New Federal Rule Requires Refunds for Canceled and Delayed Flights

A plane takes off at Austin-Bergstrom International Airport (photo by John Anderson)

As Austinites fly home after Thanksgiving travels, airlines are operating under new refund rules. In some cases, passengers on canceled or delayed flights may receive refunds that wouldn’t have been available before last month, and in others, they may lose out on previously offered reimbursements.

Many progressive gains have been made during the Biden administration that may soon be rolled back under Trump. The airline industry in particular has encountered increased regulations as flight attendants’ unions have advocated for better labor standards and the Department of Transportation under Secretary Pete Buttigieg has tried to improve the customer experience. On Oct. 28, a new rule went into effect that offers customers full automatic refunds for canceled or significantly delayed flights.

Before the rule, the definition of “significantly delayed” varied per airline. DOT’s new universal definition is a change of departure or arrival times that amounts to more than three hours for domestic flights or six hours for international flights; downgrades to a lower class of service or a less accessible service for people with a disability; or the addition of extra stops. Also, the refund must now arrive “promptly,” aka within seven business days. And airlines can’t sneakily steer customers toward vouchers or other offers first – they have to “proactively inform” customers of the right to a refund. If the customer chooses to rebook, however, they are no longer eligible.

These changes were meant to benefit the customer, but DOT has inadvertently voided some previously refundable situations, since each airline had their own definition of a “significant delay.” For example, Delta, JetBlue, and United were all at two hours, but now have changed to three hours for domestic and six hours for international, per the DOT standard.

There are also variations in how airlines interpret the vague parts of the rule: For example, an extra to regular legroom downgrade constitutes a cabin downgrade and a refund for Delta and United – but not American. And since the DOT has made a flight number change constitute a cancellation, an automatic refund would be applied and the flight canceled unless the customer tells the airline they still want to take the flight – American at least confirmed that they would notify the customer by email first.

This confusion could worsen an already low-morale working environment for flight attendants, depending on whether airlines follow the “proactive informing” part of the rule. An American Airlines flight attendant based in Austin told the Chronicle, “When this kind of thing happens, we’re often left to be the bearers of bad news. People naturally get pissed off, and we do not have answers.”

Still, the rule should eliminate some sneaky loopholes airlines were taking advantage of before, making life easier for both customers and flight attendants. The American flight attendant said that before the rule, “if your plane broke down, generally, the flight would cancel – or it would just delay until seven o’clock the next morning, and everybody was just kind of left to figure it out for themselves.”

Now, if they delay till 7am, at least you’ll be entitled to full compensation within a week without having to “navigate a patchwork of cumbersome processes,” says DOT.