Biden’s new airline rules will require cash refunds for canceled flights and disclosure of ‘junk fees’ upfront

The Biden Administration announced two pivotal rules Wednesday aimed at safeguarding passengers’ rights and ensuring fair treatment in air travel.

The first rule mandates that airlines promptly issue automatic cash refunds to passengers owed compensation due to flight cancellations, significant changes, delayed baggage return, or undelivered extra services. Secretary Buttigieg emphasized the significance of this measure, stating, “Passengers deserve to get their money back when an airline owes them – without headaches or haggling.” The rule standardizes refund criteria, defining specific circumstances entitling passengers to reimbursement and streamlining the refund process.

Under this rule, passengers are entitled to refunds for canceled or significantly changed flights, delayed baggage return exceeding specified timeframes, and unfulfilled extra services such as Wi-Fi or seat selection. Notably, refunds must be automatic, issued promptly, and in the original form of payment. Airlines are prohibited from substituting vouchers or credits without the passenger’s affirmative consent.

Key provisions of the rule include:

  • Canceled or significantly changed flights: Passengers will be entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered. For the first time, the rule defines “significant change.” Significant changes to a flight include departure or arrival times that are more than 3 hours domestically and 6 hours internationally; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability.
  • Significantly delayed baggage return: Passengers who file a mishandled baggage report will be entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight.
  • Extra services not provided: Passengers will be entitled to a refund for the fee they paid for an extra service — such as Wi-Fi, seat selection, or inflight entertainment — if an airline fails to provide this service.

Simultaneously, the second rule targets surprise fees by requiring airlines and ticket agents to disclose upfront the charges for services like checked bags, carry-ons, and reservation changes. This transparency empowers consumers to make informed decisions and avoid unexpected costs. Secretary Buttigieg emphasized the importance of transparency, stating, “Airlines should compete on the basis of service quality and efficiency, not by burdening passengers with opaque fees.”

Under that rule, airlines and ticket agents are required to:

  • Disclose critical extra fees upfront: The rule requires airlines and ticket agents to display critical extra service fees upfront clearly, conspicuously, and accurately. Each critical extra fee must be individually disclosed the first time that fare and schedule information is provided on the airline’s online platform — and cannot be displayed through a hyperlink. For consumers shopping for flights offline, airlines and ticket agencies must disclose these fees when they provide a fare quote. 
  • Explain critical extra fee policies prior to purchase: To help consumers figure out whether they want to purchase a critical extra service, the rule requires airlines and ticket agents to explain the airline’s baggage, change, and cancellation policies before ticket purchase. For each type of baggage, airlines and ticket agents must spell out the weight and dimension limitations that they impose. Airlines and ticket agents must also describe any prohibitions or restrictions on changing or cancelling a flight, along with policies related to differences in fare when switching to a more or less expensive flight. 
  • Share critical extra fee prices and policies with relevant companies: There are many ways that consumers shop for flights. They may purchase tickets from airlines or travel agencies. To help ensure that critical extra fees are displayed across a variety of platforms, the final rule requires airlines to provide useable, current, and accurate information regarding their baggage, change, and cancellation fees and policies to any company that is required to disclose them to consumers and receives fare, schedule, and availability information from the airline. Failure to provide the data will be considered an unfair practice.
  • Inform consumers that seats are guaranteed: To help consumers avoid unneeded seat selection fees, airlines and ticket agents must tell consumers that seats are guaranteed and that they are not required to pay extra. Prior to offering seat selection for purchase, they must provide the following notice: “A seat is included in your fare. You are not required to purchase a seat assignment to travel. If you decide to purchase a ticket and do not select a seat prior to purchase, a seat will be provided to you without additional charge when you travel.”
  • Provide both standard and passenger-specific fee information: Consumers may be entitled to discounted or waived critical extra fees based on their participation in the airline’s rewards program, their military status, or the credit card that they use. Airlines and ticket agents must give consumers the option to receive this passenger-specific fee information or remain anonymous and receive the standard fee information. The passenger-specific fees must be based on information affirmatively provided by the consumer.
  • End discount bait-and-switch tactics: The final rule puts an end to the bait-and-switch tactics some airlines use to disguise the true cost of discounted flights. Prior to the rule, some airlines were offering deceptive discounts that consumers may have believed applied to the full fare that was being advertised but only applied to a small portion of the ticket price.  The new rule prohibits airlines from advertising a promotional discount off a low base fare that does not include all mandatory carrier-imposed fees.  

Moreover, the DOT’s historic record of consumer protection under the Biden-Harris Administration is underscored by its robust enforcement actions and initiatives. Since taking office, the DOT has imposed substantial fines on airlines for consumer protection violations, facilitated over $3 billion in refunds and reimbursements, and fostered partnerships to expedite consumer complaint resolutions.

Furthermore, ongoing efforts include proposals to ban family seating fees, mandate passenger compensation for flight disruptions, and enhance accessibility for wheelchair users. These initiatives reflect the administration’s commitment to prioritizing consumer interests and fostering accountability within the airline industry.




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