If you’ve ever had a flight canceled and struggled to get your money back, you know some of the frustration that motivated new federal regulations governing airline refunds.
New rules took effect this week requiring airlines to give automatic refunds when they cancel or significantly change a flight and customers choose not to accept their other options.
But there are some intricacies in how that will work that travelers should be aware of.
The rule is intended to allow airline customers to get their money back when the airline significantly changes their itinerary against their will — without having to go through the hassle of requesting a refund.
And for the first time, regulations define what a “significant change” is for changes to departure or arrival time — setting it at more than three hours for domestic flights and more than six hours for international flights.
But for travelers on Atlanta-based Delta Air Lines, the new three-hour standard for airlines is more lenient than Delta’s previous standard of allowing a refund when it made flight schedule changes of more than two hours.
“Prior to this rule, airlines were permitted to set their own standards for what kind of flight changes warranted a refund,” the U.S. Department of Transportation said in an April press release when the rule was announced. “As a result, refund policies differed from airline to airline, which made it difficult for passengers to know or assert their refund rights.”
Southwest Airlines, the second-largest airline in Atlanta, said it will also follow the standard of automatic refunds for flight changes of three hours or more domestically and six hours or more internationally.
Also qualifying as a significant change to trigger a refund is an increase in the number of connections, connections at airports different from those in the original reservation, a downgrade to a lower class of service or a change in aircraft that is less accessible for a person with a disability.
The rule finalized earlier this year also says passengers are entitled to a refund of fees they pay for extra services, such as in-flight Wi-Fi if an airline charges a fee and fails to provide the service. It also says passengers are entitled to a refund of baggage fees if their checked bag is not delivered within 12 hours of a domestic flight arrival.
Refund frustrations
The rule that took effect Oct. 28 codifies what travelers are entitled to when a change is made to their booking, which may be particularly helpful during major disruptions.
Early in the COVID-19 pandemic, Delta and other airlines were slow to pay refunds after canceling flights. The carriers were facing a cash crunch because of plummeting demand and were trying to hold onto money instead of refunding it — but many customers were facing cash crunches of their own after losing jobs because of the pandemic.
The DOT received tens of thousands of complaints about air travel early in the pandemic, many of them concerning refunds. By December 2021, the DOT said it would propose new airline consumer protections to address travelers’ struggles to get refunds.
Last year, Delta agreed to a settlement of a class-action lawsuit over refunds owed to customers for flights it canceled in parts of 2020 and 2021.
And this year, passengers filed a federal lawsuit against Delta alleging that the impact of the carrier’s flight cancellations after the CrowdStrike outage was “disastrous” and that Delta refused or ignored requests for refunds.
Delta declined to comment on pending litigation.
In July, after the CrowdStrike disruption, Delta told customers whose travel was disrupted by a canceled flight or significant delay that they could cancel their flights online or via the Delta app and receive an automatic refund for the unflown portion of the trip. Delta also directed customers to submit expenses through its website for “fast processing” for reimbursement.
How the new refund procedure works
Under the new rule, when a flight cancellation or significant change happens, Delta will notify customers and tell them there has been a change, give them a new departure time and notify them they are eligible for a full refund if they choose not to travel.
If customers instead find better flight times on another airline, they can decide to cancel the Delta flight and would get a full refund for the unflown portion of the trip. The refunds must be issued to the original payment method within seven business days for credit card purchases and 20 calendar days for other forms of payment.
“Delta supports and is in full compliance with new rules requiring carriers to provide an automatic refund when a flight is significantly delayed or canceled and the customer doesn’t take an alternative flight,” the airline said in a written statement.
Customers can also contact Delta to ask for other flight options. Even if a flight schedule change is less than the three-hour threshold, customers can still call to switch to a different departure time on Delta without paying a higher fare, according to the airline.
What can go wrong
Travelers should make sure they have updated contact information submitted to airlines so they can be notified when there is a flight schedule change. They should ensure that if the airline sends a notification of a flight change to customers’ contact number or email, it’s a notification they would receive even during a trip.
If a traveler gets a notification of a flight change and does not contact Delta, they can proceed with their trip and take the rescheduled flight. But if they do not show up for the rescheduled flight, 24 hours later Delta will start processing the refund. What that means is that if a traveler skips one leg of a Delta trip because a changed flight time doesn’t work, they should notify Delta in advance.
That’s particularly true if they skip an outbound flight and find another way to get to their destination but still plan to take the original return flight back home. If they don’t notify Delta of their plans, the rest of the booking would be canceled and the automatic refund processed.
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