Ed Perkins on Travel: Final Rule for Delays and Cancellations

Significant flight delays will give us a right to a full refund from the airline or travel agency we booked from.

Flight status board with canceled worldwide flights. Dreamstime/TNS

If an airline on which you have a ticket cancels or delays your flight significantly, you have an absolute right to a prompt full refund. The refund must include any ancillary fees you purchased such as a checked bag or seat assignment. That’s the gist of a final rule published last week by the Department of Transportation (DoT), and it establishes that right firmly and with no exceptions.

The rule applies to both foreign and domestic airlines, for flights within, to, or from the United States. The final rule doesn’t establish any major new consumer protection but it does define and codify previously established rights.

Prompt Defined

Prior legislation requires prompt action, and the final rule defines prompt as “refunds made within seven business days after the earliest date the refund was requested for credit card purchases, and within 20 calendar days after the earliest date the refund was requested for cash, check, debit card, or other forms of purchase,”

Significant Defined

According to DoT rule, a refund is required when a delay is significant or a cancellation results in a significant delay in a consumer’s reaching his or her final destination. Significant is now defined as three hours for a domestic flight and six hours for an international flight.

Responsibility Defined

The party responsible for making the refund is the party through which a consumer purchases a ticket. That can mean an airline, for a direct purchase, or a travel agency, online or bricks-and-mortar third-party agency.

Applicability

The refund rule applies to any and all tickets, even the most nonrefundable. It also applies to all delays and cancellations—even those caused by external force majeure events such as weather, volcanoes, fires, and such. It updates a rule that societies have lived by since there were trading societies:“ You pay for something but the supplier doesn’t deliver, you get your money back.” It’s that simple.

Why the Rule is Needed

Prior to the issuance of this and related rules, airline obligations during a delay or cancellation were largely defined by each line’s contract of carriage. And those contract provisions varied greatly among the different lines; some quite specific and others not even mentioning the situation.

The most egregious violations were by airlines that virtually insisted a delayed passenger accept its offer of alternative transport—usually the next available seat on that line’s flight, occasionally a seat on another line’s flight. If a passenger wasn’t satisfied by the offer, the airline would try to get the passenger to accept a credit voucher toward a future flight—a voucher that might expire as soon as one year and is worth a lot less than cash.

Both Congress and the DoT have said that isn’t good enough. If you don’t like your airline’s offer, you get a full refund. Period.

Possible Problem

The main push-back on the new rule has come from online travel agencies. They’re worried that while they are required to refund a passenger promptly, airlines may not reimburse them for the refund in a timely manner. Presumably, if this situation emerges, DoT will provide an appropriate remedy.

Caution

The refund rule applies only to flights that an airline cancels or delays. If you, as a passenger, see trouble brewing and cancel proactively in order to get a head start on Plan B, you get only what the ticket rules and the airline’s contract of carriage provide. Airlines will likely try to game the current rule by putting off a cancellation or delay until the last minute, hoping you‘ll blink first. We’ll see if this happens.

For the Future

The DoT still faces a long list of consumer issues, some pressing, some not so much. I suspect we won’t see much more during the remainder of this administration, and nobody knows what either a Harris or second Trump administration might do. All I know is that the consumer advocates will be dogging whoever is put in charge.

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