Today, the U.S. Department of Transportation (DOT) announced that it will roll out new rules requiring airlines to automatically give travelers cash refunds for canceled and significantly delayed flights.
Airlines must issue these refunds within seven days of a canceled or delayed flight. Though they will still be allowed to offer another flight or travel credit instead, customers can reject the offer in favor of a refund, according to the Associated Press.
Currently, airlines can choose how long a delay must last before issuing refunds. Under the new ruling, the DOT has defined the significant delays that would trigger refunds as lasting at least three hours for domestic flights and six hours for international flights.
The AP reports that required refunds will also apply to checked-bad fees—if luggage is not delivered within 12 hours of arrival for domestic flights and 15 to 30 hours for international trips, as well as fees for things like seat selection and in-flight WiFi if an airline fails to deliver these add-ons.
Airlines will have six months to comply with the new ruling, according to ABC News.
According to Airlines for America, the predominant trade group for large U.S. airlines, refund complaints to the DOT have fallen since mid-2020. The group told the AP that the 11 largest U.S. airlines distributed $43 billion in customer refunds from 2020 through 2023.
However, Southwest Airlines notably received a record $140 million fine for its massive number of canceled flights during the 2022 holiday travel season, which stranded travelers in airports up and down the country.
The new DOT ruling will also force airlines to inform travelers that they do not have to pay extra to guarantee a seat, though airlines are still permitted to charge for specific seat selections. Per the AP, this rule will take effect over the next two years, and the DOT anticipates that it will save consumers over $500 million each year.
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