DOT Answers Key Questions About Flight Refunds

Filed Under: Advice

We know that a lot of airlines have been playing games when it comes to issuing refunds for cancelled flights and significant schedule changes. Here in the US, the Department of Transportation is the governing body that oversees that.

In early April the DOT clarified the policies airlines have to follow when it comes to issuing refunds, though many airlines still haven’t been obeying the rules. Well, the DOT has this week issued a second notice addressing some frequently asked questions.

This comes as the DOT has seen a spike in consumer complaints — the organization usually sees an average of 1,500 complaints per month, while in March and April they saw more than 25,000 complaints, many of which concerned refunds.

Here are some of the key things that the DOT clarifies in the latest notice:

How are “significant changes” and “cancellations” defined?

The DOT has been requiring airlines to issue refunds in the event of cancellations and significant schedule changes. The problem is that the DOT hasn’t defined those terms, causing some airlines to redefine the terms in an unreasonable manner.

The DOT acknowledges that US carriers have different interpretations of the terms, and therefore airlines may develop reasonable interpretations.

While the DOT isn’t defining the terms now, the organization reserves the right to determine that a carrier’s refund policy is unfair and deceptive, if not determined to be reasonable.

How quickly do airlines have to refund flights?

In the event that passengers are entitled to a refund, refunds have to be made promptly:

  • For airlines this is defined as being within seven days when paying by credit card
  • For travel agencies “promptly” isn’t defined, so they have a bit more leeway; the DOT will take into account increased refund volumes when it comes to determining whether travel agencies are compliant

It’s also noted that the totality of airlines’ circumstances will be taken into account when making decisions based on refund times, as it comes down to whether airlines are making a good faith effort to provide refunds in a timely manner.

In other words, airlines likely won’t be punished if it takes them eight days to issue some refunds.

Can airlines retroactively apply new refund policies?

We’ve seen airlines adjust schedule change and refund policies a countless number of times, so can airlines do that for previously booked tickets? The answer is no.

The DOT doesn’t allow airlines to retroactively apply changes to refund policies if they negatively impact customers. The refund policy in place at the time the passenger purchased the ticket is what counts.

In other words, United Airlines can’t retroactively redefine the word “cancelled” for people who had already booked tickets.

Can airlines offer vouchers in place of refunds?

Airlines can offer consumers alternatives to a cash refund, so long as the option for a refund is also offered and clearly disclosed, assuming the passenger is entitled to one. Also, any restrictions associated with vouchers need to be made clear, or else the issuing of vouchers will be considered a deceptive practice.

What happens if passengers don’t feel safe flying?

What happens if your flight operates as scheduled, but you don’t feel safe flying due to the COVID-19 pandemic?

Passengers who purchase non-refundable tickets still being operated without a significant schedule change aren’t entitled to a refund or travel voucher.

However, it’s noted that many airlines are providing travel credits or vouchers that can be used for future travel. This isn’t government mandated, though.

Bottom line

There’s nothing terribly surprising with the DOT’s latest notice. There has been a huge increase in consumer complaints, which is to be expected given some of the practices airlines have engaged in.

The key takeaways with this latest notice are that airlines have to issue refunds within seven business days, and that airlines can’t retroactively apply new refund policies on schedule changes and cancellations.

Comments
  1. @ Ben — What airlines/flights are covered by this policy? For example, would the following ticket issued and operated by Korean Airlines be covered by these rules: SIN-ICN-ATL-ICN-SIN?

  2. @Lucky, thanks for the update. I had a domestic ticket, which was issued on a refundable fare and I had to cancel before departure. I am of the view, that I’m entitled to get a refund for that refundable domestic ticket based on the original fare rules, even if the flight has not been cancelled.

    If I understand you correctly, this is also what DOT now says.

  3. So when will the DOT actually start doing some enforcement? Refunds are 2+ months late under these guidelines from some airlines

  4. Delta just cancelled my flight and said that it takes 30+ days for them to refund the credit card charges for flight. I’m reading above that it should be 7 days. Do I have the right (and should I) complain about the 30+ days refund policy?

  5. Thanks for the update. I had a vacation package with American, the flights were cancelled and the hotel was closed. Two agents told me that I was entitled to a refund. I called a third time to check the status and was told someone changed it after the fact to a voucher and didn’t even bother to tell me. The third agent was apologetic and agreed that I was entitled to a refund and had to send an email to another department. No response yet.

  6. It took me almost two months to get my refund from Delta but I did eventually get it. I requested a refund for my flight that was canceled on March 12th and was finally refunded last week. I’m sure the airlines are dealing with a backlog of refund requests but it was definitely a little frustrating for the extended period of time and not totally sure whether or not I would get refunded. Not really sure what I would have done if I never did get refunded as it was far too late for me to make a dispute complaint with my card company and I also paid for the flight partially with gift certificates

  7. Just talked to Delta again, and their statement is : We will make every effort to process eligible credits and refunds within 7 days. However, due to extremely high volume related to coronavirus and government-issued travel guidance, please allow up to 30 business days.

  8. I don’t know if I’d title this “answers key questions”… It’s pretty vague, and I really don’t understand why the governing agency doesn’t have the ability to define those terms. That creates a huge issue.

    No one wants to have to fight an airline via the DOT because they disagree with their definition of cancelation (looking at you, United).

  9. Do US DOT rules apply to flights originating in another country that land in the US or just originating in the US?

  10. I’m in a battle with Qantas. Domestic flights within Australia. They only want to offer a credit. But I’m not traveling there again before 2021.

    @endre …. be patient. It is an unusual event they are facing.

  11. It’s all very well the DoT restating what the regulations say but unless they enforce them and actually punish the airlines then they are useless.

    What punishment will they apply to AA for them taking over 4 weeks to refund me when AA said (and it’s still on their website) it would take 7 days?

    I complained to the DoT a week on Monday and still nothing from them the same day I also chased AA and no response to that either.

    I’ve now had the refund but that’s not really the point. It took more than 3 weeks longer than it should have done based on AAs own commitments

    I’m sympathetic to a degree but my understanding has limits.

  12. Air Canada keeps laughing at the DOT, refusing refunds, even for cancelled flights into the summer and fall. Shady scam of an airline.

  13. As others have said, unless the DOT starts enforcing the rules, it’s all meaningless. The airlines know what the rules are. They don’t need the DOT to “clarify” them. But the airlines will do what they can get away with, and right now, that seems to be just about anything.

    Like others, I’ve been waiting on a refund from Delta going on 47 days.

  14. @Henry with the vast increase in requests and staff working at home, the idea that airlines are expected to refund within 7 days is a joke

    If Ryanair carries 12 million pax a month they don’t all request refunds.

    Perhaps 20k a month cancelled etc
    So now you have the potential over say 3 months of 36 million refund requests.

    Reduce that to even 20% and it’s over 7 million versus a pre covid situation of say 30,000. An increase of 23,333 %

    Say you normally have 20 emails to respond to a day and now your told you have to respond to 4000 a day

    It’s not possible Refunds are not straightforward especially when tickets are reissued and there are different forms of payment

    Your average person thinks you just press a button and it’s in your account the next day

    Try telling that person how to do their job

  15. The question remains… what will the DOT actually DO?

    Seems they keep threatening… demanding… begging… but without an order and fine, the airlines will just ignore them. (aka United’s 25 hour policy)

  16. LOL trying referencing the DOT notice on the phone with United. They say “Our policies fully comply with all DOT requirements and guidelines,” and then refuse to issue a refund.

  17. It applies to all tickets issued in the United States and for flights that take off or land in the United States.

    Seven days is reasonable and there is no reason airlines can’t add personnel from other parts of the company to work in the refunds department if it’s so backlogged. Remember the CARES Act essentially has tax payers paying employee salaries for a few months.

    DOT can make all the pronouncements they want, but until they start fining airlines, they’re going to push things are far as they can go.

  18. @daniel. They need training You think someone in the ramp has a clue about ticketing 7 days is not reasonable with an 23000% and backlog of 10 million refunds. It will take months and months
    But then people who have never worked in a particular industry always like to be didactic and tell other employers how they should do their job as of course they know better

  19. @ Icarus — Delta has issued my refunds in 2 days (this month). The excuses about the backlog are a load of bs. There is little doubt that airlines are intentionally delaying refunds.

    @ Danile — What exactly does “issued in the United States” mean? I booked my Korean Air tickets SIN-ICN-ATL-ICN-SIN over the internet at the US site for KE, so where was the ticket issued?

  20. @Gene – In the United States. The flight also touches the United States (in ATL) so you’re covered there.

  21. This is interesting timing. I purchased two business class round-trip tickets for IAD-CDG on United Airlines for October 2020. Just recently there was a schedule change that replaced the CDG-IAD nonstop with a CDG-EWR-IAD rerouting that forces me to leave CDG three hours earlier (which I cannot accommodate) and waste four hours in EWR for a connection. I purchased these tickets on February 29, 2020. I called the 1K help desk twice on 5/11/2020 and twice on 5/12/2020 requesting better alternatives or a refund. They refused every time and even got pretty nasty with me toward the end of every call. Also, after calling the first time, they automatically cleaned up my record, which also shows as if I accepted the changes…which I absolutely did not. As it turns out, my outgoing direct flight was also cancelled, but doesn’t yet show as changed in the system for my trip. This, I believe, is because there are NO outgoing IAD-CDG flights available in business class via any routing [on United metal] on my selected date. To avoid having to issue a refund due to the reduction from business to coach, they’re simply showing a phantom direct flight on my itinerary from IAD to CDG that doesn’t even exist. Maybe they’re hoping space will open at some point? Two of the the four 1K supervisors actually told me I would just have to downgrade to coach on one or more segments…but that I wouldn’t be eligible for a refund since this is a nonrefundable ticket that only experienced a schedule change! I don’t see how eliminating a flight from existence and replacing it with new routing through one or more new cities shouldn’t be considered a cancellation.

    So, I feel I have a situation that violates DOT regulations on multiple fronts (forced downgrade from business to coach, more than 2 hour change per policy as of 2/29/20 [I think], and cancellation of nonstop and automatic rerouting on inconvenient connection). Also the CDG-IAD change seems to violate EC216. Well, I filed a formal complaint with DOT yesterday and denied all charges to my credit card as well. My case seems pretty cut and dry, but I’m assembling documentation to support. Anyone know where I can get a copy of United’s schedule change / cancellation / contract of carriage policies as they existed on February 29, 2020?

    For the record, I would have accepted an electronic travel voucher in lieu of a cash refund, had the voucher been issued for, say, 110%-125% of my purchase price. Something to compensate me for the interest-free loan I essentially gave them or the hassle of having to rebook later with another carrier at a likely inflated price.

  22. Air Canada goes as far as to post on their website stating refunds are only due when flights are cancelled within their control. They specifically stated COVID 19 is NOT within their control and therefore no refunds are due.

  23. I had two tickets, one on BA and the other on Air China for two trips to Japan in April for a friend and me. I booked them both using my AMEX Platinum through AMEX Travel. When the flights were cancelled, I got a runaround from AMEX: “We are not allowed to contact Air China at this time” and “BA is only offering vouchers”. I made a complaint for each with DOT. I received two responses, one for each ticket from two different people at DOT within a couple of days, both gave me their email address in case of problems and I received both refunds within a week. I was impressed with the speed and efficiency of DOT. At least one thing in the federal government is working.

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