Will New Airline Consumer Protection Rules Leave You Stranded? Automatic Refunds Not As Great As You Think

When bad weather rolls in, or your flight gets cancelled due to lack of crew or a mechanical problem, it can be tough to get rebooked. Planes are full these days. Everyone on your flight needs another seat, and there may not be enough to go around. Airlines will frequently tell you that nothing is available. But what does that even mean?

  • It’s important to do your own research and suggest flights to get booked on. I recently had American Airlines tell me I wouldn’t get home until about 12 hours later. I asked them to put me on United, and got home earlier than my originally-scheduled flight. Even just searching for flights you can buy through Google Flights or Expedia can be enough here.

  • “Nothing is available” at one moment, but availability changes all the time. People change flights, and seats open up. So you need to keep looking.

  • And “nothing is available” may just mean “nothing most people want” for instance I’ve overnighted in Kansas City enroute from D.C. to San Francisco, overnighted in Jacksonville between D.C. and Austin, and helped folks get rebooked home from Europe going via Asia in extreme cases where no seats were available – and even helped someone fly from Kathmandu to Singapore to Chennai to Hong Kong to connect up with an award ticket when flights went awry.

Sometimes you need to take extreme measures to get where you’re going, and be far more proactive than an airline’s auto-reaccommodation tools and agents will be. But will new government rules take away that chance?

The Biden Administration’s new final rule requires not just that airlines offer a refund for flight cancellations and schedule changes greater than 3 hours (domestic) or 6 hours (international) but that they do so automatically. Passengers aren’t supposed to have to request the refund.

Specifically, § 260.6 requires automatic refunds for flights cancelled or significantly changed by airlines when “when the consumer’s right to a refund is undisputed” because the facts clearly trigger the rule, and where the airline doesn’t offer alternative transportation; the consumer rejects an airline’s offered alternative; the customer doesn’t respond to an airline’s alternative by the airline’s deadline; or if no deadline then the consumer simply doesn’t take the offered flight.

  • Airlines don’t always offer transportation on another airline. Will be just see airlines process refunds instead of making that offer?

  • Or will we see refunds offered more quickly – too quickly – so that passengers find themselves with their money back instead of a ticket when the airline doesn’t have a good option to offer that they think the passenger will accept?

The ‘automatic refund’ requirement puts airlines in the position of having to cancel and refund tickets maybe too quickly. I have to wonder whether it will leave passengers with fewer options as carriers rush to comply in order to avoid fines. Others wonder this, too. We could wind up stranding passengers who don’t want to be stranded – in order to avoid running afoul of these rules.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. as usual, the feds impose restrictions w/o knowing the impact. You are right that airlines will simply give you your money back when they know they cannot get you where you need to be.
    And as has been seen in Europe, sometimes government regulations actually result in worse treatment than some airlines were giving.

  2. @Tim Dunn … Customer needs a sense of humour . If customer is a dour sourpuss he ought never be an airline passenger . When I meet someone who is angry , I try to ask they relax and enjoy the moment . This is a good opportunity .

  3. Americans would be much better off if all government regulations in Europe automatically applied in the United States.

  4. So, if I’m on the other side of the world and my flight gets canceled, is it possible that the airline will refund me the amount I paid 4 months ago — and then end up selling me a NEW oneway ticket home the next day for triple the price?

    If so, the airlines should be celebrating this rule.

  5. This situation will have to be a wait and see. It certainly could cause problems. If there were compensation rules similar to Europe, the extra costs could be at least partially paid for.

  6. Yep – I think a family that had their return flight from vacation delayed longer than the allowed time would prefer to stay overnight (even if they have to pay for the room) and get rebooked the next day instead of getting their cash back (only the unused portion so around half of the fare at best) then being stuck with the only option to likely pay 3-5x for a last minute ticket home.

    As usual our Feds pass legislation that doesn’t really work when they try to manage business processes. Similarly refunding the fee paid for bags if they are lost or delayed doesn’t do anything for the majority of travelers who don’t pay for bags (so nothing to refund) due to status, class of ticket, credit card, military, etc. another thing Mayor Pete claims credit for that really isn’t that significant

  7. I want that rfudn and I want it now! I have faith in my ability to find my own way.

    I had my won AA experience too. Returning from Spain, we rrived at Philly with a connetion to Jax a few hours later. Then flight was delayed. Then delayed again. At about 1 AM it was cancelled and we did not get out untilan early morrning commute. (I think they cancelled because of too few passengers.)

    If I’d had a refun d instead of delay, I may very well have been able to jet back to Jax that evening instead of sleeping in the airport.

    That wa sin 2006, That was one of my first and also my last flight on AA. I have over 120,000 “legacy” miles on AA from Piedmont and USAir but I will use ALL those miles on partner airlines, never AA. I fly SW almost exclusively and Breeze when I go to Vegas since they have nonstop from Jax.

  8. You need to read the actual rule. They have to offer a rebooking and a “reasonable” opportunity to accept or decline. There’s commentary about making that unusually short. And if they want to make you accept/decline automatically they have to publish those guidelienes and apply them only to tickets booked after that policy was published.

    There’s also language about how long the refunds take and when that clock starts (e.g., when the airline knows it’s not being used). So if they rebook you for tomorrow and you don’t take the flight, the clock STARTS tomorrow when you don’t take the flight. In practice, I suspect they will give a little more time before just issuing refunds.

    It’s not perfect, but it’s kind of ridiculous to think the airlines got hit with these consumer protecitons would consider responding by standing people in Dallas on a misconnect. They would just be inviting subsequent regulations. It’s their tactics that got them into this mess in the first place.

  9. When working for a LCC I used to grant people the exception all the time (especially when they got nasty) of giving in to their request for a full refund. Yes, your $22 has gone back to your credit card whenever your bank processes it. Wait, what? Southwest wants $500 to go right now when you told me you wanted a refund versus waiting until our flight tomorrow? Sorry, can’t undo it.

  10. Seems like the executive has too much power if it can drastically change an industry like this by dicate. Why not just make up a rule that if your flight is delayed the airline must put you on private jet? Is that within its power also?

  11. I don’t think Mayor Pete is stupid and doubt he is corrupt.
    I hope the lobbyists haven’t rewritten the intention of the law and it includes the words “the larger of the original ticket purchased (or award miles) or the the cost of the re-accomidation ticket less the original ticket cost”. Otherwise you get your heavily discounted saver award ticket price refunded and the passenger pays 4-10 times that amount to purchase a comparable same day fare.
    As you said Gary the airlines have brought this on themselves, canceling flights with very lite loads, shoddy maintenance and then refusing to accommodate the passenger on ALL possible carriers that would allow the passenger to continue to their destination with minimal disruption.
    I had a case where AA canceled a flight without notice for a “schedule change” and rebooked only part of the itinerary and stranded me in London(your constant gardening recommendation saved my butt)
    Airlines need to be accountable just like any other consumer provider. Too many companies have lost their moral compass since covid and we have become their sheep.
    If you don’t fight for your rights someone will eventually take them from you.

  12. Consumer Protection!? This needs to be retitled to Consumer Nightmare!
    In the event of significant delays and cancellations, the airlines can easily say, “Here’s your money back; go and find your own way home.” Then try to buy a last-minute ticket at a chaotic airport, on your own, and expect to get it at the discount price you paid several months prior.
    If the airlines play it right, they can benefit from this. By getting rid of an infrequent “bargain shopping flyer, with no loyalty to any particular airline, they have now opened a seat to rebook a loyal customer or book it a premium fare.

  13. After pulling up the PDF I supplied above with the actual text of the regulation of relevance, look for the word automatic and then read the sections around that word found with a global search inside the document.

  14. Airlines responsibility to refund without the need to cover resulting expenses when they are at fault is a deceptive promise.
    Getting back 1/2 round trip or a one way ticket with the passenger having to find new flights is s double loss.
    It would have been better to clarify and impose passenger protection rights. The airlines cry foul on this, but they end up the winners.

  15. Airlines should be required to do MORE than simply refund your purchase price. If I breach a service contract in other contexts, I can be liable for damages beyond what I’ve been paid – for example, if the other party now has to pay more for the services I was going to provide. In fact, courts can order me to do what I originally agreed to do.
    If an airline makes a major schedule change on a ticket I’ve booked, I may lose money for accommodations, tours, etc. I recognize that regulations may be aimed at reducing or eliminating the need for litigation. As an alternative, there could be some type of “liquidated damages” provision if an airline refuses to abide by their original contract with me. A delay of 4+ hours, for example, should mean a refund PLUS X% of the cost of the ticket.

  16. But there’s more to do. Hopefully the orange man doesn’t return as he will undo what little additional protections we have (you know, deregulation bla bla bla).

  17. @Steve it would still take 7 days for you to get your refund.

    And seeing how critical you claimed it would be that you got it back asap in order to get back to JAX, you would have still waited up to 7 days lol

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