New FAA Rules Target Tarmac Delays, Mandate Automatic Refunds for Cancellations

The Biden administration announced new federal rules for airline passengers on Wednesday. These rules mandate automatic cash refunds for canceled flights and target hidden junk fees. The changes represent the largest expansion of passenger rights in decades.

The Department of Transportation finalized the regulations after years of consumer complaints. Officials stated the new rules will save travelers over half a billion dollars annually. They are designed to make the refund process seamless and transparent.

Ending the Refund Chase: New Automatic Payout System

Previously, passengers often had to navigate airline websites or wait on hold to request refunds. The new system makes refunds automatic and prompt. Airlines must now issue cash refunds within seven business days for credit card purchases.

This applies when flights are canceled or significantly changed. Significant changes include major departure or arrival time shifts, extra connections, or airport changes. The rules also cover downgrades in service class, like from first class to economy.

According to Reuters, these long-awaited rules close loopholes that previously allowed airlines to offer travel vouchers instead of cash. The Department of Transportation received a massive volume of complaints during the pandemic. Many of these complaints centered on difficulties obtaining refunds for canceled trips.

Cracking Down on Hidden Fees and Family Seating Costs

The second major part of the rule tackles so-called “junk fees.” Airlines and travel search sites must now display the full price of a flight upfront. This includes all mandatory charges like baggage and seat selection fees.

The rule specifically addresses family seating. Airlines are now required to guarantee children can sit next to an accompanying adult at no extra cost. This eliminates the practice of charging parents to select seats next to their young children.

Transportation Secretary Pete Buttigieg stated that these hidden fees have made it too hard for families to know the true cost of travel. The administration estimates the transparency will save consumers enormous sums. The final rule is even broader than the initial proposal made last year.

Industry Response and Implementation Timeline

Airlines have six months to comply with the new refund and fee disclosure rules. The family seating guarantee will be implemented over a longer period. Airlines have nine months to update their customer service plans to reflect this policy.

The industry’s main trade group has stated that airlines already offer a high level of customer service. They emphasized their commitment to complying with all federal regulations. Consumer advocates, however, have hailed the new rules as a landmark victory for passengers.

These changes are expected to standardize practices across the airline industry. They create a clear, federal baseline for passenger protections. This prevents a patchwork of state-level regulations from developing.

The new federal rules fundamentally shift power back to airline passengers, ensuring automatic refunds and transparent pricing become the standard for all U.S. air travel.

Info at your fingertips

What triggers an automatic refund under the new rules?

Automatic refunds are required for canceled flights or significant changes. Qualifying changes include a departure or arrival time shift of more than three hours for domestic flights, or six hours for international flights.

How long do airlines have to issue a refund?

Airlines must process automatic refunds quickly. For credit card purchases, refunds must be issued within seven business days. For other payment methods, the deadline is 20 calendar days.

Do the rules cover baggage fee refunds?

Yes, the new regulations extend to paid services. If you pay for a checked bag and it is significantly delayed, you are entitled to a refund of the baggage fee. The rule defines a significant delay.

How does the family seating rule work?

Airlines must now guarantee that children under 13 can sit next to an accompanying adult without extra fees. Carriers cannot charge for this service, making family travel easier and more affordable.

When do these new passenger rules take effect?

The rules are being phased in. The automatic refund and fee transparency requirements start in about six months. The family seating guarantee will be implemented within nine months.