Biden Administration Hits Airline Industry With New Regulations

The Biden administration has introduced a suite of new regulatory rules targeting the airline industry.

Airlines will now have to promptly provide passengers with automatic cash refunds under certain circumstances, including when there are flight cancellations, significant flight changes or delays, or failure to provide services purchased.

Refund policies vary between airline carriers, which the Department of Transportation says makes it difficult for passengers to assert refund rights. The new rule from the Transportation Department seeks to create certainty for consumers by outlining circumstances when airlines must provide refunds.

According to a statement on the refund rule:

• Canceled or significantly changed flights — Passengers will be entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered. “Significant change” is defined as departure or arrival times that deviate by more than three hours domestically, or six hours for international flights; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability.


• Significantly delayed baggage return — Passengers who file a mishandled baggage report will be entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight.


• Extra services not provided — Passengers will be entitled to a refund for the fee they paid for an extra service — such as Wi-Fi, seat selection, or inflight entertainment — if an airline fails to provide this service.

“Passengers deserve to get their money back when an airline owes them - without headaches or haggling,” U.S. Transportation Secretary Pete Buttigieg said in the statement. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.” 

Under the rule, airlines must automatically issue refunds within seven days for credit card purchases and 20 calendar days for other payment methods. Airlines are also required to refund the full ticket price (including taxes or fees, regardless of if they’re refundable for airlines) minus the value of any part of the transportation already used.

Airlines will not be permitted to issue travel vouchers, credits, or other compensation unless a customer declines a full refund.

The Biden administration also unveiled a rule aimed at protecting travelers from surprise junk fees when purchasing tickets. This rule requires airlines and ticket agents to disclose upfront what fees are charged for checked bags, carry-on bags, and for cancelling or changing reservations.

“Airlines should compete with one another to secure passengers’ business—not to see who can charge the most in surprise fees,” Buttigieg said in an April 24 statement. “DOT’s new rule will save passengers over half a billion dollars a year in unnecessary or unexpected fees by holding airlines accountable for being transparent with their customers.”

Transportation officials say airline revenue from baggage fees rose by more than 30 percent between 2018 and 2022.

Officials also say that prior to the rule, some airlines offered “deceptive discounts” that customers may have believed to be the full fare. These actions amounted to “bait-and-switch tactics” by advertising promotional rates that consumers did not include with other fees, the government said.

Next

Travel

TSA Launches 'Self-Screening' Security Program For Airline Passengers

03.8.24 | Adrian Norman

---