Airlines must now give cash refunds for long delays and bag issues

WASHINGTON — The Biden administration's new airline consumer protection rules went into effect Monday, requiring carriers to automatically issue cash refunds for things like delayed flights and to better disclose fees for baggage or canceling a reservation.

Under the new Transportation Department regulations, airlines must now provide automatic cash refunds within a few days for canceled flights and "significant" delays. A significant delay is now officially defined as lasting at least three hours for domestic flights and six hours for international ones, removing the previous system where airlines could set their own thresholds.

While airlines can still offer another flight or travel credit, consumers now have the explicit right to reject these alternatives and receive cash refunds instead.

The rules also mandate refunds of checked-bag fees if bags aren't delivered within 12 hours for domestic flights or 15 to 30 hours for international flights. Additionally, airlines must refund fees for services like seat selection or internet connection if they fail to provide them.

These regulations were developed following a surge in refund complaints during the COVID-19 pandemic, when flight cancellations peaked and many passengers were hesitant to fly.

Airlines for America, representing major U.S. carriers, has noted that refund complaints to the Transportation Department had decreased significantly since mid-2020. The group reported that the 11 largest U.S. airlines issued $43 billion in customer refunds from 2020 through 2023.

A separate rule now requires airlines and ticket agents to display fees for checked and carry-on bags and reservation changes upfront. When customers visit airline websites, these fees must be shown alongside the initial price and schedule display.

The rules also require airlines to inform passengers they have a guaranteed seat without extra charges, though carriers can still charge for specific seat selections, such as exit rows or seats near the front.

The Transportation Department estimates these new regulations will save consumers more than $500 million annually.

These regulations are part of the Biden administration's broader initiative to combat what President Biden terms "junk fees." This follows the recent announcement by Transportation Secretary Pete Buttigieg that state officials in 15 states will be authorized to help enforce federal airline consumer protection laws.

The complete implementation of these new rules will occur over the next two years.