Department of Transportation Proposes Airline Refund Rule That Could Mean More Money in Travelers' Pockets — What to Know

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The Department of Transportation proposed a rule change on Wednesday that would require airlines to refund a customer's ticket if a domestic flight is delayed by more than three hours.

The DOT said the proposed rule change would strengthen the agency's current directive that requires airlines to refund travelers if a carrier cancels or significantly changes their flight. The new rule would officially define the terms "significant change and cancellation," according to the DOT.

"When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably," U.S. Transportation Secretary Pete Buttigieg said in a statement. "This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines."

As part of the new rule, "significant changes" would include a domestic flight that is delayed by three hours or more, an international flight that is delayed by six hours or more, changes to the departure or arrival airport, changes that increase the number of connections, or changes to the type of aircraft "if it causes a significant downgrade in the air travel experience or amenities available onboard the flight."

The new rule would also require airlines to provide flight credits or vouchers that are valid indefinitely if passengers cannot fly for pandemic-related reasons, including "government-mandated bans on travel, closed borders, or passengers advised not to travel to protect their health or the health of other passengers."

The changes come years after the DOT mandated airlines refund passengers in 2020 if their flights were canceled or affected by significant schedule changes or government restrictions due to the pandemic.

Many airlines have extended the validity of vouchers, but only Southwest has eliminated expiration dates on flight credits altogether. Several airlines in the United States have also eliminated change fees on tickets, with some carriers taking it a step further by allowing customers to cancel even basic economy fares for a fee.

Speaking on The Daily Show with Trevor Noah, Buttigieg said a lot of people don't know they may already be entitled to a refund on a canceled flight.

"If they cancel your flight, you are entitled to a cash refund and we enforce that rule," Buttigieg said. "When you ask them to give you a refund, they have to do it. But if they don't, come to us. We have an entire office of Aviation Consumer Protection… but know your rights because we have your back."

A virtual public meeting on the proposed rule changes will be held on Aug. 22 with the public able to submit comments for 90 days once it is published in the Federal Register.

The proposed rule change comes days after the Federal Aviation Administration published another notice in the Federal Register seeking public comment on the pitch, width, and length of passenger seats on aircraft. It also comes as the DOT has been pushing new guidance in recent weeks, publishing the first-ever bill of rights for airline passengers with disabilities and calling on U.S. airlines to stop charging families to sit together on a flight.

Alison Fox is a contributing writer for Travel + Leisure. When she's not in New York City, she likes to spend her time at the beach or exploring new destinations and hopes to visit every country in the world. Follow her adventures on Instagram.