New US Department Of Transportation (DOT) Proposal Would Be A Big Win For Passengers

On Wednesday, the US Department of Transportation (DOT) issued a proposal that, if passed, would represent progress in developing codified rights for passengers (full 115-page version here). In particular, it addresses the issue of when passengers are due full refunds.

We’ve heard this story before, of course. The government threatens vague action against the airlines and, in return, the airlines offer a toothless “passenger bill of rights,” such as the infamous one in 1999 that preceded the 2000 summer, one of the worst in travel history.

The current proposal, though, spells out some hard and fast rules around delays and passenger refunds. It’s just that, of course, a proposal. Any legislation that is actually proposed will likely have sections added or eliminated, after a comment period. But it also clearly defines terms that had previously been ambiguous and varied by airline.

When Will I Be Entitled To A Full Refund?

Technically, you’re already entitled to a refund if the airline makes a “significant change” to your flight. But each carrier decided what that term represented. The DOT proposal not only defines it but expands the list of when carriers must offer a refund. They include:

• Changes that affect arrival or departure by at least three hours (six for international flights);
• Changes to the departure or arrival airport;
• Changes that increase the number of connections; and
• Changes to aircraft type, if it causes a “significant downgrade in the air travel experience or amenities available onboard the flight”

Let’s unpack this a bit.

Changes that Affect Arrivals and Departures

Each airline has its own policy regarding refunds in the case of cancellation or delays, so the DOT ruling formalizes the time frames. In this case, some passengers may be worse off if their airline adopts the new policy, since many will currently offer a refund or free change for two hours or fewer. I’d hope that they’d keep the more generous time frame.

Change to an Arrival/Departure Airport or Additional Connections

This is another area where the interpretation of the existing rules can be somewhat mirky. Changes to an airport are rare, but every one of us has been on a non-stop that has been changed to a one-stop. Flight changes have always been part of the routine, but they became maddeningly common in 2021, as airlines frequently adjusted their schedules to account for changes in demand.

Aircraft Change

This is bound to be one of the most controversial aspects of the proposal. Specifically, who defines a downgrade in the flight experience or amenities? In this case, it sounds like it would be the airline. Traditionally, aircraft substitutions have not been considered a reason for an airline to offer a refund. But if you buy a first class transcon ticket on a premium aircraft (e.g., Delta One), you’ll have certain expectations about the seat and service that would differ if the airline had sold you a flight in traditional first class. I would define that as a significant change, but we have to count on the airline doing so, as well. And they probably will.

But what happens when it’s a minor change (or at least one that the airline doesn’t consider significant)? Does a passenger have the right to cancel because they got moved to a plane without air vents? How about if a meal is changed? There’s no mid-cabin lavatory? Etc. I’d like to believe that common sense would prevail, but we’re talking about air travel here, so all bets are off.

Protection Under Future Health Crises

The bill also provides regulations in the case of another 2019/2020. This one gets more interesting, though, as it addresses a consistent consumer complaint: Airlines who received money from bailouts but still mistreated passengers. The language reads:

A voucher that never expires is a pretty good outcome, particularly considering that this it is defined under a unique event.

But what makes this passage particularly interesting is that it differentiates between airlines that receive future government assistance (2019-2020 is not applicable). If you accept “significant government assistance,” you would be required to issue issue an actual refund. In the end, it doesn’t make too much of a difference, but it is a token to address passenger resentment.

Hopefully, This is the Beginning, not the End

This proposal is not perfect, but it moves the industry in the right direction. I’m glad that they are addressing the issue of cancellation rights ahead of time, but there’s still a long way to go, whether that’s addressing what to do about passengers trapped at the airport after their flight was cancelled or whether compensation should be on par with that required under EC 261/2004 for the EU.

The airline business is a difficult one and factors beyond the control of the carriers will always impact operations. That having been said, the airlines are often their own worst enemies, frequently lacking the ability to “read the room.” I can understand their wanting to hold onto as much cash as possible during a crisis, but their inability or unwillingness to issue refunds over the past year when they were clearly due didn’t help their public relations. The breakdown in operations this summer appears to have been the final nail in the coffin, though. The only thing worse than ruining someone’s summer vacation is doing so after they haven’t been able to travel for two years.