Biden administration unveils stricter rules for airline refunds, upfront pricing

24.04.2024 - 21:41 / thepointsguy.com / Pete Buttigieg / Airlines

Airlines will soon face far stricter rules for issuing refunds, the Biden administration said Wednesday.

Among the changes, the White House defined what kinds of long delays or cancellations entitle passengers to refunds.

Eligible travelers must receive refunds automatically to their original form of payment within seven to 20 days, depending on how they paid, the U.S. Department of Transportation announced as part of a series of new regulations.

Meanwhile, the DOT will require airlines to more clearly disclose fees for ancillary charges like baggage and itinerary changes upfront.

They'll also face stricter rules for refunding late bags and faulty Wi-Fi.

It's the latest set of new rules the Biden administration has imposed on airlines in the name of consumer protection. These rules, the DOT said Wednesday, are expected to save travelers an estimated half-billion dollars annually.

"Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them — without having to ask," U.S. Transportation Secretary Pete Buttigieg said in a statement announcing the changes.

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Both of the new regulations will take effect by late October, the DOT tells TPG. However, it may be closer to a year before travelers will notice some provisions.

Here's what to know about the new policies unveiled by the DOT.

The DOT will require airlines to issue automatic refunds to passengers when flights are canceled or when itineraries are significantly delayed or changed. Keep in mind that this will only apply if the passenger ultimately chooses not to travel and doesn't accept rebooking or other forms of compensation.

The DOT already mandates that passengers are owed a refund for any unused portion of their itinerary in these situations. This is true regardless of the reason for the disruption. (It doesn't matter if the cancellation is due to maintenance, weather or some other reason.)

However, many travelers have found they often have to ask for a refund. This typically involves filing a request by email, online or over the phone. The DOT wants that to end.

"Without this rule, consumers have to navigate a patchwork of cumbersome processes to request and receive a refund," the DOT said in a statement.

Related: Here are airline passenger rights to know during a travel meltdown

Going forward, airlines will be required to automatically issue refunds — when owed — within seven days for passengers who booked their flight with a credit card and within 20 days for those who used alternative payment methods.

The airline won't be allowed to substitute vouchers, travel credits or other forms of compensation like