The Biden administration has finalized new regulations for U.S. carriers in cases of delayed or cancelled flights.
The rules require U.S. airlines to automatically issue cash refunds for delayed flights and improve transparency regarding baggage and reservation cancellation fees. Transportation Secretary Pete Buttigieg announced the changes on Wednesday (24APR).
"Passengers deserve to get their money back when an airline owes them, without headaches or haggling," Buttigieg said in a statement.
"This includes tickets purchased directly from airlines, travel agents and third-party sites such as Expedia and Travelocity," ABC News reports.
The definition of significant delay will be standardized, with a minimum of three hours for domestic flights and six hours for international flights.
Under the new regulation, airlines can still offer alternative flights or travel credits, but pax now have the option to decline and opt for a cash refund instead.
"The refunds must be issued within seven days, according to the new DOT rules, and must be in cash unless the passenger chooses another form of compensation. Airlines can no longer issue refunds in forms of vouchers or credits when consumers are entitled to receive cash," ABC News said.
Buttigieg acknowledged airline reluctance to the higher standard but expressed confidence in their ability to adapt. "To be clear, we want the airline sector to thrive. It is why we put so much into helping them survive the pandemic and honestly it's why we're being so rigorous on passenger protection," he said.
Additionally, the rule extends to refunds for checked-bag fees if bags are not delivered within specified timeframes (12 hours for domestic flights or 15 to 30 hours for international flights), and it will apply to fees for seat selection or internet connection if the airline fails to provide the service.
"The Transportation Department issued a separate rule requiring airlines and ticket agents to disclose upfront what they charge for checked and carry-on bags and canceling or changing a reservation. On airline websites, the fees must be shown the first time customers see a price and schedule," The Globe and Mail reports.
Airlines are required to inform passengers of their guaranteed seat without extra charges, but airlines can still charge for specific seats.
According to ABC News, Airlines will have "six months to comply" with the new rules, which are projected to save consumers more than $500 million annually.
According to AVweb, "The six-month delay will allow the airlines to adjust their accounting systems to implement the changes. There are also predictions the move will drive up ticket prices.”
And there’s the rub. The money has to come from somewhere.
How will this affect Canadian pax?
Daily Hive reports, "The Canadian Transportation Agency (CTA) determines that Canadian travellers have had a fundamental right to a refund for delayed and cancelled flights since 2004.
However, Gabor Lukács, self-appointed spokesperson for passenger rights, says, "The difference between Canada and the US is that the DOT effectively enforces its rule for refunds, even during the COVID-19 pandemic, whereas the Canadian government hasn't.
As Open Jaw has reported, both European and Canadian carriers have been lobbying Ottawa to reduce Passenger Payment Protection penalties, arguing delays and cancellations are often out of their control. The future of passenger compensation in Canada is now in the hands of the Supreme Court.
