The Biden Administration has been pressuring the airline industry for years to offer more protections for U.S.-based travelers. Some significant changes are finally being put down in law.
The U.S. Department of Transportation on Wednesday unveiled two new rules that clearly define when travelers are entitled to a refund after flights are delayed or canceled while also forcing airlines disclose additional fees far earlier in the booking process in a bid to increase transparency in airfare pricing.
Under the new rules, airlines will be required to offer travelers a refund (not just a voucher or a travel credit) when canceling or significantly delaying flights – and process them sooner, too. Airlines and third-party booking sites will also be required to list the additional cost of luggage or cancellation fees from the start of your search – though it might be another year or more before that information goes online … and even longer for mammoth search sites like Google Flights.
The DOT first proposed these rules back in 2022, but the federal rulemaking process is anything but speedy. Still, these are sweeping changes that will reshape how Americans purchase flights, addressing the growing complaints that airlines' unbundled airfare pricing has led to constant nickel-and-diming.
Here's what you need to know.
Airlines & OTAs Must Disclose Extra Fees
From airlines' own sites and mobile apps to online travel agencies (OTAs) big and small, this new rule will require them all to display many of the extra fees from the outset.
That includes extra charges for adding a first and second checked bag, carry-on bags, and even change and cancellation fees. Sites will be required to display how much each additional item costs “first time that fare and schedule information is provided on the airline’s online platform” – basically, from the time you see the first results for your search.
Disclosure of additional seat selection fees – particularly for families traveling with children – is part of a separate federal rulemaking process that's still underway.
This new rule will apply to any flight that touches American soil, whether it's a domestic flight on a U.S. airline or an international flight to or from the states on a foreign carrier. Airlines could choose to add pop-up displays or expandable text boxes to disclose these fees, but they can't force travelers to click a link to another page dedicated to fees.
Don't expect to see the extra cost of bags broken out anytime soon, though. Airlines have until at least April 30, 2025 to meet these new requirements. Small OTAs have even longer.
And these new rules don't even apply to to Google Flights or other massive metasearch platforms like Skyscanner or Kayak. Only companies that sell tickets directly to consumers are impacted.
Airlines and their trade groups fought hard against this new rule all the way, insisting it would be too confusing for flyers, slow down their websites, or limit how many flights they could show consumers by loading up each page with information on additional fees. But now, it's happening.
“Airlines should compete with one another to secure passengers’ business—not to see who can charge the most in surprise fees,” Department of Transportation Secretary Pete Buttigieg said in a statement.
The new rule flies in the face of a decade's worth of unbundling fares in the U.S., allowing travelers to get a lower price by skipping “extras” like picking a seat or bringing a bag … or often wind up paying more thanks to paying more in fees for what they once got free. Those additional costs can easily push a seemingly cheap, $149 roundtrip fare above $300 or more.
While budget airlines like Spirit and Frontier have built their businesses around fees, even legacy airlines like American, Delta, and United will be deeply affected. Their stingy basic economy fares were a response to those ultra-low-cost carriers, charging $30 to $80 less roundtrip in exchange for foregoing free seat selection – and in some cases, even bringing a carry-on bag.
The DOT argued this rule “does not undermine the business model of unbundled offerings,” but rather improves it “by making it more transparent to consumers,” according to documents.
The Biden Administration has also been pressuring airlines to allow families to sit together free. The DOT is pushing for a separate rule that would require airlines to guarantee children and parents can sit together without paying extra to select seats.
Stricter Standards for Airline Refunds
Here in the U.S., travelers have shockingly few rights. For years, there's been just one: If your airline cancels or significantly delays a flight, passengers can cancel a trip and get a full refund – not just a voucher or travel credit, but their money back.
But even then, it was murky. It's been up to airlines to decide for themselves what constitutes a “significant delay” – and while most major airlines set that threshold at two or three hours, some budget carriers won't dole out refunds unless flight's change by a whole calendar day. And airlines have tried to strong arm travelers into taking a travel credit instead of getting a full refund.
The DOT's new rule tightens those refund requirements, setting a clear standard across all airlines for what's considered a significant delay while ensuring travelers get their money back faster:
- Passengers are entitled to a refund if an airline changes your domestic flight by three hours or more
- For international flights, schedule changes of more than six hours would trigger a mandatory refund
- Adding a connection to a nonstop flight (or additional connections) is now considered a significant delay
- Shifting your flight to arrive in or depart from a different airport would trigger a refund
- Downgrading cabins or class of service would trigger the option of a refund, too
- A plane swap that results in a flight on a different plane that is “ less accessible or accommodating to a person with a disability” would also be eligible for a full refund
Let's be clear: This rule have little to do with the constant disruptions that have plagued air travel the last few years. Airlines wouldn't be forced to compensate passengers when flights are delayed – though the Biden administration has separately called for that, too … and so have we.
Rather, it's about the fight to get your money back when a flight gets canceled or changed and you decide to scrap your trip altogether.
Instead of varying from airline to airline, these clearer standards should help travelers understand when they can get their money back. But in some cases, this new policy will actually be a downgrade.
For example, Delta's current policy says travelers can cancel for a full refund if flights are delayed by two hours or more – even domestically. With this new rule, Delta wouldn't have to offer a refund until that same flight is delayed by at least six hours.
But most importantly, airlines will be required to explicitly inform passengers that a refund is available … before offering travel credits or a voucher.
That's been airlines' go-to move for the last four years – particularly during the worst of the pandemic. They've sold tickets, canceled flights, and offered vouchers, hoping that passengers don't know they could get their money back instead. Now, airlines can no longer try to stick passengers with a voucher that might expire in a year or less.
Airlines are under pressure to get money back into travelers' hands faster, too. For credit card purchases, airlines will be required to issue a refund within seven business days – or 20 days for other forms of payment.
And it's not just flights that are subject to stricter refund requirements.
Airlines will now be required to issue a refund of any checked bag fees they paid if their bag is not delivered within 12 hours of their flight's arrival – or within 15 to 30 hours on international flights, depending on the length of the flight. That won't be automatic: Passengers will be required file a report.
Did you pay for Wi-Fi on a flight that didn't work? Or pay for seat selection or even an upgrade on a flight that wound up getting canceled. You'll be entitled to get that money back, too.
Bottom Line
Years after starting a push to rein in airlines, the Biden administration is finally putting new rules in place for refunds and airline fees.
New refund requirements set far clearer standards for when travelers are eligible to get their money back, forcing airlines to offer refunds instead of vouchers and process them faster, too. But an even bigger change is coming for dreaded airline fees, as carriers and third-party booking sites alike will be required to display the extra cost to add a bag or cancel your flight from the very start of your search.
Just don't expect to see those extra fees online anytime soon.