A new set of rules from the U.S. Department of Transportation will require airlines to provide refunds instead of travel credits in certain scenarios, while clearly disclosing ancillary fees at the point of sale.

Flyers will now be entitled to cash refunds when their flights are cancelled, significantly delayed, or baggage arrives much later than scheduled.

The agency announced a new set of rules for airlines, requiring flyers to receive automatic refunds when services are not provided as scheduled.

Airlines Must Provide Refunds for Flyers Without “Jumping Through Hoops”

Under the new rules, which take effect immediately, airlines are on the hook for more of the problems flyers may face during their travel day. This includes flight cancellations, major flight delays, significant delay of luggage, or when ancillary services – like in-flight wi-fi – do not work.

The rules require airlines to provide the refunds automatically, without action or paperwork from flyers requesting a claim. Charges billed to credit cards must be refunded in seven days, while all other forms of payment must be refunded within 20 days. The refunds must incorporate the full price, including government-imposed taxes and airline fees, minus the travel already used.

In addition to refunds, airlines and travel agencies will now be required to provide all “junk fee” pricing upfront at the point of sale. The “junk fees” now required for disclosure includes:

• Checked bag fees
• Carry-on bag fees
• Reservation change fees
• Reservation cancellation fees

Moreover, travel sales agents must provide information about the extras flyers are purchasing. For instance: Buying a seat assignment aboard any carrier is not necessary to guarantee a seat aboard a flight. Flyers must also receive fee policies before they make a purchase, including the weight limits and dimensions of luggage, and rules surrounding flight changes or cancellations.

The rule will apply to travel providers, brick-and-mortar travel agencies, and online travel agencies equally. The agency says the rules will provide more transparency for passengers.

“This isn’t just about enforcing when something goes wrong – it’s making it less likely something would go wrong in the first place,” Transportation Secretary Pete Buttigieg said during remarks announcing the changes. “When an airline knows that all, instead of just a few, of the passengers on a cancelled flight are likely to actually get their money back, it gives them a different set of reasons to put in the investment and the realistic scheduling that makes a cancellation less likely to begin with.”

The U.S.-based carriers and their organizations have not taken a formal position on the new rule changes.

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Feature image courtesy: U.S. Department of Transportation