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The U.S. Department of Transportation has proposed stronger airline refund rules. The new rules would strengthen passenger protections, clarifying when airline passengers can claim a full cash refund for a canceled or significantly delayed flight.
With the DOT proposal, airline passengers would be able to claim a full refund if they choose not to travel after a domestic departure or arrival flight time changes by more than three hours or by more than six hours in the case of an international flight. Existing regulations guarantee refunds if a flight is canceled or experiences a “significant delay,” but until the proposed rule, the length of delay hasn't been defined.
The proposal would also enable passengers to claim a refund if an airline:
- Changed the departure or arrival airport
- Increased the number of connections compared to the originally booked ticket
- Downgraded the passenger to a lower class of service
- Changed the aircraft type resulting in a significant downgrade of the available amenities and travel experience
Additionally, the DOT would require airlines to give passengers non-expiring flight credits or vouchers when passengers are unable to fly for pandemic-related reasons – such as border closures, stay-at-home rules or quarantine requirements. And an airline that in the future (after the rule takes effect) obtains a government bailout would be required to offer consumers a cash refund instead of travel vouchers.
View the DOT's full proposal on airline ticket refunds and consumer protection, DOT-OST-2022-0089 and comment at this page, using the blue comment button in the upper left.
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Analysis
It's certainly timely that DOT has proposed clarifying what a significant delay means, given this summer's chaos, with soaring flight cancellations and delays. Some of them have been occasioned by thunderstorms or other weather events, as well as crew ill with COVID-19 or in Europe, labor strikes, but many in the U.S. were occasioned by overly ambitious flight schedules that quickly proved unrealistic, stranding or severely delaying passengers. A little over 3 weeks ago, over 20% of scheduled flights for JetBlue, American Airlines, United Airlines and Delta were delayed in taking off, and yesterday, 8/2/22, JetBlue, AA, and United all still showed 20% of of their flights with delayed take-offs; Delta was a bit better, at 17%. The DOT received over 4300 complaints about airline service in May 2022, over 200% higher than pre-pandemic levels, and trouble obtaining refunds dominated the complaints.
Unfortunately, however, the DOT proposal doesn't go far enough, as it doesn't guide airlines to taking care of passengers more broadly. Many of the cheapest fares involve at least one connection, especially if the passenger is traveling from or to a smaller destination. Recall that last year American Airlines Changed Its Rules for Delayed or Cancelled Flights, such that the airline no longer promises to get a passenger to his/her destination on the next available flight, something that can leave the passenger stranded midway through a journey. AA will refund the rest of the trip to the passenger, but that may not be that helpful to someone who misconnects, AA washes its hands of, and has to pay much more to get to the destination. The DOT proposal doesn't fix anything about this scenario, which can occur more frequently these days with flights flying very full. We'd like to see DOT require airlines to offer to rebook passengers on the next available flight (ideally of any airline, not only the airline's own flights), and if the next available flight is unacceptable to the passenger (for example because it would mean the passenger would miss the meeting or event, resulting in a trip in vain), then the airline should be responsible for getting the passenger back to his/her origin airport, in addition to a full refund of the ticket.
While we'd also like to see protections similar to EC261/2004, with tiered compensation amounts depending on the length of trip, it seems unrealistic to expect similar protections in the U.S.
What do you make of the DOT proposal? Do you plan to comment on it?
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