New rules from the U.S. Department of Transportation require airlines to give passengers a cash refund when a flight is significantly delayed or canceled.
That means some significant cash could be returned to inconvenienced fliers in Louisiana.
Last year, had the new DOT rules been in effect, airlines would have been forced to refund $5 billion in airfares due to delays and cancellations, according to a new study.
The study, conducted by the travel site Upgraded Points, looked at flight data from 2023 to see how much airlines would have owed customers, had the new rules been in effect.
Airlines will no longer be able to compensate passengers with credits and vouchers after a serious flight issue. The airlines must implement the new cash-based rules by Oct. 28.
The new DOT regulations also make airlines clearly disclose all fees for bags and other services, although some airlines, including American Airlines, Delta Air Lines and JetBlue Airways, have sued to block this requirement.
When must airlines issue a refund for the price of a ticket?
Passengers will automatically get a refund when a flight is canceled or "significantly changed."
A "significant change" would be a domestic flight delayed more than three hours or an international flight delayed more than six hours. Passengers would also be eligible for refunds if they depart or land at a different airport, have extra connections added to their flight or are downgraded to a "lower class of service."
Before the new rules, airlines could decide themselves when a customer was owed compensation. Now the DOT clearly establishes when a refund must be given.
Travelers do not get a refund if they decide to accept alternative transportation or travel credits from the airline.
Airlines must also provide a refund if a checked bag is not delivered at least 12 hours after a domestic flight or 15-30 hours after an international flight. Passengers even get a refund if they did not receive a prepaid service, such as in-flight Wi-Fi or an upgraded seat.
How will travelers receive the refund?
Airlines must now issue refunds automatically for the price of the ticket. Customers no longer have to prove their case, request the refund or deal with an airline representative to receive compensation.
The refunds will be given in the same method used to purchase the tickets, via credit cards, cash and points. Airlines have seven days to refund credit card payments and 20 days for other forms of payment.
The airlines can deduct from the refund any travel already used. They must also refund all taxes and fees.
How much could airline passengers receive in refunds?
Upgraded Points found that flight delays and cancellations, after peaking in 2020, are back to pre-pandemic levels. Last year, a little more than 214,000 flights were canceled or significantly delayed, down 28% from the year before. Those canceled and delayed flights made up only 3% of all domestic flights last year.According to the DOT, in 2023 only 1.2% of U.S. flights were canceled, the lowest rate in more than a decade.
If the new DOT rules had been in effect last year, Upgraded Points estimates that airlines would have paid travelers $5 billion in refunds.
United Airlines would have paid out the most in refunds, $1.3 billion. The other airlines with the most canceled or significantly delayed flights last year were American Airlines, Delta, Southwest and JetBlue.
Todd A. Price can be reached at taprice@gannett.com.
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