DOT Orders Airline Refunds, Provides Clearer Guidelines

WASHINGTON – The US Department of Transportation (DOT) has implemented a new rule from Wednesday, April 24 requiring airlines operating in the United States to offer cash refunds to passengers in the event of canceled flights.¹

This rule applies to both domestic and international flights originating within the US.

The rule also clarifies the timeframe for issuing refunds.

Airlines are now required to process cash refunds within 7 business days for credit card purchases and 20 days for cash or check payments.

While the rule offers passengers the option of a cash refund for canceled flights, it’s important to note that exceptions exist.

For example, cancellations due to “extraordinary circumstances” beyond the airline’s control, such as severe weather events or natural disasters, may not be subject to mandatory cash refunds.

This new rule also aims to standardize these policies and provide passengers with a clearer understanding of their rights when a flight is canceled.

The new regulation outlines specific scenarios where passengers are entitled to a cash refund.

These include flight cancellations initiated by the airline.

This covers cancellations due to any reason under the airline’s control, including weather, mechanical issues, or staffing shortages.

In addition if an airline makes major changes to the flight schedule, exceeding specific timeframes defined by the DOT, passengers can opt for a cash refund instead of the new itinerary.

Further in cases of overbooking, if an airline involuntarily denies boarding to a passenger, a cash refund must be offered.

Previously, airline refund policies were varied. Some airlines offered vouchers or travel credits for canceled flights, while others offered cash refunds under certain conditions.

Sources