Proposed rule change could make it easier to get airline ticket refunds

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Travelers need to remember refunds are for cancellations, not overbookings or delays

After a summer that will likely go down as the most turbulent travel season that the airline industry has ever faced, questions continue to linger about refunds – a can of worms it’s had to deal with ever since the COVID-19 pandemic threw a wrench in the industry’s works.

The U.S. Department of Transportation (DOT) said it’s been inundated with a flood of air travel service complaints concerning refunds. The majority of those came from consumers holding non-refundable tickets but who didn't travel because airlines canceled or considerably changed their flights, or because travelers decided not to fly for pandemic-related reasons such as health concerns.

To try and establish something that’s clear and works for both the airlines and consumers, the agency is seeking public comment for a proposed rule regarding refunds – “Airline Ticket Refunds and Consumer Protections.” If adopted, the rule would “significantly strengthen protections for consumers seeking refunds for airline tickets.” 

“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” said U.S. Transportation Secretary Pete Buttigieg. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

Actually, getting everyone on the same page might not be that difficult. Airlines for America (A4A), a group representing major U.S. carriers, told ConsumerAffairs that “We are all in this together, and U.S. airlines are committed to continuing to work collaboratively with all stakeholders to overcome these headwinds. Airlines want travelers to have a safe, seamless, and positive travel experience and are working toward that goal every day.”

The biggest change travelers can expect

The proposed rule has several goals, but the primary one for consumers is that airlines will be required to refund travelers if there are cancellations or “significant changes of flight itinerary.”

For example, if a 10 a.m. scheduled departure is moved to 6:30 a.m., the DOT would consider the 10 a.m. flight canceled. Another cancellation rule would apply if a flight from Denver to Miami that was originally scheduled as a non-stop flight added a stop in-between. 

One rule, though, is making airline pundits take notice: When an aircraft is changed and the change results in a “significant downgrade of the available amenities and travel experiences” then it is considered a canceled flight.

“All of these are straightforward with the exception of that one,” said Brett Snyder, author of the airline industry site Cranky Flier. “The reason that one is vague is because DOT is asking for comment on how to define it in the final rulemaking.

It gives an example of a person traveling with a wheelchair and a new aircraft doesn’t have the room to properly store the wheelchair as the original aircraft did. But it’s unclear what else should fall under that.”

In the meantime, what are travelers' rights regarding refunds?

As it stands now, by law, the DOT says that when a flight is canceled, “a consumer is entitled to a refund if the airline canceled a flight, regardless of the reason, and the consumer chooses not to travel.” No ifs, ands, or buts about it.

But, while a cancellation means a refund should be issued, other things like delays and overbooking come with other sets of rules.

“In the event of a flight cancellation or delay as a result of an airline reducing its schedule, U.S. national law entitles passengers to compensation only if they were denied boarding due to overbooking,” Rosa Garcia, Senior Legal Counsel at AirHelp, told ConsumerAffairs. 

“Given the reduced flight schedule, overbooked flights are possible with passengers trying to book the limited available flight selections. A customer who has been delayed due to overbooking could be entitled to up to $1,350 compensation.

"If, on the other hand, passengers are delayed on the tarmac, U.S. law obliges airlines to inform passengers and offer access to food, water, restrooms, and any necessary medical attention. However, there is no compensation for the delay.”

Consumers who’d like to comment on the DOT’s proposed changes can do so here.

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