The Government Just Passed A Rule Requiring Airlines To Provide Cash Refunds For Delayed Flights. Here’s What To Know

25.04.2024 - 19:05 / forbes.com / Pete Buttigieg / Airlines

A new set of rules announced on Wednesday by the Department of Transportation are focused on righting some wrongs in the airline industry and providing extra consumer protection.

Previously, federal policies allowed airlines to compensate customers for delayed or cancelled flights with vouchers or credits. They also allowed carriers to set their own rules regarding when passengers should be compensated - i.e., it was the airlines that decided when a flight had been delayed too long, and whether/when/how much to compensate passengers for the inconvenience.

But now, the new federal rules will government when and how passengers are compensated for delays and cancellations. Here’s what you need to know:

Previously, airlines could make their own internal rules about when passengers should receive compensation for a flight delay. But the new Department of Transportation rules actually sets an industry-wide standard: Delays requiring compensation are defined as delays of more than three hours for domestic flights and more than six hours for international flights. Flights that are diverted to a different airport are also eligible for a refund.

If your flight delay matches the rules set out above, airlines are required to provide you with a cash refund instead of a travel voucher or travel credit. While frequent fliers may have never had an issue with receiving a credit or voucher, folks who fly sparingly often found the system unfair, and the travel credits less useful. The new rules guarantee that everyone is paid back in cash and within a timely manner: Seven days for a credit card refund and 20 days for other forms of payment.

In his remarks Wednesday, Transportation Secretary Pete Buttigieg gave an example a traveler who, after experiencing a delayed flight, is forced to buy an additional ticket on another airline in order to make it to their destination in time for an event.

In these cases, airlines often refused refunds if they didn’t cancel the flight. But now, the new rules will require airlines to be on the hook for those types of reimbursements.

“That’s just one example of the kinds of scenarios that we hear from passengers time and time again. We’re putting a stop to it now,” said Buttigieg.

If your bag is delayed and arrives more than 12 hours after you land, airlines are required to refund the passenger any baggage fees that were paid, according to the new rules. They also say that airlines must provide refunds for any services that don’t come to fruition, like malfuctioning Wi-Fi.

You can read the complete rundown of the rules on the Department of Transportation’s website.