What were the previous rules?
Previously in the US, and still in many other countries, airlines made the rules regarding when refunds were warranted and how they would be paid.
This airline-by-airline approach was challenging for passengers, DOT stated. The department had also received complaints that airlines changed their policies during periods of increased delays and cancellations.
Read More: Flight delayed or cancelled? Experts share some advice
How is this relevant to New Zealanders?
The rules apply to any airline operating within the US. This means American carriers such as United Airlines or Delta will be held to account but airlines that fly to and from the US, such as Air New Zealand or Qantas are also bound by the rules.
It also doesn’t matter where a traveller is from when it comes to claiming refunds. What matters is whether you’re travelling to, from or around the US, which means Kiwi travellers in the States are covered.
What do airlines have to refund you for?
The DOT has stepped out three situations that warrant a refund; 1) your flights are cancelled or significantly changed 2) your luggage is delayed or 3) you aren’t provided extra services you purchased.
To make things even easier for travellers, DOT has detailed exactly what terms such as “significantly changed”, “delayed” and “extra services” mean.
Flights are cancelled or significantly changed
You can be refunded your flight ticket if:
- Your flight has been cancelled
- Your flight’s departure or arrival is delayed more than three hours domestically or six hours internationally
- Connections are added
- The airport you fly to is changed
- You are downgraded to a lower class of service
- If you are disabled and the connecting airport or plane changes to something less accommodating
You can only claim a refund if you do not accept an airline’s offer of alternative travel (for example, a different flight) or flight credit.
Baggage is significantly delayed
Passengers can have baggage fees refunded if they file a mishandled baggage report and their bag is not delivered within 12 hours of a domestic flight arriving at the gate or 15-30 hours of an international flight, depending on the flight length.
Extra services are not provided
If you splashed out and paid extra for seat selection, inflight entertainment or Wifi, and the airline can’t provide it, it must refund the fee charged.
Read More: What to do if a flight is cancelled or delayed by bad weather
How do I get the refund?
In the past, even if passengers did fit an airline’s refund criteria, they often never saw the money due to cumbersome request processes, lack of communication or offers of vouchers instead of money, DOT stated.
“Consumers have to navigate a patchwork of cumbersome processes to request and receive a refund — searching through airline websites to figure out how to make the request, filling out extra “digital paperwork”, or at times waiting for hours on the phone,” DOT stated.
Even if they did endure the process, passengers often received a default travel credit or voucher, meaning they couldn’t rebook travel with another airline.
This won’t be the case under the new rule, which explicitly states how airlines must refund passengers; automatically, promptly, with cash or the original form of payment and to the full amount.
Airlines and ticket agents must issue refunds within seven business days of refunds being due if paid by credit card and 20 calendar days for other forms of payment.
How much will I be refunded?
As for amounts, the rule states airlines and ticket agents must provide “full refunds of the ticket purchase price, minus the value of any portion of transportation already used”. These refunds must include any taxes or fees imposed by the airline or government, even if they aren’t refundable to the airline.
Read More: Cancelled flight? Here’s how much money you can ask for in NZ
Will my refund be a voucher or points?
Short answer? No!
Airlines have faced consumer backlash for avoiding cash refunds by offering credits or vouchers that can only be used with that carrier and expire.
Fortunately, DOT has stated the refunds must be in cash or the form the traveller paid, such as credit card or loyalty points. Vouchers, points or other compensation is not allowed unless the passenger approves.
There is one instance where airlines can offer vouchers or credit.
Suppose a traveller is “restricted by a government or advised by a medical professional not to travel to, from, or within the United States due to a serious communicable disease”. In that case, airlines must reimburse travellers, but this can be through travel credits or vouchers.
You may need to provide evidence to support the request but if approved the airlines must offer transferrable credits with a five-year validity.
Do I need to do anything to get my refund?
A traveller doesn’t need to request a refund either as airlines must automatically issue it.
“Airlines must automatically issue refunds without passengers having to explicitly request them or jump through hoops,” DOT states.
If you aren’t across your rights to a refund, don’t worry, the rule also states airlines must “provide prompt notifications” of travellers of what they can claim a refund for if a disruption happens.
Why the new rules?
During and after the pandemic, DOT said it received a “significant number of complaints” relating to airlines and ticket agents refusing to provide refunds or delaying the process.
In 2020, 87 per cent of all air travel service complaints sent to DOT were related to refunds and continue to make up a “substantial share” of complaints.
The new policy comes into effect from the end of October 2024.
