Biden administration cracks down on flight refunds and hidden fees

The Biden administration is cracking down on some major air travel headaches. New rules from the U.S. Department of Transportation (DOT) aim to enhance the refund process and get rid of hidden fees.

The department announced on Wednesday, April 24, that it will now require airlines to give automatic cash refunds for canceled flights or flights with “significant delays.” Airlines must issue refunds within seven days for a credit card and within 20 days for other forms of payment.

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The new regulations also create a uniform standard for what constitutes a “significant delay” instead of letting airlines decide. All airlines will have to follow a single definition: When a departure or arrival is delayed by at least three hours for domestic flights and at least six hours for international flights, airlines must give a refund.

The rule also applies to refunds for checked-baggage fees if luggage is not delivered within 12 hours for domestic flights or 15-30 hours for international flights. Automatic refunds will also be applicable to fees like seat selection or an internet connection if the airline fails to provide the promised service.

A separate stipulation requires airlines and ticket agents to be more upfront about hidden fees including fees for checked bags, seat selection and canceling or changing a reservation. Airlines websites will now have to show the fees the first time the customers see a price and schedule. The department said the aim is to prevent bait-and-switch tactic that hide the true costs of flights.

According to the Department of Transportation, the new rule will save customers around $500 million dollars a year. The department will implement the changes over the next two years.

Passenger advocate groups praised the new rules. However, in response, Airlines of America stated that its airlines already “abide by and frequently exceed” DOT consumer protection regulations. Airline complaints skyrocketed during the COVID-19 pandemic, but carriers noted complaints dropped significantly over the past few years.