• Airlines must start providing passengers with automatic refunds when flights are delayed or canceled.
  • New regulations announced Wednesday mean passengers can also get automatic refunds on delayed baggage.
  • Previously, airlines set their own policies about when passengers were eligible for refunds.

Airlines are to be required to provide passengers with "prompt" automatic refunds when their flights are delayed or canceled under a new rule from the Department of Transportation, announced on Wednesday.

The regulations, which are being rolled out over the next six to 12 months, also entitle passengers to automatic refunds for delays to checked bags and for airlines' failure to provide paid-for extra services.

Under the DOT regulations, passengers can get a refund if their flight is canceled or significantly changed and they don't accept alternative transportation or travel credits offered. This includes domestic flights delayed by more than three hours and international flights delayed by more than six hours.

Significant changes that make passengers eligible for a refund include a change in the departure or arrival airport, an increase in the number of connections, and being downgraded to a lower traveling class. Passengers can also get a refund if they're switched to connections at different airports or flights on different planes that are less accessible for a person with a disability.

Previously, airlines set their own standards for which circumstances passengers could get a refund in, which could make it confusing for passengers trying to figure out whether they were eligible for a refund and how to apply, the DOT said in a press release.

It added that some airlines gave passengers a travel credit or voucher by default, meaning they couldn't use their refund to rebook on another airline "without navigating a cumbersome request process."

Passengers are also entitled to a refund of their checked bag fee if their bag is delayed and they file a mishandled baggage report. The DOT says that the policy covers bags that aren't delivered within 12 hours of a domestic flight arriving at the gate, or 15 to 30 hours for an international flight, depending on the length of the flight.

And if passengers pay extra for a service such as WiFi, seat selection, or in-flight entertainment and then don't receive this, they're entitled to a refund for the fee they paid.

"The new rule makes it easy for passengers to obtain refunds when airlines cancel or significantly change their flights, significantly delay their checked bags, or fail to provide the extra services they purchased," the DOT said in a press release.

As well as being automatic, the refunds must be "prompt," which it describes as within seven business days for credit card purchases and 20 calendar days for other payment methods.

The refunds must be in whatever payment method the passenger originally used, whether cash, credit card, or airline miles, rather than substituting vouchers or travel credits unless the passenger accepts alternative compensation.  

The DOT also noted that airlines must provide a full refund, including all government-imposed taxes and fees and airline-imposed fees.

Many passengers have previously spoken to Business Insider about their troubles getting compensation for delayed and canceled flights and lost luggage. In 2020, when flights were canceled due to waves of COVID lockdowns, the DOT got more than 102,000 complaints from airline customers in total. Nearly 90,000 were related to refunds.

Travel chaos spiked in the summer of 2022 as vacationers returned to the skies after the pandemic canceled their plans during the two prior years. Summer travel this year is also expected to be significantly disrupted, with Boeing delaying some plane deliveries.

Read the original article on Business Insider