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New DOT rules require automatic refunds for flight cancellations and significant delays

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New DOT rules require automatic refunds for flight cancellations and significant delays
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Eric Rosen Director of travel content | The Points Guy

As of October 28, U.S. travelers are entitled to compensation from airlines for canceled or significantly delayed flights due to new rules from the U.S. Department of Transportation. These regulations, developed under the Biden administration and announced in April, are now fully in effect.

The final rules mandate that airlines automatically refund passengers when their flights are canceled or significantly changed, checked bags are significantly delayed, or when airlines fail to provide extra services as purchased. However, these rules do not apply if travelers accept an airline's offer to rebook them on a later flight after a cancellation or significant delay. They also exclude compensation for delays and cancellations beyond the airline's control, though such legislation has been proposed.

The Department of Transportation (DOT) defines "significant changes" as instances where a domestic itinerary's departure or arrival is delayed by three or more hours, an international flight's departure or arrival is delayed by six or more hours, an itinerary is moved up by over six hours, a traveler's origin or destination is altered, additional connections are added, a traveler is downgraded to a lower class of service, travelers with disabilities face different connecting airports than originally planned, or they must fly on less accessible aircraft than initially scheduled.

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Travelers can receive refunds for checked bag fees if luggage is not delivered within 12 hours of a domestic flight's arrival at the gate or within 15 to 30 hours for international arrivals. To claim compensation for significantly delayed baggage, passengers must file a mishandled baggage report with the airline at their arrival airport.

Passengers are also entitled to refunds for disrupted inflight services like Wi-Fi, seat selection, or entertainment. According to the DOT, refunds should be issued within seven business days for credit card purchases and 20 days for other payment methods. Airlines must inform affected travelers about their right to refunds for ticket expenses and any extra service fees.

Airlines cannot offer vouchers or credits instead of refunds unless passengers choose these alternatives. In cases where customers cannot travel due to contagious illness restrictions related to traveling to, from, or within the U.S., airlines must provide travel credits or vouchers valid for at least five years upon documentation proof.

"We support the automatic refund rule and are happy to accommodate customers with a refund when they choose not to be rebooked," said a spokesperson for Airlines for America.

Additional rules requiring airlines to display ancillary charges upfront remain pending legal action from airlines.

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