All about US DOT’s Final Rule for Airlines: Biden Empowers Travelers to Get Cash Refunds Quickly and Automatically

In a major development for air travelers under the Biden-Harris administration, the US Department of Transportation (DOT) has issued a mandate for airlines to credit automatic cash refunds to passengers in the event of flight cancelations, significant flight schedule/itinerary changes, and other specific circumstances (defined in the mandate). Termed as ‘final rule by DOT’, the mandate requires airlines to honor passengers’ right to a quick refund in the below scenarios, as evident from what US Transportation Secretary said, “Passengers deserve to get their money back when an airline owes them – without headaches or haggling.”

Canceled or significantly changed flights: Passengers are entitled to a refund if their flight is canceled or significantly changed, and if they do not accept alternative travel arrangement or travel credits/vouchers offered. As defined by the DOT rule for airlines, “significant changes” to a flight include departure or arrival delays beyond 3 hours domestically and 6 hours internationally.

DOT considers departures or arrivals from a different airport than the actual one booked by the passengers as significant changes to a flight. An increase in the number of connections (for instance, changing an itinerary from a one-stop flight to a two-stop flight) is also defined as a significant change to flights. If airlines modify an itinerary to provide connection(s) at different airports than the ones specified in the itinerary at the time of booking, passengers can refuse this significant change and request a cash refund.

A downgrade to the passenger’s ticketed class of travel, to say from business class to premium economy or standard economy, comes under “significant changes” to a flight, according to DOT. A change of planes, which makes a flight(s) “less accessible or accommodating to a person with a disability” is also a significant change, and therefore, a must consideration for a refund against cancelation.

Significantly delayed baggage return: The DOT rule for automatic cash refunds enables passengers to claim a refund of their checked bag fee if they don’t get the checked baggage within 12 hours of their domestic flight arriving at the gate, and 15-30 hours of their international arrival, depending on the length of the flight.

Extra services not provided: The Department of Transportation requires airlines to refund the fee that a passenger pays for Wi-Fi, seat selection, or any other extra service – if they fail to provide the paid service.

DOT underlines a standard refund policy for airlines   

A standard refund policy for airlines operating to, from and through the United States is the other principal objective of the DOT final rule. DOT standardizes the refund process for airlines – which was otherwise cumbersome and full of hiccups such as making a formal refund request, filling out extra digital paperwork, waiting for hours on the phone. Below are the refund norms that airlines are directed to comply with:

Automatic: Airlines must automatically credit refund amounts without passengers having to explicitly request a refund in case of flight cancelation.

Prompt: Airlines must issue refunds within seven business days of refunds becoming due to credit card purchases and 20 calendar days for other payment methods.

Cash or original form of payment: Refund amounts must be credited to passengers in cash or whatever original payment method they used to book flight tickets, like credit card or airline miles. Airlines may not enforce vouchers, travel credits, or other forms of compensation unless the passenger gives his/her explicit consent to accept alternative compensation.

Full amount: Airlines must provide full refunds of the ticket purchase price, minus the value of any portion of transportation already used (partially used tickets). “The refunds must include all government-imposed taxes and fees and airline-imposed fees, regardless of whether the taxes or fees are refundable to airlines,” said DOT.

DOT’s final rule directs airlines to quickly communicate to passengers about their right to a refund of the ticket and extra service fees, as well as any related policies in the event of flight cancelation.