If you are a frequent flyer like us or just an occasional flyer, you likely have experienced a flight cancellation or delay. Not only is it frustrating, but jumping through all the hoops just to get a refund or at least some gesture of compassion from an airline is a total nightmare … until now!

Effective 28 October 2024, the United States Department of Transportation now requires any airline flying to, from, or within the United States to give automatic refunds to passengers if their flight is canceled or significantly changed. This rule applies not only to U.S. domestic carriers, but all foreign carriers as well, meaning you will automatically receive a cash refund even if you are flying into or out of the United States on KLM, Air France, British Airways or any other foreign carrier.

“Significant Change” Defined

The new rule applies anytime your flight is canceled, significantly delayed, or if you experience a “significant change” regardless of the reason (including any “uncontrollable factors” such as weather). If the airline is able to book you on another flight or offers you a travel voucher and you accept it, then the new rule will not apply. BUT, if you reject the airline’s offer; i.e., do not accept a later flight or do not accept the airline’s travel voucher, then you will be entitled to the automatic refund.

For the first time, the Department of Transportation also defined what it considers to be a “significant change” whereas prior to the new rule, it was up to the airlines to define what they considered a significant change to be. You are now entitled to a full refund if:

• A change to your departure or arriveal time is more than 3 hours if flying within the U.S. or 6 hours if you are flying internationally;
• If your departure or arrival airport is changed;
• If the airline increases the number of connections you must make;
• If you are downgraded to a lower class of service (for example, if you paid for premium comfort and were downgraded to economy or if the airline changed planes and the service you paid for is no longer available); or
• Connections are changed to different airports or on a different plane that are less accessible or accommodating to a person with a disability.

Refunds For In-Flight Services

If you paid for any in-flight services such as in-flight entertainment or in-flight W-Fi and the service doesn’t work, you are entitled to a refund of the purchase price for that service. Likewise, if you paid extra for a seat selection and it is not available due to a change in aircraft or other reason, the price you paid for the seat selection must be refunded.

Refunds If You Are Sick

If you contract a “serious communicable disease” such as COVID and can no longer travel, you will be entitled to a travel voucher or airline credit valid for at least five years (but not cash compensation). The airline, however, may require that you submit additional documentation.

Additionally, if a country or a licensed treating medical professional advises you not to travel to, from, or within the United States, (even if the U.S. government has not declared a public health emergency),you will be entitled to a travel voucher or airline credit valid for at least five years.

Refunds For Delayed Luggage

Who hasn’t experienced a delay in checked luggage or lost luggage? If you file a mishandled baggage report with the airline, you will now receive a full refund of any baggage fees you paid if your luggage is not delivered to you within 12 hours of your domestic flight or within 15 to 30 hours of your international flight depending on the flight’s length.

How and When Refunds Must Be Issued

Under the new ruling, airlines must automatically issue the refund “without passengers having to explicitly request them or jump through hoops”. The refund must also be made promptly. If you paid by credit card, the refund must be given within 7 business days. If you paid with another form of payment, the refund must be made within 20 calendar days. Additionally, your refund must equal the full amount you paid, including taxes and fees (but minus any portion of the ticket you already used).

What To Do If The Airline Does Not Follow The New Rules

If you are denied compensation of if you believe an airline is not following the new rules, you should file a consumer complaint with the U.S. Department of Transportation.

Bottom Line

According to U.S. Transportation Secretary Pete Buttigieg, the new ruling should help streamline the refund process. Hopefully he’s right, but time will tell. Just remember to know your rights when flying and don’t be intimidated by a gate agent or customer service agent when your flight is cancelled or delayed.

If you do experience a flight delay, why not do what we do by relaxing in a first-class lounge with a Priority Pass membership? Sit down, stretch out, enjoy a pre-flight bite and a drink, including free alcohol at more than 1,500 lounges worldwide!