Automatic Refunds and No More Hidden Fees: D.O.T. Sets New Rules for Airlines

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The Transportation Department on Wednesday announced new rules taking aim at two of the most difficult and annoying issues in air travel: obtaining refunds and encountering surprise fees late in the booking process.

“Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them — without having to ask,” said U.S. Transportation Secretary Pete Buttigieg in a statement, adding that the changes would not only save passengers “time and money,” but also prevent headaches.

The department’s new rules, Mr. Buttigieg said, will hold airlines to clear and consistent standards when they cancel, delay or substantially change flights, and require automatic refunds to be issued within weeks. They will also require them to reveal all fees before a ticket is purchased.

Airlines for America, a trade group representing the country’s largest air carriers, said in a statement that its airlines “abide by and frequently exceed” D.O.T. consumer protection regulations.

Passenger advocates welcomed the new steps.

Tomasz Pawliszyn, the chief executive of AirHelp, a Berlin-based company that assists passengers with airline claims, called it a “massive step forward and huge improvement in consumer rights and protection” that brings the United States closer to global standards in passenger rights.

Here’s what we know about the D.O.T.’s new rules, which will begin to go into effect in October.

Until now, airlines have been allowed to set their own definition for a “significant” delay and compensation has varied by carrier. Now, according to the D.O.T., there will be one standard: when departure or arrival is delayed by three hours for domestic flights and six hours for international flights.

When things go wrong, getting compensation from an airline has often required establishing a cumbersome paper trail or spending untold hours on the phone. Under the new rules, refunds will be automatic, without passengers having to request them. Refunds will be made in full, excepting the value of any transportation already used. Airlines and ticket agents must provide refunds in the original form of payment, whether by cash, credit card or airline miles. Refunds are due within seven days for credit card purchases and within 20 days for other payments.

The list of significant changes for which passengers can get their money back also includes: departure or arrival from an airport different from the one booked; connections at different airports or flights on planes that are less accessible to a person with a disability; an increase in the number of scheduled connections. Also, passengers who pay for services like Wi-Fi or seat selection that are then unavailable will be refunded any fees.

The vouchers or credits will be transferable and can be used for at least five years after the date they were issued.

Airlines and ticket agents are now required to display any extra fees for things like checking bags or seat selection clearly and individually before a ticket purchase. They will also need to outline the airline’s policies on baggage, cancellations and changing flights before a customer purchases a ticket.

For example, automatic refunds must be instituted by the airlines within six months. But carriers have a year before they’re required to issue travel vouchers and credits for passengers advised by a medical professional not to fly.

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