Understanding the New Airline Fee Rules

Flight disruptions are stressful, and no one likes them. A recent poll of 2,000 US adults who recently traveled found that almost half (46%) experienced problems from missing luggage to uncommunicated reservation changes.

Just to confirm that delays and cancellations are a continual problem for travelers, I took this screenshot of the live flight cancellations reported on FlightAware yesterday:

For years, and especially during the pandemic, travelers have struggled to get refunds for flights disrupted due to cancellations, delays, or schedule changes.

New US Department of Transportation rules went into effect last month, and they’re supposed to make it easier for travelers to get their money back when airlines fail to deliver them to their destination.

Here’s what you need to know about these new rules and what they mean for your next trip.

Understanding the new refund rules

Briefly, here’s what the new rules say for travelers:

1. You will get an automatic refund to the original form of payment if your flight is canceled – no paperwork or complicated procedures.
2. Your refund will be received within seven business days for credit card purchases and 20 calendar days for any other payment methods.
3. You get the full amount you paid back, including fees, taxes, and other airline-imposed fees.

The most important takeaway is that you get all your money back rather than a flight credit or voucher, etc., regardless of the reason for the cancellation. That’s important because, in the past, airlines wiggled out of refunds for a number of reasons.

Also, airlines are required to provide live customer service communication channels 24/7 whether through live chat or phone support.

Pro tip: Try the live chat! I’ve used it several times in the past year, and it’s improved significantly.

What qualifies for an automatic flight refund

The major victory for travelers is that the new rules increase transparency and accountability within the airline industry, ensuring passengers receive the compensation they are entitled to when the airline fails to deliver.

These are the circumstances that qualify for an automatic refund:

• If your flight is canceled and you decline alternative transportation or travel credits, you get a full refund.
• If your flight is significantly delayed, or there is a change in departure or arrival airport, an increase in connections, a downgrade in the service class, or accessibility issues for passengers with disabilities.

Important: The definition of ‘significantly delayed’ is now formally defined for all airlines: a minimum of 3 hours for domestic flights and 6 hours for international.

Also important: These rules apply for any reason, including those formerly considered out of the airlines’ control like weather.

Additional refunds for baggage and services

The rule also includes some extra benefits, which travelers have been frustrated with for years:

1. You get your baggage fee back if your checked bag is delayed more than 12 hours, and
2. You get a refund for in-flight services that were not provided, including Wi-Fi, selected seats, or inflight entertainment.

These may not be big refunds but at least you get your money back for the inconvenience.

Steps to follow when your flight is canceled (the new version)

So, you’re standing at the airport or at home looking at a screen that says your flight is canceled – what do you do?

Decide if you want a full refund or a new flight (these are mutually exclusive choices).

1. If you want a refund, don’t wait in line at the airport or call the customer service line. Go home and make other travel arrangements, your refund will be automatically issued.
2. If you want a new flight, you will help yourself by doing these steps:
   • Use Google Flights to find alternative options while you wait to talk with the gate agent or a customer service rep.
   • If you have the airline app and a frequent flier number, call customer service through the app for quicker results. Be sure to have your ticket and flight information handy for reference.

Important: These steps apply even if you have a nonrefundable ticket! 

Tip: If you still want to travel, booking a new flight is often better than taking a refund and trying to book a last-minute ticket. Last-minute flights are typically very expensive, and you do not want a refund for $300 if a flight the next day will cost you $750.

The Bottom Line

The new rules are good improvements for travelers. After all, we’re all used to getting a refund when we return things we buy online these days. 

While the new ruling ensures you’ll get your money back, it can’t fix the situation when you really need to get somewhere. If you have to get from point A to point B on a specific day and your flight is canceled, you can:

A – Accept their alternative travel arrangements or
B – Get your money back and figure out how to get there another way.

Of course, this isn’t new. It’s always been this way.

The potential upside is that if there is a significant weather event, like a hurricane, for example, and you know your flight will be affected, you can start making alternative travel arrangements earlier and just wait for your flight to be canceled.

How to know ahead of time if your flight will be delayed or canceled

First, you must make sure that the airline has your correct contact information. Many passengers show up at the airport without knowing ahead of time their flight is delayed or canceled simply because they missed the airline’s message. You can help yourself out on this one.

Second, you must make sure to download the airline’s app to your phone. This is the primary way that passengers receive messages from the airlines although I have sometimes been disappointed by receiving messages later than was useful to me.

Pro tip: I always use FlightAware to check the status of my flight, in addition to checking my email and the airline app. I don’t know why, but sometimes FlightAware has more current information.

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