Instant Refunds Now Mandatory Under New Airline Transparency Rules

The Biden administration announced on Wednesday that airlines must now give instant refunds when they cancel flights. This rule, along with others, was introduced to make the cost of flying clearer and to stop airlines from charging surprise extra fees. 

The new rules were revealed by the Department of Transportation and are part of a bigger effort to make traveling fairer and more transparent.

Instant Refunds and Transparent Pricing: A New Era for Air Travel

Starting now, if an airline cancels a flight or changes it significantly, they must automatically return the full amount of money to the passenger. This means travelers will not have to ask to get their money back; it will be done instantly. 

The rule also covers situations where baggage is returned very late or when paid services like Wi-Fi are not provided during the flight.

In addition to the instant refunds, airlines are also required to show all potential extra costs upfront. 

According to the New York Post, this includes fees for checked bags, changing a booking, and other additional charges. These fees must be clearly stated on the airline's website or any place they advertise their prices.

Transportation Secretary Pete Buttigieg emphasized that these changes are meant to prevent airlines from hiding the true cost of travel. By making these fees obvious from the start, it is hoped that airlines will compete fairly, focusing on service rather than tricking customers into paying more.

The new transparency rules are expected to save passengers up to $500 million a year in unexpected fees. 

These measures show the administration's ongoing efforts to eliminate unnecessary and deceptive charges in various sectors, including banking and entertainment, aiming to save Americans billions annually.

Related Article: What to Do If Cancelled Flights Throw Your Plans Off Track

Airlines Vary in Speed of Award Ticket Refunds

Travelers looking to reclaim airline miles and taxes from canceled flights find that the speed of refunds can differ greatly across airlines. For members of several major U.S. airline loyalty programs, instant refunds of miles are common. 

The Points Guy revealed that programs like Air Canada Aeroplan, American Airlines AAdvantage, and Delta SkyMiles return miles to travelers' accounts immediately after cancellation. 

However, the time it takes to get taxes and fees back depends on the airline and the bank processing the refund, usually taking 2 to 3 days.

Some airlines, like Avianca LifeMiles and Etihad Guest, may take longer, with mileage and tax refunds stretching up to 45 days or more. This variation in refund times highlights the need for travelers to understand the specific policies of their chosen airline loyalty program before booking. 

Instant refunds provide peace of mind, but not all programs offer this benefit, making some cancellations more stressful.

Meanwhile, travelers are entitled to instant refunds for canceled flights, significant delays, or downgrades in service class, says the DOT. Refunds also apply for unused optional services and lost baggage fees. 

Each case is reviewed individually to determine eligibility for a refund.

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