The DOT’s New Airline Refund Rules Officially Start Today

The new Department of Transportation (DOT) rule that requires airlines to issue refunds for delayed or canceled flights, and is expected to heavily impact travel advisors, officially goes into effect today.

The DOT issued the final rule in April, launching it as a pro-consumer move that would force airlines to refund passengers who have their flights significantly delayed (delays of three hours or more domestically and six hours internationally) or canceled. It also had the same requirements for ancillary services, including checked bags and Wi-Fi, that weren’t provide or delayed.

U.S. Transportation Secretary Pete Buttigieg said at the time that the rule “sets a new standard” for prompt cash refunds from passengers, requiring them to be prompt, automatic, and made in cash or the original form of payment.

“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. 

The news was seen as a win for consumers, but not for the U.S. travel trade. The American Society of Travel Advisors (ASTA) quickly came out against hot the rule was written. ASTA said that a lack of understanding from the DOT created a rule that harms small travel agencies (the “ticket agents” in the DOT rule) that book air.

Paul Ruden, the former legal counsel for ASTA and TMR columnist, took a look at the rule in late April, and called the obligations placed on advisors’ shoulders “unsustainable” He also wrote on exactly how travel advisors should view the rule.

ASTA has fought in favor of The Flight Refund Fairness Act (H.R. 9552), which would exempt ticket agents that are small businesses from the rule since the rule passed and particularly during its Legislative Day in Washington D.C. in September.

The rule was introduced in the House on Sept. 12 by a group of bipartisan cosponsors, but has not made progress since.