US airlines must now issue mandatory refunds for canceled flights, delays, and more, effective immediately.

Travelers can now expect mandatory refunds from US airlines in the event of flight cancellations, delays, significant itinerary changes, or if checked luggage is not delivered on time as told by Federal Administration.

This mandate was officially enacted on Wednesday by the Department of Transportation, which issued a comprehensive final rule. “Travelers are entitled to straightforward refunds when airlines owe them one, eliminating the need for any unnecessary hassle or negotiation,” said Transportation Secretary Pete Buttigieg during the announcement of the new guidelines.

The regulation stipulates that refunds should be issued directly in cash or returned to the original payment method, explicitly ruling out the use of vouchers. Airlines are also required to provide these refunds promptly and automatically, without necessitating any specific request or additional effort from the passengers.

Here’s what you can expect under the new rule:

If your flight is canceled…
You will receive a full refund if your flight is canceled. If you prefer to proceed to your destination, you may choose another flight, travel credit, or alternative transportation options offered by the airline.

Secretary Buttigieg clarified in a discussion with CNN that this requirement applies “regardless of why your flight is canceled,” whether due to technical issues, weather conditions, or any other reason.

If your flight is delayed or the itinerary is significantly changed…
Airlines are now required to provide refunds for “significant changes” to the itinerary. This includes instances where your flight’s scheduled departure or arrival time is adjusted by three hours or more on domestic trips or six hours or more on international trips.

You are also eligible for a refund if the airline changes your departure or arrival airport, adds a stop to your itinerary, downgrades your service class, or fails to accommodate your disability adequately.

In the case of canceled flights, passengers will only receive a refund if they decline any alternative transportation or travel credits the airline offers.

For issues with baggage and additional services…
If your checked baggage is significantly delayed, you are entitled to a refund of the baggage fee, provided the bags are not delivered within 12 hours after a domestic flight or between 15 and 30 hours following an international flight, depending on the flight’s length.

Furthermore, if you pay for added services like Wi-Fi, seat selection, or in-flight entertainment and the airline does not deliver, you are also entitled to a refund.

When will the rules take effect?
The implementation of these changes will be phased in over the next 6 to 12 months, as stated by the DOT. Information about these new passenger rights is available on the department’s website.

Additional changes to improve transparency
In a related measure, the Transportation Department has introduced a rule requiring airlines and ticket agents to disclose upfront any fees for checked and carry-on luggage, and for changing or canceling a reservation, at the first point where a price and schedule are shown on their websites.

This rule also compels airlines to inform passengers that they have a guaranteed seat without additional fees, although it does not prevent airlines from charging for preferred seating arrangements. This charge is commonly applied to premium seating options, such as exit-row seats and those near the front of the cabin.

These new rules are projected to save consumers more than $500 million annually.

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