trade associations, academic researchers, state attorneys general, and individual consumers—4,600 of them from individual consumers, which the DOT noted that “almost all” individual consumer commenters supported the enhanced protections. 

Previous DOT rules required carriers to publish a customer service plan, promising refunds within a specific timeframe, but still allowed carriers to select the timeframe. Airlines were also previously allowed their own definitions of “cancellation” and “significant change,” which the DOT noted carriers adjusted retroactively in the early days of the COVID-19 pandemic to avoid giving some refunds. The enhanced rules standardize both the definitions of cancellations and changes, set the seven-day window for refunds, and introduced the requirement to notify passengers of their refund entitlement. 

Several commenters, including a joint letter from 32 state attorneys general, proposed further regulation, including requiring airlines to sell tickets only for flights they have the staff to operate, impose penalties for delays, and require airlines to compensate customers for expenses caused by cancelled flights, similar to the EU 261 consumer protection regulations on flights departing from the European Union and for all carriers certificated in the EU. The Department responded that it’s looking at addressing those issues in future proposed regulations.