Transportation Secretary Warns US Airlines About New Refund Rules

The U.S. Department of Transportation (DOT) outlined for U.S. carriers that refund requirements in the FAA Reauthorization Act took effect on May 16, 2024.

Buttigieg said the DOT expects airlines to clearly and proactively inform passengers of their right to a refund whenever their flight is canceled or significantly changed. Cash refunds must be automatic for passengers when they are owed, not vouchers or credits.

In addition, carriers should make it easy for passengers to get free rebooking, meals, hotels, and/or transportation to and from hotels as promised during controllable disruptions. If passengers opt for vouchers or credits after a canceled or significantly changed flight, they must be valid for at least five years.

The DOT also denied requests from the airline industry for additional time to comply with various aspects of the FAA Reauthorization Act and the Department’s April 2024 Final Rule on Refunds and Other Consumer Protections. The DOT found no basis for adjusting the compliance dates set forth in the ruling.

Buttigieg’s letter read, in part:

As we emerge from the air travel disruptions caused by the global technology outage earlier this month and the busy summer travel season continues, I want to ensure there is clarity and a shared understanding when it comes to the rights of air travelers and the obligations of U.S. and foreign airlines. The operational challenges of this month have served as a reminder of the importance of passenger protections—which now include a legal requirement to clearly and proactively inform customers about their right to a refund and provide prompt cash refunds when consumers do not opt to accept travel alternatives following a cancellation or major delay.

First, I need to remind airlines operating in the United States that the refund requirements in the FAA Reauthorization Act took effect upon enactment of the law on May 16, 2024. Now that this is law, our expectation is that airlines are doing everything in their power to comply.

Second, in recent weeks we have heard reports of unacceptable customer service failures and received thousands of air travel service complaints against airlines. When problems come to our attention, we will investigate them and, where violations have occurred, use our enforcement powers to hold offending airlines accountable.