The Department of Transportation Wednesday announced a massive win for air travelers as airlines will now be required to issue full cash refunds for canceled and significantly delayed flights.
"This is a big day for America's flying public," said Transportation Secretary Pete Buttigieg at a Wednesday morning news conference. He said the new rules will dramatically speed up the refund process and is the largest commitment to passenger rights in the history of DOT.
Airlines have the power to decide how long a delay must be before a passenger is eligible for a refund, but they must adhere to DOT'S new rules, which defines a "significant" delay as more than three hours for domestic flights and more than six for international flights. If these standards are met, passengers are entitles to an automatic refund.
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The rules seem to cover all bases as they include tickets purchased directly from the airline, travel agents and third-party sites like Expedia and Travelocity. The new DOT rules dictate "entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered."
Travelers are also covered for their belongings, which are required to be refunded in cash if they are lost or not recovered within 12 hours. Airlines will have seven days to refund customers if the aforementioned scenario were to take place.
The compensation must be made in cash unless the affected customers opts for an alternative, meaning gone are the days of airlines refunding passengers in vouchers or credits. The new guidelines are expected to go into full effect in six months.
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"Passengers deserve to get their money back when an airline owes them -- without headaches or haggling," Buttigieg said in a statement. Buttigieg plans to rework more aspects of the air transport industry to create a better experience for passengers while saving them some money.
These include new rules relating to family seating fees, more rights for passengers who board the planes in their wheelchairs—saying he aims to create a more "dignified" travel experience—and more amenities if flights are suddenly canceled or heavily delayed. The transport secretary also want to do away with hidden fees that typically catch passengers by surprise, estimating that it will save Americans billions of dollars each year.
Travelers will receive refunds for extra services they were charged for but never utilized, including WI-FI access, seat selection or inflight entertainment. This comes after the agency fined Southwest Airlines a record $140 million for it's abysmal handling of the 2022 holiday travel season, which they described as an operational meltdown.