New U.S. Rule Requires Airlines To Issue Automatic Cash Refunds For Delays Or Cancellations

Airlines in the United States are now required to automatically issue cash refunds to passengers when their flights are significantly delayed or canceled, even if customers do not specifically request a refund.

This new federal rule from the Department of Transportation (DOT) went into effect Monday, just in time for the busy holiday travel season.

Transportation Secretary Pete Buttigieg announced the rule on X, stating, “Passengers deserve to get their money back when an airline owes them—without headaches or haggling.”

This policy mandates that airlines provide refunds instead of travel vouchers when flights are canceled or substantially changed, and passengers do not accept the new arrangements offered.

Under the rule, airlines must refund passengers within seven business days for credit card purchases and within 20 calendar days for other forms of payment.

The rule aims to make the refund process simpler and fairer for travelers.

While the move has met some resistance from the airline industry, the group Airlines for America expressed conditional support, saying, “we support the automatic refund rule and are happy to accommodate customers with a refund when they choose not to be rebooked.”