The Biden administration issued final rules requiring airlines to automatically issue cash refunds for delayed flights and disclose fees better. Airlines must provide automatic cash refunds for canceled flights and significant delays lasting at least three hours for domestic flights and six hours for international ones. Airlines can offer another flight or travel credit, but consumers can reject the offer. The rule also applies to refunds of checked-bag fees if the bag isn’t delivered within 12 hours for domestic flights or 15 to 30 hours for international flights. Complaints about refunds during the COVID-19 pandemic led to these new rules, with airlines offering a range of options like fully refundable fares.
The Transportation Department also issued a rule mandating airlines and ticket agents to disclose upfront the charges for checked and carry-on bags, as well as canceling or changing reservations. The fees must be shown on airline websites the first time customers see a price and schedule. Airlines will have to inform passengers about guaranteed seats they don’t have to pay extra for, though airlines can still charge for specific seats like exit-row or front cabin seats. The rule is estimated to save consumers over $500 million per year. Airlines for America, a trade group for large U.S. carriers, mentioned that refund complaints have decreased since mid-2020, with airlines issuing $43 billion in customer refunds from 2020 to 2023.
The Biden administration’s efforts to combat “junk fees” also include a rule to let state officials in 15 states help enforce federal airline consumer protection laws. The new rules will take effect over the next two years and are part of a broader attack on fees that President Joe Biden has criticized. Despite the ability for airlines to offer a range of options including fully refundable fares, some consumers have faced challenges in receiving refunds due to canceled flights or safety concerns during the pandemic. The new rules aim to provide more transparency and protection for consumers when it comes to fees and refunds, ensuring they are informed from the start about potential charges.
