Plan your holidays with confidence: Airline passengers will now be entitled to automatic refunds if their flights are canceled or significantly delayed.
The Biden administration announced Wednesday that airlines must provide cash refunds to credit cards within seven days, and customers will not have to call their airline or complete paperwork to get their money back.
The new rule, issued by the Department of Transportation, applies to any travel to or from the United States when the customer does not take an alternative flight or does not accept a travel voucher in lieu of the delayed or canceled flight. Airlines can still offer travel credits to offset flight cancellations, but must inform customers of the cash refund option.
The administration also announced a separate rule Wednesday intended to prevent airlines from charging “junk taxes.” Officials said airlines will now be required to disclose baggage fees, as well as flight change and cancellation fees when customers purchase tickets, so there are no surprises later.
“Airlines should compete with each other to secure passengers’ business, not to see who can charge the most in surprise fees,” Transportation Secretary Pete Buttigieg said in a statement.
What the new airline rules mean for you
As the department’s changes come into effect next year, passengers will gain more clearly defined rights related to airline ticketing and refunds.
In particular, the Department of Transportation is outlining exactly what constitutes a “significant change” for a flight requiring a refund. Previously, airlines had their own refund policies for delayed flights, creating confusion for customers.
Here are the situations included in the new definition of significant change:
- Delays of three hours or more for domestic flights
- Delays of six hours or more for international flights
- Further links on the new route
- Changes to the departure or arrival airport
- Downgrading to a “lower service class”
When flights are canceled or significantly delayed, airlines must now provide full refunds, including all taxes and fees, even if some of those taxes and fees are sunk costs to the airline (meaning they cannot be recovered).
Finally, under the new rule, passengers will also be entitled to a refund of baggage fees if their baggage is not delivered within 12 hours for domestic flights, or within 15-30 hours for international flights.
More from Money:
Best airline credit cards of 2024
Dollar Scholar asks: What’s the secret to scoring on cheap flights?
The best places to travel