Sad (tired) woman sitting in the airport
On April 1, 2024 the Secretary Buttigieg signed the final version of the revised rule on airline refund policies. The new policy requires automatic refunds in certain circumstances. The biggest change in the rule is the standardization of definitions. This has been an issue for some time, that every airline has a different definition of what cancellation is. Harmonizing them seems to be a consumer friendly goal. So, let’s go through the PDF and summarize the changes.
- Cancelled Flight – a flight that was published in a carrier’s Computer Reservation System (CRS) at the time of the ticket sale but not operated by the carrier.
- Significant Change of Flight Itinerary – A change of flight itinerary made where a passenger is:
- scheduled to depart from the origination airport three hours or more (for domestic itineraries) or six hours or more (for international itineraries) earlier than the original scheduled departure time;
- scheduled to arrive at the destination airport three hours or more (for domestic itineraries) or six hours or more (for international itineraries) later than the original scheduled arrival time;
- scheduled to depart from a different origination airport or arrive at a different destination airport;
- scheduled to travel on an itinerary with more connection points than that of the original itinerary;
- downgraded to a lower class of service;
- has a disability and
- scheduled to travel through one or more connecting airports that differ from the original itinerary; or
- is scheduled to travel on a substitute aircraft that results in one or more accessibility features needed by the passenger being unavailable.
- Significant Delayed Bags –
- For domestic flights, when an airline fails to deliver the checked bag within 12 hours of the passenger’s flight arriving at the gate and they have filed a Mishandled Baggage Report.
- For international itineraries where the flight duration of the segment between the United States and a point in a foreign country is 12 hours or less, a refund of baggage fee is due when the airline fails to deliver the checked bag within 15 hours of the passenger’s flight arriving at the gate and they have filed a Mishandled Baggage Report.
- For international itineraries where the flight duration of the segment between the United States and a point in a foreign country is over 12 hours, a refund of baggage fee is due when the airline fails to deliver the checked bag within 30 hours of the passenger’s flight arriving at the gate and they have filed a Mishandled Baggage Report.
- Automatic Refunds must be provided in when:
- the airline cancels a flight and does not offer alternative transportation or travel credits, vouchers, or other compensation for the canceled flight in lieu of a refund
- the airline significantly changes a flight and the passenger rejects the significantly changed flight itinerary and is not offered alternative transportation or offer travel credits, vouchers, or other compensation in lieu of a refund
- the passenger rejects the significantly changed flight or alternative transportation offered as well as travel credits, vouchers, or other compensation offered for a canceled flight or a significantly changed flight itinerary in lieu of a refund;
- the airline offers a significantly changed flight or alternative transportation for a significantly changed flight itinerary or a canceled flight, but the passenger does not respond to the transportation offered on or before a response deadline set by the airline and does not accept any offer of travel credits,
vouchers, or other compensation, and the airline’s policy is to treat a lack of a response as a rejection of the alternative transportation offered; - the airline does not offer a significantly changed flight or alternative transportation for a significantly changed flight itinerary or a canceled flight but offers travel credits, vouchers, or other compensation in lieu of a refund, and the passenger does not respond to the alternative compensation offered on or before a reasonable response date in which case the lack of a response is deemed a rejection; or
- the airline offers a significantly changed flight or alternative transportation for a significantly changed flight itinerary or a canceled flight and offers travel credits, vouchers, or other compensation in lieu of a refund and the airline has not set a deadline to respond, the passenger does not respond to the
alternatives offered, and does not take the flight.
So, the new definitions very broadly define a cancelled flight as one that was scheduled at the time of purchase but ultimately not operated. That includes a schedule change well in advance and a day of departure disruption. It doesn’t give exceptions for circumstances out of the airline’s control. It just says…if the doesn’t go, it is cancelled. If the flight changes in this way, it is significant. And significant changes or cancellations result in an automatic entitlement of a refund. The passenger must also be informed of their right to a refund before making an offer for alternative transportation, credit, voucher, or other options in lieu of refunds.
In addition, it clarifies that the responsibility for a refund is the ‘merchant of record’, being it the travel agent if sold through one, or the airline and that the merchant of record is required to provide a prompt ticket refund when due. A prompt refund is 7 business days for credit card purchases, 20 calendar days otherwise.
Airlines are allowed to set a reasonable deadline to accept or reject a significant change or offer of alternative transportation and must create and disclose a policy as to whether a failure to respond will result in an automatic refund or forfeiting the right to a refund.
To cover concerns prompted by what occurred during the worst impact of the pandemic, travel credits or vouchers, valid for at least five years and transferable, must be issued when a passenger is:
- advised by a licensed treating medical professional not to travel during a public health emergency to protect himself/herself from a serious communicable disease, they purchased the airline ticket before a public health emergency was declared, and ares scheduled to travel during the public health emergency to or from the area affected by the public health emergency;
- prohibited from travel or is required to quarantine for a substantial portion of the trip by a governmental entity in relation to a serious communicable disease and they purchased the airline ticket before a public health emergency for that area was declared or, if there is no declaration of a public health emergency, before the government prohibition or restriction for travel to or from that area is imposed; or
- advised by a licensed treating medical professional not to travel, irrespective of a public health emergency, because they has or is likely to have contracted a serious communicable disease and would pose a direct threat to the health of others.
Airlines can require documentation for this medical waiver, which can include a government order, or a statement from a medical professional. Aside from government health mandate, this allows someone to get a refund with a doctor’s note, if you can find a doctor willing to say they have a serious communicable disease that would pose a direct threat to others.
Finally, airlines are now required to refund fees for significantly delayed baggage, which many already did proactively, as well as refunding fees for any ancillary service they failed to provide.