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Automatic Refunds and No More Hidden Fees: D.O.T. Sets New Rules for Airlines

The Transportation Department issued new requirements on refunds when flights are canceled or delayed and on revealing “junk” fees before booking. Here’s what passengers can expect.

By Christine Chung

The Transportation Department on Wednesday announced new rules taking aim at two of the most difficult and annoying issues in air travel: obtaining refunds and encountering surprise fees late in the booking process.

“Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them — without having to ask,” said U.S. Transportation Secretary Pete Buttigieg in a statement, adding that the changes would not only save passengers “time and money,” but also prevent headaches.

The department’s new rules, Mr. Buttigieg said, will hold airlines to clear and consistent standards when they cancel, delay or substantially change flights, and require automatic refunds to be issued within weeks. They will also require them to reveal all fees before a ticket is purchased.

Airlines for America , a trade group representing the country’s largest air carriers, said in a statement that its airlines “abide by and frequently exceed” D.O.T. consumer protection regulations.

Passenger advocates welcomed the new steps.

Tomasz Pawliszyn, the chief executive of AirHelp, a Berlin-based company that assists passengers with airline claims, called it a “massive step forward and huge improvement in consumer rights and protection” that brings the United States closer to global standards in passenger rights.

Here’s what we know about the D.O.T.’s new rules, which will begin to go into effect in October.

There’s now one definition for a “significant” delay.

Until now, airlines have been allowed to set their own definition for a “significant” delay and compensation has varied by carrier . Now, according to the D.O.T., there will be one standard: when departure or arrival is delayed by three hours for domestic flights and six hours for international flights.

Passengers will get prompt refunds for cancellations or significant changes for flights and delayed bags, for any reason.

When things go wrong, getting compensation from an airline has often required establishing a cumbersome paper trail or spending untold hours on the phone. Under the new rules, refunds will be automatic, without passengers having to request them. Refunds will be made in full, excepting the value of any transportation already used. Airlines and ticket agents must provide refunds in the original form of payment, whether by cash, credit card or airline miles. Refunds are due within seven days for credit card purchases and within 20 days for other payments.

Passengers with other flight disruptions, such as being downgraded to a lower service class, are also entitled to refunds.

The list of significant changes for which passengers can get their money back also includes: departure or arrival from an airport different from the one booked; connections at different airports or flights on planes that are less accessible to a person with a disability; an increase in the number of scheduled connections. Also, passengers who pay for services like Wi-Fi or seat selection that are then unavailable will be refunded any fees.

Airlines must give travel vouchers or credits to ticketed passengers unable to fly because of government restrictions or a doctor’s orders.

The vouchers or credits will be transferable and can be used for at least five years after the date they were issued.

Fees for checked baggage and modifying a reservation must be disclosed upfront.

Airlines and ticket agents are now required to display any extra fees for things like checking bags or seat selection clearly and individually before a ticket purchase. They will also need to outline the airline’s policies on baggage, cancellations and changing flights before a customer purchases a ticket.

The rules, which apply to all flights on domestic airlines and flights to and from the United States operated by foreign airlines, have varying start dates.

For example, automatic refunds must be instituted by the airlines within six months. But carriers have a year before they’re required to issue travel vouchers and credits for passengers advised by a medical professional not to fly.

Follow New York Times Travel on Instagram and sign up for our weekly Travel Dispatch newsletter to get expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places to Go in 2024 .

Christine Chung is a Times reporter covering airlines and consumer travel. More about Christine Chung

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US mandates new airline refund rules, fee disclosures

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Enough with airline hidden fees: DOT rules take aim at 'corporate rip-offs'

The Department of Transportation announced new rules on Wednesday to better protect airline passengers against “costly surprise airline fees,” the agency said.

As part of the Biden-Harris Administration’s efforts to crack down on “corporate rip-offs,” two new air travel rules were finalized. The rules mandate airlines to pay full refunds in a timely and straightforward manner and ensure transparency regarding fees associated with air travel.

The new regulations are expected to save consumers over half a billion dollars each year in hidden junk fees, the DOT said. 

“Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them – without having to ask,” Secretary of Transportation Pete Buttigieg said in a statement. 

“Today’s announcements will require airlines to both provide passengers better information about costs before ticket purchase, and promptly provide cash refunds to passengers when they are owed – not only saving passengers time and money, but also preventing headaches.”

Learn more: Best travel insurance

What to know about the newly finalized rules for airline passengers:

What are the new rules from the DOT and how do they impact passengers?

The first new regulation will simplify the process for airline passengers to get what they’re owed by requiring airlines to give automatic cash refunds. Passengers can get these refunds when their flights are “cancelled or significantly changed, their checked bags are significantly delayed, or the ancillary services, like Wi-Fi, they purchased are not provided,” the announcement said. 

The second will require airlines and ticket agents to be upfront about any hidden fees, such as checking a bag or changing a flight, to help “consumers avoid unneeded or unexpected charges that can quickly increase and add significant cost to what may, at first, look like a cheap ticket.” Airline fees, increasingly common for airlines to boost their profit, have grown “confusing” for passengers.

Both rules will go into effect in about six months, or around the end of October, the agency said.

Making the skies more accessible: This proposal would help the DOT 'more easily penalize airlines' that damage wheelchairs

How will the new rules make getting refunds from airlines easier? 

Getting a refund from airlines is a long-winded and often complicated process. Sometimes, passengers end up getting a travel credit or voucher instead of an actual reimbursement or just a partial refund. Under the new regulation, refunds will be much more straightforward. 

Airlines must promptly provide automatic refunds without passengers explicitly requesting them, and the refunds must be issued in the original payment method used to make the purchase.  

How fast will the refund get to me?

Airlines will have seven business days to make full refunds for credit card purchases and 20 calendar days for other payment methods. 

How else is the DOT cracking down on hidden airline junk fees? 

It can be tricky to know exactly how much your final airline ticket will cost due to hidden fees. What may look like a low price at first can quickly add up. Airlines will now have to disclose any baggage, change and cancellation fees and policies before purchases are made – and it has to be clear and upfront, not hidden behind a hyperlink. Airlines will also need to be transparent about weight and dimension limitations. Third-party websites such as Expedia or Booking.com will also be required to display this information. 

These days, it’s common for people to pay for seat selection, especially for the lowest price fares, but carriers will now need to inform consumers that seats are guaranteed and it’s unnecessary to pay for one.

The DOT is also banning airlines from using bait-and-switch tactics, in which an airline advertises a discounted fare that doesn’t include mandatory fees that drive the ticket price up. 

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected] .

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Airlines will now be required to give automatic cash refunds for canceled and delayed flights

FILE - Passenger drop off their baggage at United Airlines in C Terminal at George Bush Intercontinental Airport, Thursday, Dec. 21, 2023, in Houston. The Biden administration issued final rules Wednesday, April 24, 2024, to require airlines to automatically issue cash refunds for things like delayed flights and to better disclose fees for baggage or canceling a reservation. (Brett Coomer/Houston Chronicle via AP, File)

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The Biden administration issued final rules Wednesday to require airlines to automatically issue cash refunds for things like delayed flights and to better disclose fees for baggage or canceling a reservation.

The Transportation Department said airlines will be required to provide automatic cash refunds within a few days for canceled flights and “significant” delays.

Under current regulations, airlines decide how long a delay must last before triggering refunds. The administration is removing that wiggle room by defining a significant delay as lasting at least three hours for domestic flights and six hours for international ones.

Airlines still will be allowed to offer another flight or a travel credit instead, but consumers can reject the offer.

The rule will also apply to refunds of checked-bag fees if the bag isn’t delivered within 12 hours for domestic flights or 15 to 30 hours for international flights. And it will apply to fees for things such as seat selection or an internet connection if the airline fails to provide the service.

Complaints about refunds skyrocketed during the COVID-19 pandemic, as airlines canceled flights and, even when they didn’t, many people didn’t feel safe sharing a plane cabin with other passengers.

Airlines for America, a trade group for large U.S. carriers, noted that refund complaints to the Transportation Department have fallen sharply since mid-2020. A spokesperson for the group said airlines “offer a range of options — including fully refundable fares — to increase accessibility to air travel and to help customers make ticket selections that best fit their needs.”

The group said the 11 largest U.S. airlines issued $43 billion in customer refunds from 2020 through 2023.

The Transportation Department issued a separate rule requiring airlines and ticket agents to disclose upfront what they charge for checked and carry-on bags and canceling or changing a reservation. On airline websites, the fees must be shown the first time customers see a price and schedule.

The rule will also oblige airlines to tell passengers they have a guaranteed seat they are not required to pay extra for, although it does not bar airlines from charging people to choose specific seats. Many airlines now charge extra for certain spots, including exit-row seats and those near the front of the cabin.

The agency said the rule will save consumers more than $500 million a year.

Airlines for America said its members “offer transparency and vast choice to consumers” from their first search.

The new rules will take effect over the next two years. They are part of a broad administration attack on what President Joe Biden calls “junk fees.” Last week, Transportation Secretary Pete Buttigieg announced that his department will let state officials in 15 states help enforce federal airline consumer protection laws .

Airlines required to refund passengers for canceled, delayed flights

Transportation Secretary Pete Buttigieg announced the new rules Wednesday.

Good news for airline travelers: the Department of Transportation on Wednesday announced it is rolling out new rules that will require airlines to automatically give cash refunds to passengers for canceled and significantly delayed flights.

"This is a big day for America's flying public," said Transportation Secretary Pete Buttigieg at a Wednesday morning news conference. Buttigieg said the new rules -- which require prompt refunds -- are the biggest expansion of passenger rights in the department's history.

Airlines can no longer decide how long a delay must be before a refund is issued. Under the new DOT rules, the delays covered would be more than three hours for domestic flights and more than six hours for international flights, the agency said.

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This includes tickets purchased directly from airlines, travel agents and third-party sites such as Expedia and Travelocity.

The DOT rules lay out that 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."

DOT will also require airlines to give cash refunds if your bags are lost and not delivered within 12 hours.

The refunds must be issued within seven days, according to the new DOT rules, and must be in cash unless the passenger chooses another form of compensation. Airlines can no longer issue refunds in forms of vouchers or credits when consumers are entitled to receive cash.

Airlines will have six months to comply with the new rules.

"Passengers deserve to get their money back when an airline owes them -- without headaches or haggling," Buttigieg said in a statement.

The DOT said it is also working on rules related to family seating fees, enhancing rights for wheelchair-traveling passengers for safe and dignified travel and mandating compensation and amenities if flights are delayed or canceled by airlines.

Buttigieg said the DOT is also protecting airline passengers from being surprised by hidden fees -- a move he estimates will have Americans billions of dollars every year.

The DOT rules include that passengers will receive refunds for extra services paid for and not provided, such as Wi-Fi, seat selection or inflight entertainment.

The rules come after the agency handed Southwest Airlines a record $140 million fine for its operational meltdown during the 2022 holiday travel season.

MORE: New whistleblower claims put Boeing's quality control under more scrutiny

Buttigieg said Southwest's fine sets a "new standard" for airlines and passenger rights.

"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," he said.

Buttigieg reiterated that refund requirements are already the standard for airlines, but the new DOT rules hold the airlines to account and makes sure passengers get the "refunds that are owed to them."

"Airlines are not enthusiastic about us holding them to a higher standard," Buttigieg said, adding that he "knows they will be able to adapt to this."

Airlines for America, the trade association for the country's leading passenger and cargo airlines, told ABC News in a statement that its members "offer a range of options -- including fully refundable fares." Is said consumers are "given the choice of refundable ticket options with terms and conditions that best fit their needs at first search results."

The group said the 11 largest U.S. airlines issued $43 billion in customer refunds from 2020 through 2023 nearly $11 billion in refunds just last year.

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Final Rule - Enhancing Transparency of Airline Ancillary Service Fees

The U.S. Department of Transportation is issuing a final rule to protect airline passengers from surprise fees when purchasing a ticket. The rule requires airlines and ticket agents to tell consumers upfront what fees they charge for a first or second checked bag, a carry-on bag, and for canceling or changing a reservation. This will help consumers avoid unneeded or unexpected fees that can increase quickly and add significant cost to what may, at first, look like a less expensive ticket. Under the rule, airlines and ticket agents must give consumers the option to receive passenger-specific fees taking into account their participation in the airline’s rewards program, their military status, or the credit card or to remain anonymous and receive the standard fee information. The rule also requires airlines to disclose their baggage, change, and cancellation policies before ticket purchase.