The U.S. Department of Transportation’s (DOT) final ruling requiring airlines to automatically and promptly refund passengers for flight interruptions appears to be misunderstood by all.
At the end of July, U.S. Transportation Secretary Pete Buttigieg sent letters to the CEOs of the 10 largest U.S. airlines to make it clear that the DOT expects them to provide passengers with cash refunds as required by law. In the letter, Secretary Buttigieg reminded airlines that the refund requirements in the FAA Reauthorization Act took effect upon enactment of the law, on May 16, 2024, and that airlines:
- Must clearly and proactively inform passengers of their right to a refund whenever their flight is canceled or significantly changed.
- Must issue cash refunds—not vouchers or credits—to passengers when they are owed. (And, if passengers opt for vouchers or credits after a canceled or significantly changed flight, they must be valid for at least five years.)
- Should make it easier for passengers to get free rebooking, meals, hotels and/or transportation to and from hotels as promised during controllable disruptions.
“In recent weeks we have heard reports of unacceptable customer service failures and received thousands of air travel service complaints against airlines,” Secretary Buttigieg said in the letter. “When problems come to our attention, we will investigate them and, where violations have occurred, use our enforcement powers to hold offending airlines accountable.”
At the time of the ruling, the American Society of Travel Advisors noted that “our primary concern for our members has always been the potential that regulations aimed at protecting consumers purchasing air tickets, could in turn hurt the small ticket agencies who also sell air.” This stems from the wording that “airlines and ticket agents” must pay out these refunds.
More recently, five congressmembers sent a letter to Secretary Buttigieg, said that “Beginning October 28, 2024, travel agencies—98 percent of which are small businesses—will be responsible for providing consumer refunds with money they no longer have to address situations beyond their control.
“While we understand the actions of the Department is to ensure timely refunds to consumers, the rule failed to establish how and when airlines must then reimburse the merchant of record when they are responsible for the refund.”
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