New rule means US airlines must give automatic refunds for delays, cancellations

A new rule in the US will have huge implications for passengers travelling both domestical and international routes.

Travellers in the United States no longer need to fear getting stuck in a financial holding pattern should their flight get scrapped.

US airlines are now required to issue passengers automatic refunds for tickets and other flight-related expenses should their flight get cancelled or significantly delayed, NY Post reports.

“Today, our automatic refund rule goes into full effect,” US Transportation Secretary Pete Buttigieg declared in a post on X. “Airlines are required to provide prompt cash refunds without passengers having to ask.”

In doing so, they are making good on an instant refund policy that the US Department of Transportation (DOT) proposed in April to expedite the reimbursement process, increase transparency, and protect against “hidden junk fees.”

While portions of DOT’s new policy were instated as early as May, some provisions took longer to go into effect due to their lead times, per USA Today.

US airlines are now required to issue passengers automatic refunds for tickets and other flight-related expenses should their flight get cancelled or significantly delayed. Picture: Roberto Schmidt/Getty Images/AFP

Under the new rules, passengers are entitled to automatic refunds sans having to explicitly request them, and these reimbursements must be processed within seven days for credit card purchases, and 20 days for other payment methods.

Previously, airlines were required to give refunds, provided the passenger didn’t book alternative flights with them, but the exact window for reimbursement was ambiguous.

In addition, these refunds must be paid in full — minus the value of flights already taken — to the original form of payment “used to make the purchase, such as credit card or airline miles,” per the policy.

“Airlines may not substitute vouchers, travel credits, or other forms of compensation unless the passenger affirmatively chooses to accept alternative compensation,” it reads.

A significant flight delay, per the policy, constitutes three hours for a domestic flight and six hours for an international itinerary — time limits that apply both to departure and arrival delays.

A significant flight delay, per the policy, constitutes three hours for a domestic flight and six hours for international. Picture: David Swanson / AFP

The flights aren’t the only portions of the trip that are subject to refunds. Under the new regulation, passengers who file mishandled baggage reports are eligible to get back their checked bag fees if the bag is lost and not delivered within 12 hours of a domestic flight’s gate arrival.

International flights, meanwhile, will have 15 to 30 hours to return lost luggage, depending on their duration, per the policy.

Said baggage fee is to be disclosed along with the fare and schedule information on the airline’s online platform and not via a hyperlink after they’ve booked.

This way, passengers can “avoid surprise fees when they purchase tickets from airlines or ticket agents, including both brick-and-mortar travel agencies or online travel agencies,” the policy states.

Lastly, passengers are entitled to refunds for ancillary services that weren’t provided due to a cancellation or other circumstances.

These include Wi-Fi, seat selection, and in-flight entertainment.

This article originally appeared on New York Post and was reproduced with permission