“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” Transportation Secretary Pete Buttigieg said in a statement. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”
Under current rules, passengers are typically entitled to financial protection when the airline cancels or significantly changes their flight. And while airlines waived change fees for many kinds of tickets early in the pandemic, travelers have fewer legal protections when they decide not to use a ticket they have booked.
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The new rules would require that airlines issue credits with no expiration date to ticket-holders who decide not to travel because they are sick or because of government restrictions on travel — including, for example, the imposition of a quarantine requirement for arriving passengers. In the case of airlines that receive future government bailouts, the rule would require them to issue refunds rather than credits.
The Transportation Department says that without the protections, would-be passengers face a choice between traveling and risking the health of fellow passengers or suffering a financial loss.
“These types of actions by consumers are not in the public interest,” the department wrote in the 116-page proposal.
In the case of passengers who are ill, the department said only “serious” illnesses that are likely to spread on a plane would qualify a passenger for a voucher. That would include covid-19, “because it is readily transmissible in the aircraft cabin and would likely cause significant health consequences in many people,” but not a cold, according to the proposal.
The department acknowledged that airlines issued credits early in the pandemic but said that it has received complaints from consumers that they expired before they were able to make use of them. Others complained that the vouchers were limited to the route they had initially booked.
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Airlines for America, a trade group that represents the largest carriers, declined to comment on the proposal.
But according to a summary included in the Transportation Department proposal, industry representatives cautioned at an advisory meeting last year that new regulations affecting nonrefundable tickets “may result in the elimination of that lower-priced fare product.”
John Breyault, a vice president at the National Consumers League, said Wednesday’s proposal and other recent actions by the department representing a shift in attitude regarding consumer protection compared with the Trump administration.
“What you’re seeing, perhaps somewhat overdue, is a DOT that seems to be ready to be more active,” he said.
Wednesday’s proposal is the first step in what could be a lengthy rule-writing process. The public has 90 days to comment, including at a virtual meeting on Aug. 22, and the Transportation Department then must weigh those comments before finalizing the rules.
Under the proposal, the department is also seeking to clarify that a canceled flight eligible for a refund is any flight that an airline had offered in its reservation system and then removed, no matter the reason. The proposal would also define what it means for an airline to significantly alter a flight, a step that also triggers refund requirements.
The Transportation Department was inundated with complaints about refunds when the pandemic began more than two years ago. Those complaints subsided for a while, but the issue of consumer protections for passengers has resurfaced this year as airlines have found themselves ill-prepared for a surge in travel demand. That has led short-staffed carriers to cut back schedules and cancel flights.
On Monday, a group of Democratic members of the House and the Senate introduced legislation that would build on existing federal refund rules. The bill would entitle passengers to refunds if they cancel tickets at least 48 hours before departure.
“Enough is enough: Travelers are sick of wasting their valuable time fighting the airlines to receive their legally-required cash refunds,” Sen. Edward J. Markey (D-Mass.), one of the bill’s sponsors, said in a statement. “And they are tired of making flight reservations months in advance, only to face a health scare that forces them to choose between canceling a nonrefundable flight or traveling and risking the health of their fellow passengers.”