If an airline on which you have a ticket cancels or delays your flight significantly, you have an absolute right to a prompt full refund. The refund must include any ancillary fees you purchased such as a checked bag or seat assignment. That’s the gist of a final rule published last week by the Department of Transportation, and it establishes that right firmly and with no exceptions.
The rule applies to both foreign and domestic airlines for flights within, to or from the United States. The final rule doesn’t establish any major new consumer protection, but it does define and codify previously established rights.
Prior legislation requires prompt action, and the final rule defines prompt as “refunds made within seven business days after the earliest date the refund was requested for credit-card purchases and within 20 calendar days after the earliest date the refund was requested for cash, check, debit card or other forms of purchase.”
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According to the Department of Transportation rule, a refund is required when a delay is significant or a cancellation results in a significant delay in a consumer’s reaching his or her final destination. “Significant” is now defined as three hours for a domestic flight and six hours for an international flight.
The party responsible for making the refund is the party through which a consumer purchases a ticket. That can mean an airline, for a direct purchase, or a travel agency, online or brick-and-mortar.
The refund rule applies to any and all tickets, even the most nonrefundable. It also applies to all delays and cancellations — even those caused by external force majeure events such as weather, volcanoes, fires and such. It updates a rule that societies have lived by since there were trading societies: “You pay for something but the supplier doesn’t deliver, you get your money back.” It’s that simple.
Prior to the issuance of this and related rules, airline obligations during a delay or cancellation were largely defined by each line’s contract of carriage. And those contract provisions varied greatly among the different lines; some were quite specific, and others didn’t even mention the situation.
The most egregious violations were by airlines that virtually insisted a delayed passenger accept its off er of alternative transport — usually the next available seat on that line’s flight and occasionally a seat on another line’s flight. If a passenger wasn’t satisfied by the off er, the airline would try to get the passenger to accept a credit voucher toward a future flight — a voucher that might expire as soon as one year and is worth a lot less than cash.
Both Congress and the Department of Transportation have said that isn’t good enough. If you don’t like your airline’s off er, you get a full refund. Period.
The main pushback on the new rule has come from online travel agencies. They’re worried that while they are required to refund a passenger promptly, airlines may not reimburse them for the refund in a timely manner. Presumably, if this situation emerges, the Department of Transportation will provide an appropriate remedy.
The refund rule applies only to flights that an airline cancels or delays. If you, as a passenger, see trouble brewing and cancel proactively in order to get a head start on Plan B, you get only what the ticket rules and the airline’s contract of carriage provide. Airlines will likely try to game the current rule by putting off a cancellation or delay until the last minute, hoping you’ll blink first. We’ll see if this happens.
The Department of Transportation still faces a long list of consumer issues, some pressing, some not so much. I suspect we won’t see much more during the remainder of this administration, and nobody knows what either a Harris or second Trump administration might do. All I know is that the consumer advocates will be dogging whoever is put in charge.
Email Ed Perkins at eperkins@mind.net. Also, check out Ed’s new rail travel website at www.rail-guru.com.
