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DOT reminds airlines about obligations on passenger refunds

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DOT reminds airlines about obligations on passenger refunds
Policy
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Secretary of the U.S. Department of Transportation (DOT), Pete Buttigieg, sent a letter yesterday to the heads of the 10 largest airlines in the country, reminding them of their obligations to provide cash refunds to passengers. The letter followed a court ruling that temporarily relieved airlines from a DOT mandate requiring clarification on ticket surcharges for baggage and schedule changes—referred to as “junk fees” by the Biden administration.

Buttigieg addressed the airlines' legal action: “The airline industry lobby is trying to tie this up with lawsuits, but we will not back down from protecting passengers. Airlines are simply wrong to argue that merely having to disclose their fees would ‘irreparably harm’ them. It’s common sense,” he said.

On the issue of refunds, Buttigieg wrote: “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.”

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A DOT press release summarized expectations that airlines “clearly and proactively” inform passengers of their right to a refund when a flight is canceled or significantly changed. Additionally, cash refunds must be dispensed automatically rather than vouchers or credits. Airlines are required to facilitate rebooking at no charge and provide meals, hotel accommodations, and/or transportation during “controllable disruptions.” If passengers choose vouchers or credits instead, these must remain valid for at least five years.

Buttigieg concluded his letter: “[We] are encouraged by the historically high levels of demand for passenger air travel being served by airlines in America today. A thriving U.S. commercial aviation sector is good for all Americans, and all of our regulatory and enforcement activities are designed to ensure that this sector thrives on the basis of excellent safety, fair and vigorous competition, and strong customer service.”

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