New airline travel protections for consumers: refunds, transparent fees and more

Nearly a year after serious discussions started, Congress is close to approving a new Federal Aviation Administration Reauthorization bill that includes some significant new protections for travelers but falls short of several common sense changes that many consumer advocates had hoped for.

The legislation was expected to be finalized before the last federal fiscal year ended Sept. 30, but Congress instead passed multiple extensions while lawmakers tried to reach agreement on issues including the retirement age for pilots, training for air traffic controllers and various consumer protections.

The nearly final version includes several new rights for air travelers, including:

• Cracking down on airlines and focusing on their obligation to issue prompt refunds to customers who want them when flights are canceled or significantly delayed, defined as a change of three hours or more for a domestic flight.
• Eliminating fees for young children to sit with a parent or adult travel companion.
• Requiring travel vouchers to be valid for at least five years.
• Mandating free, 24/7 customer service to live agents.
• Requiring the Department of Transportation (DOT) to permanently maintain a side-by-side dashboard comparison detailing how the 10 largest U.S. airlines accommodate travelers with rebooking, hotel expenses, meal vouchers, etc., when a cancellation or delay is the airline’s fault. DOT launched this dashboard in 2022 and it’s been a phenomenal success in motivating airlines to improve consumer protections. And the congressional bill says DOT must create a dashboard showing each airline’s minimum seat sizes.
• Requiring airlines to establish policies to reimburse customers for expenses related to a cancellation or significant delay directly attributable to the air carrier.
• Requiring airports to prominently display posters that notify travelers they have lots of rights by law.

The bill also proposes increasing civil penalties against airlines that violate a law, from $25,000 currently to $75,000.

The bill, however, doesn’t include some important provisions outlined in the DOT rules announced April 24, including some provisions involving refunds. A key DOT rule would require airlines and ticket agents to issue no-hassle refunds for customers who want them, starting Oct. 28, 2024.

Perhaps more importantly, the bill doesn’t require for up-front disclosure of fees, namely for the first checked bag, second checked bag, carry-on bag and any fees for the consumer changing or canceling their booking. This fee transparency is part of what DOT announced April 24. It will start phasing in next year.

It’s great that Congress is codifying several important consumer protections, because a federal law provides stronger guarantees than a DOT rule, which a future DOT can change or not enforce. It’s also welcomed news that both Congress and DOT are finally addressing the mess and stress that consumers have encountered for four years with refunds.

This started back in early 2020 at the beginning of the COVID-19 pandemic and there are still travelers who never got refunds. In 2020, our research found that 89,511 complaints were filed about refunds with DOT. Refund complaints declined in 2021 and 2021, but we were still seeing 20,000 to 30,000 refund complaints a year. Complaint volume about an array of issues – including cancellations and delays, lost bags and bumping – were so bad in 2023 that DOT hasn’t even released the tallies yet.

DOT started looking at new refund rules back in 2022. We are also concerned that new requirements that are aimed at helping consumers will actually make passenger rights more confusing, if what Congress approves and what DOT implements are different. DOT will require fee transparency starting next year; Congress ignored that.

The analysis conducted by U.S. PIRG Education fund last year of DOT data shows travelers consumers filed more complaints against U.S. airlines in 2022 than in any year in history – 47,591 complaints. When DOT finally releases the 2023 complaints data, that likely will show a new record against U.S. airlines. The onslaught of complaints started in 2020 and travelers have been begging for relief. The new consumer protections should address some of the biggest problems consumers have complained about, but not all of them.

The issue with refunds is messy, however. If your flight is canceled or significantly delayed, you don’t necessarily want a refund — you just want to get where you were going as soon as possible. So if the airline issues you a refund automatically, you may have to turn around and book a last-minute ticket with another airline. That could cost you significantly more than the price of your original ticket.

What DOT really wants: Airlines should work with travelers when issues pop up, whether the cancellation or delay is caused by the airline (crew shortage or equipment problem) or the FAA or Mother Nature. When a cancellation or delay is the airline’s fault, all 10 of the largest airlines will rebook passengers on their own airline at no additional cost; six of the 10 will rebook you with a competitor. (Alaska, American, Delta, Jetblue, Hawaiian and United will; Allegiant, Frontier, Southwest and Spirit won’t.)

We recommend that travelers ask for rebooking, a meal voucher, hotel accommodations, etc. regardless of the reason for the disruption. If you’re nice, the airlines will often say yes.

See our consumer guide at Airline travel tips you shouldn’t fly without  (FlightTips.org)