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Airline passengers are now entitled to automatic cash refunds for canceled flights. Here's how to get yours.

By Venessa Wong

Starting this fall, new rules will require airlines to automatically refund passengers for 'significant' delays and cancellations

Flight delays and cancellations cost U.S. travelers a lot: meals at the airport, unplanned hotel stays, rearranged reservations and even completely canceled trips. At some point, many American travelers have the infuriating experience of a major flight delay or cancellation wreaking havoc on their meticulously planned vacation, and haggling desperately - and unsuccessfully - with an agent for any compensation for their lost time and money.

Starting at the end of October, new Department of Transportation rules will spell out when passengers are entitled to a cash refund "when airlines cancel or significantly change their flights, significantly delay their checked bags, or fail to provide the extra services they purchased," the department announced last week.

Service disruptions are a huge expense for passengers and airlines. Southwest Airlines' 2022 service meltdown alone, which impacted 17,000 flights, resulted in more than $600 million in refunds and reimbursements, as well as a $90 million voucher fund from which delayed customers can request a $75 voucher starting April 30. The DOT said its actions to protect consumers under the Biden administration have returned more than $3 billion to airline passengers.

The DOT's new rules clarify what counts as a "significant" change, which was previously undefined: departure or arrival times that are more than three hours domestically and six hours internationally for any reason; departures, arrivals or connections at different airports; increased number of connections; downgrades to a lower class of service; or flights on different planes that are less accessible to people with disabilities.

The DOT said this gives consumers clearer rights rather than making them rely on airlines to decide when compensation is owed. Airlines also cannot substitute vouchers, travel credits or other forms of alternative compensation unless the passenger chooses them. Consumers deserve their money back "without headaches or haggling," Transportation Secretary Pete Buttigieg said.

Some observers, meanwhile, suggested the new federal rule didn't go far enough in protecting consumers.

"New passenger rights in the U.S.A. are a massive step forward and a huge improvement in consumer rights and protection," said Tomasz Pawliszyn, the CEO of AirHelp, a Germany-based service that helps passengers get refunds. "However, it's important to note that the current state of passenger rights in the U.S.A. is far behind other regions - such as the U.K. or E.U. - and that this new initiative brings it much closer to global standards."

For mishandled bags, passengers are also entitled to a cash refund of their checked-bag fee if their luggage is not delivered within 12 hours of their domestic flight arriving at the gate, or within 15 to 30 hours of their international flight arriving at the gate.

If passengers paid for extras such as wifi, seat selection or in-flight entertainment and the airline fails to provide that service, they are also entitled to a refund.

The rules do not require free meals or hotel accommodations for affected passengers, although 10 major U.S. airlines - Alaska (ALK), Allegiant (ALGT), American (AAL), Delta (DAL), Frontier (ULCC), Hawaiian, JetBlue (JBLU), Southwest (LUV), Spirit (SAVE) and United (UAL) - have agreed to guarantee free rebooking and meals. All of those airlines except Frontier will also guarantee hotel accommodations when an airline issue causes a significant delay or cancellation.

In other countries, travelers are entitled to compensation (ranging in Europe from about $300 for short flights to $650 for long-haul flights) to make up for losses such as missed appointments, weddings, client meetings, holidays or workdays, Pawliszyn said. "Passengers in the U.S.A. are still missing out on the right to care in the case of disruptions, such as food and drink, and accommodation in the case of missed connections," he said.

In 2023, airlines had a cancellation rate of 1.29%. They reported 289 tarmac delays of more than three hours on domestic flights and 27 tarmac delays of more than four hours on international flights, according to the Bureau of Transportation Statistics. They mishandled 0.58% of bags.

"Flight disruption still urgently needs to be addressed," said Eric Napoli, the vice president of legal strategy at AirHelp. "We encourage the administration to follow these rules with additional steps to alleviate the massive impact that flight disruption has on passengers and businesses."

A separate Transportation Department rule cracking down on junk fees, which have been a focus of the Biden administration, will also require airlines and ticket agents to disclose up front what fees they charge for checked and carry-on bags, and for canceling or changing a reservation. The DOT expects consumers will save more than $500 million annually in hidden airline fees.

Dealing with a big flight delay or cancellation is an incredibly frustrating experience, and getting compensation for it hasn't been easy. Here are some tips to keep in mind:

1. Check the Department of Transportation dashboards on to see what your airline has committed to in terms of rebooking on the same or other airlines, meals vouchers, hotels and other refunds. The dashboard does not yet include refunds for significant delays and cancellations, which go into effect in late October.

2. Remember that you are entitled to a refund in cash - or whatever payment method you used to pay for the trip, such as a credit card or airline miles - and do not have to accept vouchers or travel credits, which may expire.

3. Some credit cards provide travel protection. If the airline is not cooperating, you can contact your credit-card company to dispute the charge. You can also consider filing a complaint with the DOT.

-Venessa Wong

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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05-03-24 1030ET

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