DoT Proposes New Rule for Stronger Protections for Consumers Seeking Refunds from Airlines

Stronger Protections for Consumers Seeking Refunds from Airlines

The U.S. Department of Transportation (DoT) announced this week a proposed rule, which if adopted, would significantly strengthen protections for passengers seeking refunds from airline. Since the start of the pandemic, there’s been a spike in air travel service complaints from consumers with non-refundable tickets who did not travel because airlines canceled or significantly changed their flights or because the consumers decided not to fly for pandemic-related reasons.
 
“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” said U.S. Transportation Secretary Pete Buttigieg said in a press release. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

For now, DoT requires airlines and ticket agents to refund travelers if airlines cancel or significantly change their flights. However, the terms significant change and cancellation had not previously been defined. Also, since the start of the COVID-19 pandemic, various airlines have questioned the Department’s authority to require refunds for flights airlines cancel or significantly change. The new proposal would codify the Department’s longstanding interpretation that a failure to provide refunds when a carrier cancels or significantly changes a flight to, from, or within the United States is an unfair practice. The Department is also proposing, for the first time, to define the terms significant change and cancellation.  

Proposed Rule

Passengers, as long as they don’t accept an alternative mode of transportation from the airline, will be eligible for a refund in any of the following circumstances, :

• Changes that affect the departure and/or arrival times by three hours or more for a domestic flight or six hours or more for an international flight;
• Changes to the departure or arrival airport;
• Changes that increase the number of connections in the itinerary; and 
• Changes to the type of aircraft flown if it causes a significant downgrade in the air travel experience or amenities available onboard the flight.

Under the proposal, a canceled flight would mean a flight that was published in a carrier’s Computer Reservation System at the time of the ticket sale but was not operated by the carrier.

The proposal would also require that airlines and ticket agents provide passengers flight credits or vouchers that are valid indefinitely when passengers are unable to fly for certain pandemic related reasons, such as government-mandated bans on travel, closed borders, or passengers advised not to travel to protect their health or the health of other passengers. Further, under the proposal, airlines and ticket agents that receive significant government assistance related to a pandemic would be required to issue refunds, in lieu of non-expiring travel credits or vouchers. 

For now this is just a proposal. DoT is now encouraging members of the public and interested parties to attend a virtual public meeting of the Aviation Consumer Protection Advisory Committee focusing on this rulemaking scheduled for August 22, 2022, and to submit comments on this Notice of Proposed Rulemaking. Comments must be received within 90 days of the date the notice is published in the Federal Register.