The Biden Administration announced Wednesday new federal rules mandating airlines to provide automatic refunds for delayed or canceled flights, a move aimed at bolstering consumer rights and simplifying refund processes.

The rules, announced Wednesday by the US. Department of Transportation (DOT), are set to streamline the refund experience for passengers and enhance transparency regarding additional fees.

Enhanced Passenger Protections

Under the finalized rule, passengers are entitled to automatic cash refunds in specific scenarios, ensuring they receive compensation promptly. 

"Passengers deserve to get their money back when an airline owes them - without headaches or haggling," US Transportation Secretary Pete Buttigieg emphasized. "Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers." 

The rule specifies that refunds must be provided in the following circumstances:

Canceled or Significantly Changed Flights: Passengers are eligible for refunds if their flights are canceled or significantly changed, defined as departure or arrival times exceeding 3 hours domestically or 6 hours internationally, among other criteria.

Significantly Delayed Baggage Return: Passengers who report mishandled baggage can receive a refund for their checked bag fee if their bag is not delivered within 12 hours for domestic flights or within 15-30 hours for international flights, depending on the flight's duration.

Extra Services Not Provided: Passengers can claim refunds for fees paid for services like Wi-Fi or seat selection if the airline fails to deliver these services.

The new rules mandate airlines to issue refunds automatically without passengers having to request them explicitly. 

Refunds must be processed promptly within seven business days for credit card purchases and 20 calendar days for other payment methods.

DOT's new rules aim to simplify and speed the process for passengers to receive owed refunds easily. 

Previously, consumers faced complex procedures, such as navigating airline websites, filling out additional forms, or waiting on hold for hours. 

Some airlines defaulted to issuing travel credits instead of cash refunds, limiting passengers' ability to rebook on other airlines after flight changes or cancellations without going through a tedious process.

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Transparent Fee Disclosures

In addition to refund regulations, the DOT has also emphasized transparency in fee disclosures. Airlines are now required to list upfront fees for services like carry-on bags and flight changes. 

This measure aims to empower consumers with comprehensive information before booking flights, potentially saving millions annually.

Airlines for America, representing major carriers, affirmed their commitment to complying with DOT regulations. 

Most rules will take effect in about six months, while full implementation is expected within a year.

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