DOT Unveils New Rules for Airline Passenger Compensation

New rules from the U.S. Department of Transportation (DOT) will dramatically change how airline passengers are treated when their plans are changed by airlines.

The DOT issued final rules on some consumer protections this week that it said are designed to “ensure that consumers are treated fairly when they do not receive service that they paid for.”  

The long-rumored new rules are aimed at how airlines compensate passengers for canceled flights or “significant” delays, along with how airlines and “ticket agents” disclose baggage and change fees. 

While ASTA said it is still examining the new rules to see specifically how they impact travel advisors, who fall under that “ticket agents” category, here is how the new rules will preliminary impact consumers:

Cancellations and delays
For consumers, the most notable part of the rule is most likely the new requirement that airlines compensate passengers for when flights are canceled or significantly delayed.

“Under the final rule, U.S. and foreign air carriers must provide prompt automatic refunds and ticket agents must provide prompt refunds upon request when airlines cancel or significantly change their flights and consumers do not accept the alternatives offered,” the DOT said in the new rule. 

While airlines have already been required to issue refunds, the new rule clarifies that process by defining a “significant” delay as three hours for domestic flights and six hours for international flights. For any flights delayed that long or more, airlines must now automatically issue either refunds for the fare and fees or offer credit.

The rule also forces refunds if a passenger is pushed to an itinerary with different departure or arrival points, forced to fly with more connections than originally ticketed, or downgraded to a lower class of service onboard.

Airlines are allowed to offer credit instead of a refund, but passengers have the right to reject any offers of credit or miles, according to the new rules. Airlines also must provide refunds for tickets purchased with credit cards within 7 business days or those purchased with payments other than credit cards within 20 calendar days.

The refunds include bag fees and WiFi fees if paid ahead of time. Airlines will not be required to refund those who either get free bags because of their loyalty status or pay with points.

There is also a clause in the new rules for refunds for delayed baggage—bags delayed more than 12 hours on domestic itineraries or 15 on international itineraries will require refunds from airlines. The same goes for other ancillary fees that were not provided.

Fee disclosures
The new rules will also force a level of transparency on how airlines and ticket agents advertise fares. Advertised fares will now have to disclose checked and carry-on bag fees, cancellation fees, and charge fees for airline tickets.

Most notably, airlines showing fees on their websites will have to show all those fees the first time a consumer searches for a flight.