DOT Proposes New Protections for Consumers Seeking Airline Ticket Refunds

On Wednesday, the U.S. Department of Transportation (DOT) proposed a new consumer protection policy that would light a fire under airlines’ efforts to rectify this summer’s notoriously chaotic air travel situation. If adopted, it would significantly strengthen protections for consumers seeking refunds for airline tickets.

The new rule would require carriers to refund a passenger’s ticket if their domestic flight ends up being delayed by more than three hours, or their international flight by six hours or more, Travel + Leisure reported.

Since the onset of COVID-19 catastrophically disrupted in early 2020, DOT has been inundated with complaints from air travel customers with non-refundable tickets, who didn’t fly because airlines canceled or significantly altered their flights, or because they decided not to travel for pandemic-related reasons.

A significant part of the problem has been airlines taking advantage of the fact that the terms “cancellation” and “significant change” weren’t precisely defined under the department’s existing rules aimed at prohibiting unfair practices. That lack of definition has led to “inconsistency among carriers on when passengers are entitled to refunds,” according to the DOT’s announcement.

While the Department has required airlines to refund customers when their flights are canceled or significantly changed for years, reiterating its rule when sudden border closures and government-imposed restrictions affected many travelers amid the pandemic. The government had to blatantly order airlines to issue cash refunds to customers whose flights were canceled or changed, or who chose not to fly due to health concerns.

Even then, some carriers failed to comply, with various airlines being so bold as to question the DOT’s authority to require refunds at all. In November 2021, the Department’s Office of Aviation and Consumer Protection issued its largest-ever find for “extreme delays in providing refunds to thousands of consumers” for flights canceled by the carrier.

“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” U.S. Transportation Secretary Pete Buttigieg said in a statement. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

Under the new proposal, the DOT’s interpretation of “cancellations” and “significant changes” would finally be codified. Significant changes would include:

— 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.

If ultimately adopted, the new policy would also require that airlines make flight credits or vouchers valid indefinitely when passengers need to cancel their tickets 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.” Furthermore, carriers that accept significant government assistance during a pandemic would be obligated to provide customers cash refunds, as opposed to travel credits or vouchers.

The public and all interested parties are invited to attend a virtual public meeting of the Aviation Consumer Protection Advisory Committee regarding this proposal on August 22, 2022. They can also submit comments on this Notice of Proposed Rulemaking (NRPM) within 90 days of the date it gets published in the Federal Register.