Passengers Will Be Entitled to Refunds for U.S. Flights Delayed by 3 Hours or More Under New Proposed Regulation

The U.S. Transportation Department is proposing a requirement for airlines to refund passengers if their flight schedule experiences significant changes or if there are major alterations to their itinerary.

The proposed regulation announced on Wednesday would mandate refunds if a domestic flight's departure or arrival time shifts by three hours or more, or by at least six hours for international flights.

Refunds would also be necessary if the airline alters a passenger’s departure or arrival airport, adds additional stops to the itinerary, or causes a "significant downgrade" in the travel experience by switching to a different aircraft type.

This rule would extend to travelers with nonrefundable tickets, which are typically cheaper and popular among many leisure travelers.

The proposal follows an influx of complaints to the department from passengers whose flights were canceled or altered—along with those hesitant to fly during the pandemic's early days—who struggled to obtain refunds.

Airlines typically prefer issuing travel vouchers instead of providing cash refunds.

The department's proposal would mandate that airlines and ticket agents offer vouchers that do not expire for passengers advised against traveling during a pandemic for health reasons or due to closed borders.

This proposal will undergo a public-comment period and is expected to encounter resistance from airlines. The trade association, Airlines for America, has not yet responded.

At present, airlines are obligated to refund passengers whose flights are canceled or significantly altered, but there has been no official definition of what constitutes a cancellation or significant change. Consequently, airlines have contested the Transportation Department's authority to enforce refunds.

"When Americans purchase an airline ticket, they should arrive at their destination safely, reliably, and affordably," stated Transportation Secretary Pete Buttigieg. "This proposed rule aims to safeguard travelers' rights and ensure they receive the prompt refunds they are entitled to from airlines."

Consumer complaints submitted to the department surged nearly seven times in 2020 compared to the previous year, with 87 percent focused on refund issues.

The department will accept public comments on the proposal for a duration of 90 days. An advisory group that includes consumer advocates has scheduled an online meeting to discuss the rule on August 22.