Back in April, the Department of Transportation issued a new rule that, among other things, required airlines to automatically refund tickets when they cancel flights or make significant schedule changes.
A court enjoined part of the rule but the automatic refunds portion is now in effect. It was actually written into law as part of the FAA Reauthorization bill.
Now, airlines already had to refund passengers when they cancelled a flight or made a significant schedule change.
- Significant wasn’t defined, so each airline came up with its own rule.
- Now the government says clearly what is required – and it is less generous what several airlines were doing.
- So now airlines are mostly following the government rule, leaving consumers worse off.
This is a new government policy, and the direct result of government policy, but many of you will look at it and complain about… the airlines.
As I explained early in the year, the new government rule is less generous than United’s and Delta’s policy used to be, but better than American’s policy. (American kept its customer-unfriendly four hour rule imposed during the pandemic and never went back like other carriers did.)
So I was worried – correctly, it turns out – that the DOT rule might cause United and Delta to revert to the government’s less generous standard, leaving many passengers worse off. Oh, and automatic refunds are slow refunds.
- United: used to provide a refund with a two-hour schedule change. It’s now 3 hours domestically and 6 hours internationally – confirming with the new federal rule.
- Delta: used to provide a refund with a two-hour schedule change. It’s now 3 hours domestically and 6 hours internationally – confirming with the new federal rule.
- American: used to provide a refund with a four-hour schedule change. It’s now 3 hours domestically, as required by DOT, but remains 4 hours for international.
- JetBlue: used to provide a refund with a two-hour schedule change. It’s now 3 hours domestically and 6 hours internationally – confirming with the new federal rule.
- Southwest: flexible policy, now settled on three hours.
- Alaska: will continue to offer refunds on one-hour schedule changes.
Auto-refunds don’t happen until after the scheduled date of travel. After all, you may want to keep rescheduled travel, and airlines won’t know since you no longer need to tell them. If a schedule change happens in advance you can still call to get refunded. Of course schedule changes are great for picking the new travel itinerary you most prefer and you should still do this proactively.
I have done this twice with American on a basic ticket. Had a 3 hr layover at jfk that got revised to a 8 hr one. Both times they re ticketed me on a better flight that reduced my overall flying time
But you not have to know what your flight options are before you call in to get the flight rerouted. Both times I suggested to the agent what flights I could take rather than have eight hour layover at JFK.
another reason to keep government out of perfectly running things that the market can dictate
Thanks, Gary, the key part of this is your last paragraph: “Auto-refunds don’t happen until after the scheduled date of travel. After all, you may want to keep rescheduled travel, and airlines won’t know since you no longer need to tell them. If a schedule change happens in advance you can still call to get refunded. Of course schedule changes are great for picking the new travel itinerary you most prefer and you should still do this proactively”. What would suck would be auto-refunds regardless of traveler preference, as you would then need to replace the ticket on short notice at a much higher fare (especially if you bought it 9 months in advance or during a sale and had a great price).
Idiots. And you know the officials behind this are all congratulating themselves
If government actions were judged on their poor results rather than their (purported) good intentions, everybody would agree that we don’t need or want it.
Thanks Gary for the analysis. How disappointing (for all but American and Alaska). I guess standardization can provide some clarity, but it’s unfortunate that the standard has been lowered for the most part. Even when it seems like there may be progress, when you read the fine-print, like here, you learn that the special interests won, yet again. Airlines for America must be so proud. They know it is exceedingly difficult to organize consumers to effectively lobby our government for better passenger protections. When things go wrong, we should continue to submit complaints and demand better. Don’t seed power in-advance. Honestly, stuff like this makes me not want to travel unless I really have to. In the aggregate, that can have a chilling effect. Only then, maybe, the airlines will fight for our business again. For now, it seems, loyalty means nothing.
Sounds like the airline lobbyists were in complete control of this new rule
This is such a bad take. It is the equivalent of saying, “Well now that there is a minimum wage, we are going to all lower our wages to that floor.” No one is forcing the companies who had a BETTER policy to make it worse. It was just setting a baseline for those who had none or worse.
The fact that Delta, United, and JetBlue are shit companies and voluntarily made their policies worse, does not mean that the government’s floor policy is bad.
Government regulators tend to underestimate the creative sleaziness and pettiness of the regulated targets in high-concentration markets. And now we see just that with the airlines deciding to be less customer-unfriendly than required. The (airline industry) Empire Strikes Back.
So the government solved something that wasn’t broken to begin with.
This is what you get when the Tranportation Secretary’s previous highest role was mahyor of a town with 18 bus routes.
Who’s a smarter dude: US DOT Secretary/former mayor Pete B or L3? My vote goes to the guy with Rhodes Scholar, US military intelligence and McKinsey on one resume. In other words, not L3.
What I can’t wait to see is someone selecting to get a refund when there is a significant change then whining that the fare now costs 2-3x what they originally paid when they go to buy another ticket! You know it will happen. Obviously they could select to change the itinerary at no cost due to the change but that requires actually thinking which, unfortunately, a large segment of the traveling public clearing can’t do.