New Rules Require Automatic Cash Refunds For Delayed, Canceled Flights

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The Biden administration has announced rules that will require airlines to issue automatic cash refunds for any domestic flight that is canceled or delayed more than three hours, regardless of reason, including weather. Passengers can waive the refund and get rebooked on another flight if they choose. The new rules also include cash compensation for delayed and lost luggage. “No more defaulting to vouchers or credits,” Secretary of Transportation Pete Buttigieg said while announcing the new measures at Reagan National Airport.

Although the status quo will remain through the busy summer travel season, they will be in force for Thanksgiving. The six-month delay will allow the airlines to adjust their accounting systems to implement the changes. Airlines have not yet responded formally to the news, but social media comments note that up to half of airline delays are attributed to ATC delays. There are also predictions the move will drive up ticket prices.

Russ Niles
Russ Niles is Editor-in-Chief of AVweb. He has been a pilot for 30 years and joined AVweb 22 years ago. He and his wife Marni live in southern British Columbia where they also operate a small winery.

40 COMMENTS

  1. Oh yeah, that’l work. You think prices are high now? Here it comes. The cannibal’s have been cut lose and they’re coming for you…😱🧉

    • You think that giving someone a voucher for a future flight and a few bucks for snacks is adequate compensation for having a flight cancelled?

      If you pay online for a product, thinking it’s available, and get a reply saying “oops, out of stock, we’ll give you a voucher for a future purchase,” would you be happy with that?

        • If you were the only one who thought so, it appears that you aren’t very good at it. Perhaps you should recognize that there is no way for readers to infer the sneer in you voice. Or use a ‘/S’ terminator instead of illegible emojis.

  2. Everything the government touches results in higher prices or lower service. Tickets prices will go up.

  3. Define “high”, tom my. Airfares depend on where you live, where you’re going, when you book, your tolerance for connections, seat pitch, time of day, luggage arriving with you, and a myriad of other variables. As they always have.

    For years, the airlines have been able to skate by with execrable “customer (dis)service” for the cost of a few (often unredeemed) vouchers and meal coupons. If the new rules cause them to rejigger their accounting to place a greater emphasis on your luggage arriving with you, I’m all for it. As for problems beyond their control, all the new rules do is require them to reimburse you _immediately_ with something you can use. If they can’t get you where & when they _contracted_ with you to do so, they owe you your money back right then, not in a voucher that won’t get you to yesterday’s wedding.

    I just did a quick check of the only major trip I make every year: to Airventure. Booking now (admittedly, three months out), I can get a flight with one connection from an airport 30 minutes from my house, to an airport 1:30 from Oshkosh for $152. That’s less than the cost of the fuel it takes to fly my C172A there and would get me there in half the time, even with a connection. It is also less than the cost of driving, when you factor in the price of the cheap hotel on the Interstate that is necessary. So no, airfares are not “high now”.

    One could argue that airfares and customer service have been driven down by competition, and the only thing that will improve the latter is a federal mandate that applies equally to all airlines, and demands a minimum standard of care for the defenseless cattle they are carrying.

    • It all comes down to what people are willing to put up with. When enough of the flying public deem it unbearable to fly, things will change. I crossed that line a long time ago. I wouldn’t even be a 121 pilot under the current conditions.

    • We have a government mandate in Canada. right now there are 71,000 outstanding claims dating back 18 months regarding passenger compensation for delays, missed flights and compensation. A government mandate is only as good as when it can be executed and fulfilled.
      Go figure!

      • And if ya don’t believe that statement … look no further than the PAFI cum EAGLE vs GAMI G100UL debacle. OR, Elon’s SpaceX or Burt Rutan’s Scaled vs NASA.

  4. As I understand it, the monetary refunds have always been available to passengers. But they had to ask for it. If you didn’t know (as apparently most commenters above) then you’d miss out if your flight was significantly delayed or cancelled. And the airlines would typically not tell you about the ‘cash’ refund option. Instead, they’d offer vouchers (that expire) for a future flight somewhere else, or some airlines miles on your account. And once the passenger accepted those token options they have given up their right to the cash.

    This new rule just makes those existing payments automatic. And it’s not always “cash”, it’s however you paid for the ticket. If you paid with a credit card, then the money appears on your credit card. Same if you paid with airline miles – you’d get the miles back plus the additional amount mandated by the existing law.

    • You are correct, in theory. Having tried that once, back when i was traveling for work, I found that the process was excruciating, especially when it wasn’t for a direct flight. Having a “refund policy” that involved retrieving my refund from “a mayonnaise jar on Funk&Wagnall’s porch” doesn’t count.

      • And that’s the point of the new law – unlike before, the refund is now automatic. No more fighting airline bureaucracy to get what is owed.

  5. As an Airline Captain I would suggest the devil is in the details here. As I guess many are already saying many of my companies delays originate in NYC where the center there has been understaffed for years. Ground delay programs for a few clouds or one thunderstorm 100 miles away have led to hours long delays in the past couple of years thanks to Mayor Pete’s incompetence. Everyone should remember that to be profitable the airline needs to keep the aircraft moving, a delay at NYC will lead to delays in several of the following flights.

    Also, are the Captains going to get pressure to go when the weather says they shouldn’t? Will they simply start the flight knowing they will be diverting to another airport because the weather was such that it was highly unlikely they would be able to complete the flight as planned.

    I agree the system isn’t perfect but blaming airlines for weather and ATC staffing delays that reverberate through the system is just another in a long list of bad government ideas.

    • Just for added info about NYC. About 18 months ago I was taxiing out at LaGuardia without a cloud in the sky and LGA goes into a ground stop for 20 minutes. Asking why we were told weather. I looked at NexRad and there was one thunderstorm over Allentown, PA. When they started departures again they had 8 minute separation for all west departures, I was number 12 in that line. We took off 2.5 hours after pushing back from the gate. That aircraft was late for every leg the rest of that day. That is only one example.

      • The worst part of that story, according to Mayor Pete the flight sitting on the ground wasn’t late since we departed the gate on time. It was every flight after that the Government considered late and I’m sure the airline was blamed.

      • About three years ago, I was once in KHVN trying to go south to Florida. There was a line of thunderstorms west of NYC, over 100 miles away. I called the tower for clearance and they said we had to wait for weather. For two hours, New York Center would not issue a clearance to a medevac flight, which wasn’t even going near the storms.

  6. More government meddling into what used to be a free market will only make matters worse. But woke airlines and woke airport authorities are equally to blame. I used to fly commercially nearly every week for business. I do not miss it one bit.

    • As did I, Kent. Every week a new city/hotel/rental-car/office, arriving Sunday night, trying to get home Friday night. Logged more miles in a far less comfortable seat than in my Cessna’s. Nor do I miss it, either.

      But your monochromatic view of the world (“free market” vs. “woke”) makes you a less than reliable commentator. “Government meddling” is exactly what keeps us from becoming an oligarchy. It’s what prevents the Musk’s, Bezos’, Ellison’s, Buffet’s, et alia, from being able to use their wealth to take over our democratically-elected government. (Not that a once-wealthy New Yorker didn’t give it a good try.)

      The US government doesn’t automatically “meddle” in free markets. I look (with a certain alarm) at all the (non-existent) government “meddling” in AI development. Scarily, it seems to still be trying to figure out how to spell it. Government “meddling” is almost always ex-post-facto some harm being done to the people. If that makes them “woke” in your limited view of reality, then they are very heavy sleepers.

  7. The comments seem to mostly consist of blaming the “other guys.” And of course, the government (which is really just another large organization). What most folks fail to realize is that without an authority saying “no, you cannot take your sister’s toy”, kids will try to get away with whatever. Automotive safety wouldn’t be where it is unless the government at some point said, “Uh no, ya gotta put in safety belts and wear them!” and “Ya wanna sell cars, ya gotta put in some sort of device to control the lethal exhaust.”
    Do we really want the “bean counters” to run Boeing?

  8. But….and me having seen the FAA side of delays from all perspectives, you sitting on the ground in sunny skies cannot see way up the road the point where the impact (bad word here) will occur, or the many other flows headed in that direction. I guarantee the folks making the traffic management decisions, whether they are at the traffic management positions at the Centers or the big traffic managing office in DC, they are absolutely squeezing every possible aircraft into every possible piece of airspace depending on the circumstances. They are very skilled at what they do and are not influenced by politics or other pressures other than the constant coordination with the airlines. Trust me (I’m from the FAA), these folks in the traffic management trenches are very skilled and dedicated to keep things moving just as much as possible. Schedule a tour to the traffic management headquarters sometime. And the airlines are each directly involved in theses issues and decisions, although each fighting for their piece of the sky as decisions are made.

    • Didn’t say they don’t work hard, but when there are not enough to cover the airspace it leads to inexplainable delays. In a system such as ours a single thunderstorm no more than 30 miles wide and a hundred miles away shouldn’t be a huge issue, only when it’s sitting over the airport or approach. Atlanta deals with thunderstorms with minimal delays when they are all around the airport, in NYC a couple of clouds cause major issues.

  9. Okay, let’s go to the sublime. Add fees for passengers if they wear their pajamas, flip flops, clip toe nails in their seats, put their feet on the arm rest of the pax in front of them ….. and, and, and! In essence, let the market decide, not government. Pothole Pete couldn’t find his back side with both hands. Vote wisely in November.

  10. Exactly how does refunding customers for contracted services not rendered, affect your (and your flight department’s) go/no-go decisions? The bean-counters, sure, but one less SuperBowl ad should about cover it.

    As this change would apply to all airlines, how would this put your company at a competitive disadvantage? Until it takes effect, an airline ticket (regardless the livery) is barely more than a lottery ticket, an unhedged bet that you and your luggage will arrive at a contracted place and time.

    As for NY center and its issues (which long predate “Mayor Pete”) perhaps ALPA and the other alphabets should make a concerted push to properly fund the ATO.

    Unless everyone is just waiting for some AI to come along and make them all obsolete.

    • As far as ALPA goes it’s the biggest waste of my money ever. They don’t represent me, they represent themselves.

      And I don’t think I said anything about my company being affected any more than other airlines, I just questioned the wisdom of putting airlines and the front line Captains in a position where there might be undue pressure to at least attempt a flight into bad weather because a diversion is neither a delay or a cancellation. Safety does and should always come first.

      As my favorite President said, “I’m from the government and I’m here to help” are the scariest words in the English language.

      Maintenance issues are a different story.

    • “Exactly how does refunding customers for contracted services not rendered, affect your (and your flight department’s) go/no-go decisions?”

      It affects everyone, because the unintended consequences of this policy will likely incentivize the airlines to never cancel flights to avoid the refunds. The passengers, crews, maintenance will be waiting around all day because the company won’t cancel the flight.

      Plus the airline can just say, hey show up tomorrow, we didn’t cancel the flight, we just rescheduled it for tomorrow – No Refund. You think the airlines are stupid? They’ll find a work around.

      Pot Hole Pete – pure gold!

  11. I see valid reasons for a lot of issues, but weather? I see this announcement in the future.

    “We are now ready to board Flight XYZ to Kansas. We were were going to cancel the flight because of level 5 thunderstorms and tornadoes, but the refunds prevent us from doing that. So you can board now. Our drone pilots should get you there on time”!

  12. I’m guessing that nobody here has ever breathed “free market” air, drank “free market” water or eaten “free market” food. Certainly, none of you have worked a “free market” job, driven on a “free market” highway, or had surgery in a “free market” hospital. I am confident that if you did, you wouldn’t worship at the unregulated free market alter for long.

    Also, as soon as blame gets put on “mayor Pete” (or on “woke”, or anything other than the actual policy in question) for any problem here, all it shows that the commenter is motivated by a need to declare their tribal allegiance rather than their interest in discussing the actual issue at hand.

    And, for the record, yes, airlines that gladly take my money for future transportation services should refund my money if they cannot deliver on the service they took my money for in the first place. Sure, they can keep ticket prices down by holding on to my money – so what? A shopkeeper can keep prices down by picking the pockets of customers while they are shopping. I doubt many of us would shop in such a store.

  13. So pointing at & scolding other commenters for commenting is somehow “discussing the issue at hand”. Such behavior demonstrates intolerance. “How dare someone think differently from me? And then express it!!! I better shut them down with my keyboard power!”
    Though it is entertaining to point & laugh at the Komment Kops who seem to be drawn to AvWeb’s articles, then attempt to control others.

    • So, let me get this right. You think my “intolerance” of some comment is intolerable. And, so, you attempt to control me by calling me a “Komment Kop” (how clever). Isn’t that the very thing you are complaining about?

      More succinctly, your “intolerance” of my comment is fine. My intolerance of some other comment is not fine. Your textbook example of a double standard is noted.

      My original comment stands. You have simply noted that you don’t like my point of view. Fine, I didn’t expect you to.

  14. Can only lead to higher prices and less flying for the less well off maybe. Is that the plan?

  15. I don’t see this going anywhere since a passenger’s cash refund for a last-minute cancelled flight will be a small fraction of what it would cost to rebook on another airline with available flights to get to your destination anywhere near the time you planned to get there.

    I endured a 17 hr. delay due to a mechanical issue cancellation this week. My ticket for that leg of the trip amounted to about $200. Looking into rebooking to get me home same day, the cost was over $1,300.

  16. Air Line customer agent to customer. Sorry for the delay sir. Here is the hundred bucks in cash for the discounted ticket you bought three weeks ago to save a buck. Oh, you now want another ticket to go this afternoon or tomorrow? That will be 500 bucks please.

  17. Well, articles like this do turn out the comments though some seem to trend hyperbolic or emotional, not factual.

    Some seem to think this will increase airline prices…so? Flying is not a right, it is a privilege you pay for and if you cannot afford a ticket, I guess you are not flying and need to rethink travel plans or locations. As some also mentioned, purchasing a ticket *is* a contract for a service so if that service is not provided, well the customer should have the choice to get their money back. Lost by some is that statement that customer can _refuse_ the refund, which would tell me they can work out a different contract.

    I find some sad humor in the comments that think the “Government” is bad when every single day or your life is protected by that bad government. Don’t like regulations? You must then want to eat tainted food, drive in unsafe cars (or planes aka Boeing), live in anarchy. Keep in mind that the Government is *We The People* so vote and change it but also accept if you don’t get what you want.

    One thing I lean with in regards to the ATC shortage problem causing delays is two fold, (1) we don’t pay ATC controllers enough starting pay to get people interested. (2) People who bitch about paying taxes and bitch about ATC shortages seem to not get the two are involved. Don’t want to pay taxes, then less money for ATC controllers, less money for FAA improvements. Most of us do not enjoy the tax reductions given to the wealthy, but we sure feel the effects so next time y’all start to bitch and whine about ATC shortages and old equipment problems causing delays, why not bitch and whine to your government representative to put more money into the FAA, not less.

    I’m not comfortable flying commercial much any more, but it is not as much the airlines squeezing every penny from me for mediocre service, it is the attitude of the flying public, the sense of entitlement that causes a plane to divert because some Karen or Ken could not figure out how to sit quiet for a few hours. Good for the Transportation Secretary for holding airlines accountable for bad business practices.

  18. Customer service: Lets see, $450.00 for airline ticket,baggage and taxes and an additional non refundable $625.00 airline insurance surcharge for cancellation, that will be $1075.00…..would you like the complementary big guy pretzels or peanuts for the flight?

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