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On Wednesday, the Biden administration released final regulations that will require airlines to automatically issue cash refunds for events such as delayed flights and enhance transparency about fees for baggage and cancellations.
Details of the New Regulations
The Department of Transportation now mandates that airlines must provide automatic cash refunds shortly after cancellations or significant delays. The new rules eliminate the ambiguity by specifying that a delay must last at least three hours for domestic flights and six hours for international flights to qualify as significant.
Although airlines can offer an alternative flight or travel credit, passengers are now empowered to decline and opt for a cash refund instead.
Refunds Extended to Other Services
The regulations also cover fees for checked bags and other services. If a checked bag is not delivered within 12 hours for domestic flights or 15 to 30 hours for international flights, airlines must refund any associated fees. This also applies to fees for seat selection or internet access if the airline fails to deliver these services.
Impact of COVID-19 on Airline Refunds
Refund complaints surged during the COVID-19 pandemic as many flights were canceled or significantly delayed. Airlines for America, a prominent industry group, noted that complaints have decreased significantly since mid-2020.
The group stated that the 11 largest U.S. airlines have issued $43 billion in customer refunds from 2020 through 2023, emphasizing their commitment to offering flexible travel options and fully refundable fares.
Additional Rule on Fee Transparency
An additional regulation requires airlines and ticket agents to disclose all fees for checked and carry-on baggage and fees for changing or canceling a reservation at the start of the booking process on their websites.
This rule also ensures passengers are informed that they have a guaranteed seat without additional charges, although specific seat selection can still incur extra fees.
Consumer Savings and Enforcement
Projected to save consumers over $500 million annually, these rules form part of the broader initiative by the Biden administration to eliminate what President Joe Biden refers to as "junk fees." Furthermore, Transportation Secretary Pete Buttigieg announced cooperation with state officials to enforce these consumer protections.
Implementation Timeline
The new regulations will be phased in over the next two years, representing a significant advancement in consumer rights and transparency in the airline industry.
