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US passengers to get automatic cash refunds for disrupted flights


The Biden administration announced final regulations on Wednesday mandating that airlines must issue automatic cash refunds for flight delays and provide clearer disclosures regarding baggage fees and reservation cancellations.

Under the new rules, airlines will be obligated to automatically refund passengers in cash within a few days for canceled flights and significant delays. The definition of a significant delay is now set at three hours for domestic flights and six hours for international flights, eliminating airlines’ discretion in determining refund eligibility. While airlines can still offer alternative flights or travel credits, passengers have the right to decline such offers.

Additionally, the regulations stipulate that passengers are entitled to refunds for checked-bag fees if their luggage isn’t delivered within 12 hours for domestic flights or 15 to 30 hours for international flights. Fees for services such as seat selection or internet access must also be refunded if the airline fails to provide the promised service.

Refund-related complaints surged during the COVID-19 pandemic due to widespread flight cancellations and safety concerns among travellers. However, Airlines for America, a trade group representing major U.S. carriers, reported a significant decline in refund complaints since mid-2020. The group emphasised that airlines offer various options, including fully refundable fares, to accommodate passengers’ needs.

In addition to refund requirements, the Transportation Department introduced a rule mandating that airlines and ticket agents disclose baggage fees and reservation change or cancellation fees upfront. These fees must be prominently displayed on airline websites when customers view flight prices and schedules for the first time.

Furthermore, airlines are now obligated to inform passengers that they have a guaranteed seat without extra charges, although airlines can still charge for seat selection, including premium seats like exit-row or front-of-cabin seats. The Transportation Department estimates that these regulations will save consumers over USD 500 million annually. Airlines for America asserts that its members prioritize transparency and offer extensive choices to consumers during the booking process.

These new regulations will be phased in over the next two years as part of the Biden administration’s broader efforts to combat “junk fees.” Last week, Transportation Secretary Pete Buttigieg announced plans to empower state officials in 15 states to assist in enforcing federal airline consumer protection laws.

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