The Biden administration announced two new rules on Wednesday that will significantly impact the millions of Americans who fly commercially every year. The Department of Transportation (DOT) issued the rules, which aim to enhance passenger rights and protect consumers from hidden fees and unfair practices.
The first rule requires airlines to automatically issue cash refunds to passengers in several cases, including when flights are canceled or significantly changed, when baggage return is significantly delayed, and when customers do not receive inflight amenities they have paid for, such as Wi-Fi. The refunds must be issued within seven days and in cash, unless the passenger chooses another form of compensation.
"Passengers deserve to get their money back when an airline owes them -- without headaches or haggling," Transportation Secretary Pete Buttigieg said in a press release on the new refund rule. Airlines will have six months to comply with the new rules.
The second rule aims to eliminate "surprise junk fees" by requiring airlines to list and explain all extra fees "clearly, conspicuously, and accurately" on their web platforms or when they provide fare prices offline. This rule also includes a provision to eliminate "discount bait-and-switch tactics," where airlines offer discounts that appear to apply to the whole flight price but really just apply to a smaller portion of the price.
Speaking at Ronald Reagan Washington National Airport on Wednesday, Buttigieg emphasized the importance of these new rules, stating, "To be clear, we want the airline sector to thrive. It's why we're being so rigorous on passenger protection. This will build confidence in air travel at a time when airlines need to do more to secure passengers' trust."
The DOT's consumer protection team has imposed "multimillion-dollar penalties" on airlines in the past when passengers do not receive refunds they are owed, Buttigieg noted.
The White House's Wednesday announcements come after several airline incidents involving Boeing plane malfunctions that have spurred regulatory probes and forced major carriers like Southwest, Alaska Airlines, and United to reevaluate their business expectations. Last week, Buttigieg said the White House would partner with state attorneys to accelerate the response to customer complaints against airline and ticket agencies, even though only the federal government has the power to enforce passenger protections.
In addition to the finalized rules announced Wednesday, the White House is also proposing rules to ban extra seating fees for parents trying to sit next to their children, to make certain amenities mandatory, and to expand accommodations for passengers who use wheelchairs.
The new airline rules are part of President Joe Biden's broader battle against what the White House calls "corporate rip-offs." In 2022, Biden directed his administration to reduce or eliminate "tens of billions of dollars in other junk fees across the economy," leading to a multifront crackdown on hidden fees from different government agencies targeting various sectors, including banking, cable, and financial products like retirement savings accounts.
Airlines for America, the trade association for the country's leading passenger and cargo airlines, told ABC News in a statement that its members "offer a range of options -- including fully refundable fares." The group said the 11 largest U.S. airlines issued $43 billion in customer refunds from 2020 through 2023.
