Department of Transportation Unveils Airline Refund Guidelines: What Travelers Need to Know

by Alice

Last week, the Department of Transportation (DOT) unveiled a comprehensive set of rules outlining when airlines are obligated to provide refunds to travelers and how they must process them. Although the new regulations aim to enhance consumer protection, they do come with certain stipulations.

According to the latest guidelines, all airlines operating within the United States are mandated to refund passengers for significant alterations to their flights, baggage delays, and other pertinent circumstances. However, understanding one’s entitlements concerning refunds is crucial before pursuing reimbursement.


When Are Airlines Required to Issue Refunds?

Travelers are eligible for automatic refunds under several circumstances:


Flight cancellations or substantial schedule changes


Failure to deliver a purchased ancillary service, such as onboard Wi-Fi or seat selection

Refusal of alternative transportation or travel credits offered by the airline

Defining “Significant Change”

The DOT has outlined specific criteria to define a “significant change,” including:

Domestic flights experiencing departure or arrival time deviations exceeding three hours

International flights encountering departure or arrival time discrepancies surpassing six hours

Alterations to departure or arrival airports

Increased number of connections or a downgrade to a lower class of service

Changed connections or flights on less accessible planes for passengers with disabilities

Addressing Delayed Baggage Concerns

Passengers filing mishandled baggage reports are now entitled to a refund of the checked bag fee under the following conditions:

Domestic flight baggage not delivered within 12 hours of arrival at the gate

International flight baggage not delivered within 15 to 30 hours of arrival at the gate, depending on flight duration

Refund Disbursement Process

Airlines are mandated to automatically issue refunds without necessitating passenger requests. Refunds for credit card purchases must be processed within seven business days, while other payment methods require reimbursement within 20 calendar days.

Cash Refund Option

In a significant shift, airlines are prohibited from offering travel vouchers as a default resolution. Instead, refunds must be disbursed in cash or the original payment form, such as credit cards or miles. Travel vouchers or alternative compensations may be provided if willingly accepted by the passenger.

Timely Consumer Notification

Airlines must promptly inform affected consumers of their right to a refund in cases of flight cancellations or significant changes.

Effective Date of the New Rule

The revamped refund regulations are slated to take effect on October 28.

Additional Compensation Eligibility

Travelers unable to undertake U.S. travel due to medical reasons associated with a serious communicable disease are now entitled to travel credits or vouchers. These vouchers must remain transferable and valid for a minimum of five years from the date of issuance. Evidence of the impediment may be required for verification purposes.

The new rule regarding this compensation provision will be enforced starting April 28, 2025.



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