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 – conforming 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 – conforming 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 – conforming 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.
“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.”
Actually, I think it kinda does…
So it’s not just Chasten who is getting it in the backdoor from Mayor Pete.
I’m gonna miss Mayor Pete after the (possible) upcoming administration change in January. Biden/Harris are fighting for the passengers except when it comes allowing the big 3 airlines to slot squat at the big east coast airports.
I wonder if this new rule was the result of budget airlines screwing over passengers as opposed to full service airlines interruptions.
You get the airline refund after the flight even if you “accept” their (delayed or cancelled) flight time change? Passenger needs to request the refund or it just arrives? (I read that if the “arrival” puts the flight back within the acceptable range – no refund)…..
The government sounds like that guy in high school that insisted your car was not running at its best, and would then insist on fixing it. If you were smart, you wouldn’t let him, because if you did it would never run well again.
“conforming to the new federal rule”, not “confirming with the new federal rule”
Don’t worry they’ll get us back like ‘sit in your seat and shut up.’
How does this apply if the delay causes you to miss a connection.
“conforming”, not “confirming”
Schedule changes should be illegal. The traveler commits to the itinerary when he/she buys the ticket, and so should the airline. If the airline thinks a different schedule is better for them – then introduce that schedule for new bookings only, and lave existing bookings alone.
This take is wild. The rule change only set a minimum standard. Alaska didn’t change their more generous policy, the airlines didn’t have to change, they chose to out of greed. Blaming the airlines for their choice to be more restrictive, not the government which simply set a reasonable*minimum* standard is absolutely the correct thing to do. Are you people actually stupid?
@A. Traveller – the AMBIGUITY of the old rules caused airlines to settle on different standards. DOT clarified what they would accept, and airlines mostly moved to that. Of course this change, which comes immediately after the new rules went into effect, is because of these new rules. And there’s no doubt that consumers were better off the day before rather than the day after the rules.
“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.”
Pretty sure the government did not set any policy requiring (or requesting) any airlines to cut back on their refunds.
In other words, these airlines, which were already in compliance with government policy, decided to make a change anyway, which benefits themselves.
So, no, that’s airline policy
You don’t have to take the refund and go home. You can still take the alternate itinerary (and be compensated for the delay, as always).
It seems like nobody on this feed has had the pleasure of listening to hold music for hours while chasing down a refund for a broken wifi system.
For those of you who have bought the “market” cool-aid, please remember that until the government stepped in, all airlines in the market refused to offer refunds for cancellations due to COVID and had extended refunds for delays to over 12 hours.
That’s what they would do without the government. Now we have a clear choice of a new flight or automatic refund. 100% win, overall, only a click-starved non-expert can find fault with something positive.
There’s a TON of value to know that there’s a single rule. Economists know very well that complexity is a barrier to efficient markets (and other things, which is why there’s no “market” on traffic lights and my city’s traffic lights look exactly like yours), and this rule makes the market for airline tickets much more efficient.
Bravo.
Leave it to the government to interfere once again. The airlines must be held accountable. It’s necessary for people to be able to bring private rights of action to recover damages when airlines breach contracts for reasons that are within their control. The fact that they cannot be sued if somebody ends up out of pocket is appalling and irresponsible. If they can’t be held accountable, they just simply won’t behave. The FAA and in particular the Biden-Harris administration (I know it’s unusual to hyphenate an administration but Harris likes to be hyphenated so we’ll keep it that way for the time being) which tolerates this behavior is responsible and the next administration must roll this back and work to change the law so that airlines can be sued for damages without limitation. This is a similar reason why many did not become vaccinated against COVID–No liability. If the government says you can’t sue the people who do wrong, why should you trust that they won’t?
Oh Gary, you pompous, bloated ass. You will say anything as clickbait. Bottom line, the customer is better off with the government stepping in for mandatory refunds. Delta (your favorite), Jet Blue, and United CHOSE to be more restrictive.
@Kurtis Ovrrton – yes, airlines chose to be more restrictive now that the DOT made clear what the standards are instead of leaving it ambiguous.
Airlines were more generous before as their way of complying with the old rules. DOT said they didn’t have to do this anymore while remaining compliant.
Customers had more flexibility with Delta, United and Southwest before the new rules than after. This was an entirely predictable outcome. I even predicted it!
This is a shit take. There’s no guarantee all the “generous airlines” would have remained generous anyway, regardless of what the government did. The big 3 have been cutting and cutting already — as someone who couldn’t get Delta to issue a refund during COVID-19 cancellations, the idea that they’re generous is just ridiculous.
People not understanding the consequences of government action is the actual downfall of this country. These takes are like “Defund the police is great. It’s the criminals’ faults that they commit more crimes after.”. Or “Let’s unfreeze Iran’s money.”. Then, “why did *that* happen?”
I overall agree with Gary that airlines making their policies less generous is a negative effect of this government policy, but… I do see one positive effect from this:
If there is a schedule change, and your airline is unable to reaccommodate you on an alternative schedule that fits your needs, you can basically keep the rebooked itinerary as a backup, shop around with other airlines, and see if they have suitable itineraries and/or price drops that fit your needs, until the very last minute, because now the airlines are obligated to give you an automatic refund in the case of a no-notice no-show, right?
This will likely increase overbooking for any flight that underwent a significant schedule change.
Complaining about this rule as making things worse for consumers feels the same as making the argument that a minimum wage will lead to no companies paying more than that. That’s clearly nonsense. Having a minimum standard doesn’t preclude companies from doing better, especially if they think there’s a competitive advantage to it.
As someone who experienced a 9 hr United delay in March, I can firmly tell you you have no idea what you are talking about. I fought with them for months over this. The two hour refund rule only applied if you do not end up taking a flight. I was told repeatedly by multiple agents that I was not entitled to any kind of refund despite the egregious delays due to their own technical failures. Similarly, that same month Delta delayed our flight a full day and again offered no compensation. But at least they were willing to reimburse part of our hotel stay for that extra night.
The government should just change it to 2 hours as the baseline. Then everyone would be happy.
To all the airline shills braying “waaa….big gubminttttt…..”, including Gary —
There is NOTHING in the rule that says airlines cannot do better than the mandate.
The airlines ARE using this as a cop out to provide worse service and y’all doofuse are blaming the government.