Airlines are obligated to refund passengers for canceled and delayed flights

Good news for airline travelers: The Department of Transportation announced Wednesday that it will roll out new rules that will require airlines to automatically refund passengers cash for canceled and significantly delayed flights.

“This is a great day for America’s aviation public,” Transportation Secretary Pete Buttigieg said at a news conference Wednesday morning. Buttigieg said the new rules — which require immediate refunds — are the largest expansion of passenger rights in the administration's history.

Airlines can no longer specify how long a delay must last before issuing a refund. Under the new Department of Transportation rules, the covered delay will be more than three hours for domestic flights and more than six hours for international flights, the agency said.

This includes tickets purchased directly from airlines, travel agents, and third-party sites such as Expedia and Travelocity.

DOT rules state that passengers “will be entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered.”

DOT will also ask airlines for cash refunds if your bags are lost and not delivered within 12 hours.

Refunds must be issued within seven days, according to new DOT rules, and must be in cash unless the passenger chooses another form of compensation. Airlines can no longer issue refunds in the forms of vouchers or credits when consumers are entitled to cash.

Airlines will have six months to comply with the new rules.

“Passengers deserve to get their money back when the airline owes them, without any headaches or haggling,” Buttigieg said in a statement.

The Department of Transport said it is also working on rules related to family seating fees, strengthening the rights of passengers traveling in wheelchairs to safe and dignified travel, and mandating compensation and amenities in the event of flights being delayed or canceled by airlines.

Buttigieg said the Department of Transportation is also working to protect airline passengers from being surprised by hidden fees — a move he estimates will save Americans billions of dollars each year.

Ministry of Transport rules It includes that passengers will receive refunds for additional services paid and not provided, such as Wi-Fi, seat selection or in-flight entertainment.

The rules come after the agency awarded Southwest Airlines a record $140 million fine over an operational collapse during the 2022 holiday travel season.

Buttigieg said Southwest's fine sets a “new standard” for airlines and passenger rights.

“To be clear, we want the aviation sector to thrive. That's why we're putting in a lot of effort to help them survive the pandemic, and frankly, that's why we're so careful to protect passengers,” he said.

Buttigieg emphasized that refund requirements are already the standard for airlines, but the new Department of Transportation rules hold airlines accountable and make sure passengers get “the refunds they are owed.”

“Airlines are not excited about making it a higher standard,” Buttigieg said, adding that he “knows they will be able to adapt to this.”

Airlines for America, the trade association for the nation's leading airlines and passengers, told ABC News in a statement that its members “offer a range of options — including fully refundable fares.” Consumers are said to be “given the choice of refundable ticket options with the terms and conditions that best suit their needs in the first search results.”

The 11 largest U.S. airlines issued $43 billion in refunds to customers from 2020 through 2023, nearly $11 billion in refunds last year alone, the group said.