Cash or credit card refunds now required if flights are canceled or significantly delayed

Starting this week, airline passengers who have flights canceled or significantly changed will receive automatic cash or credit card refunds instead of travel credits.

The new federal rule makes it easy for passengers to get refunds when airlines cancel or dramatically change their flights, don’t promptly deliver checked bags or fail to provide extra in-flight services they purchased, according to the U.S. Department of Transportation (DOT).

“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg in a statement. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”

Before the new rule, airlines set their own standards for what kind of flight changes warranted a refund. Because each airline had its own policy, passengers often were not given their money back during spikes in flight cancellations or changes, according to the DOT.

The new rule defines a “significant change” as flight departure or arrival times that are changed by more than three hours domestically and six hours internationally; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible to a person with a disability.

Also, passengers who file a mishandled baggage report will be given a refund of their checked bag fee if bags are not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight, the DOT says.

Passengers will also be entitled to a refund for the fee they paid for an extra service — such as Wi-Fi, seat selection or inflight entertainment — if an airline fails to provide the service.

The new regulations follow a “significant number of complaints” against airlines and ticket agents for refusing to provide a refund or for delaying processing of refunds during and after the pandemic. At the height of the pandemic in 2020, refund complaints peaked at 87% of all air travel service complaints received by the DOT.