OAN’s James Meyers
10:29 AM – Wednesday, April 24, 2024
A federal rule approved by the Biden administration on Wednesday will now require airlines to give cash refunds quickly and without arguments to passengers whose flights have been canceled or delayed drastically.
“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement.
The new rule also states that passengers who decline other reimbursement such as travel credits are entitled to get a cash refund.
Additionally, the Biden administration said that the rule applies to canceled flights or when a flight suffers a “significant change.” They defined “significant change” as when departure or arrival times are three or more hours different than scheduled domestic flights or six hours for international flights, and cases where the airport is changed or connecting flights were added.
Furthermore, if a customer’s baggage is 12 hours late in delivery for domestic flights they will receive a refund.
The refunds will also include tickets purchased directly from airlines, travel agents and third-party sites such as Travelocity and Expedia.
Airlines issuing refunds must also complete it within seven days, and must be in cash unless the passenger chooses another form of compensation. Airlines will not be allowed to issue refunds in forms of vouchers or credits when passengers are entitled to receive cash, according to the Department of Transportation.
The new rule will give airlines six months to comply with the new standards.
The new standards come after the 2022 Southwest Airlines disaster, which resulted in 17,000 significantly delayed or canceled flights and a high amount of missing passenger luggage. Southwest was fined a record $140 million as a result.
“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,” Buttigieg said.
Airlines will also be required to disclose “junk fees” such as surprise baggage or other fees, up-front, according to the Department of Transportation.
The Department said the new rule is expected to save passengers close to $500 million a year.
Airlines for America, the trade association for America’s leading passenger and cargo airlines, said the 11 largest U.S. airlines issued $43 billion in customer refunds from 2020 through 2023.
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