New Airline Refund Law: What Every U.S. Passenger Should Know

The U.S. Department of Transportation's new airline refund law recently took effect. The most significant change is that airlines are now required to automatically refund passengers under specific circumstances.

This new regulation simplifies the refund process and clarifies previously ambiguous aspects—such as the definition of a "significant delay"—once handled on a case-by-case basis. While it increases transparency around when passengers are entitled to a refund, it doesn’t significantly change entitlements much. That’s why it’s still essential to know your passenger rights, and if you encounter issues, AirHelp is here to assist.

What Changes with the New Airline Refund Rules?

The new Automatic Refund Rule from the DOT went into effect on October 28, 2024. Before this, there were only a few national guidelines regarding refunds, leaving many details up to individual airline policies.

The new law establishes clear standards and introduces three key changes:

1. Automatic Refunds: Airlines must issue refunds automatically when owed. Passengers no longer need to file refund requests. Also, they don't have to navigate the varied processes set by individual airlines.

2. Defined “Significant Changes”: For the first time, the DOT clearly outlines what constitutes a significant flight change that entitles a passenger to a refund. Previously, such determinations were made on a case-by-case basis.

3. Prompt Refunds: Airlines must process refunds quickly—within seven business days for credit card payments and 20 calendar days for other methods.

DOT New Airline Rule: When Are You Entitled to an Automatic Refund?

The new airline regulation states that refunds are required for delayed or canceled flights, as well as for other significant changes such as changes to the destination, airport, or class of service. Refunds are also provided for baggage issues and for services not delivered, such as Wi-Fi.

1. Cancelled Flights

You are entitled to a full refund of your ticket if:

• Your flight is canceled and you’re not rebooked.

• You decline a rebooking or other compensation (e.g., vouchers).

Read more about flight cancellation compensation.

2. Significant Flight Changes

If your flight is "significantly changed," you are entitled to a refund. The new DOT rules clearly define when a flight is considered "significantly changed":

• Domestic flights departing 3+ hours earlier or arriving 3+ hours later than scheduled.

• International flights departing 6+ hours earlier or arriving 6+ hours later.

• A change in the departure or destination airport.

• An increase in the number of connections.

• Downgrade to a lower class of service.

• Accessibility challenges for passengers with disabilities due to altered connections or aircraft.

Read more about flight delay compensation.

3. Delayed baggage and extra services

Refunds for checked baggage fees are provided if your bag is not delivered within:

• 12 hours after a domestic flight arrival.

• 15 or 30 hours after an international flight arrival, depending on the flight length.

For baggage issues on domestic or international flights, you may also qualify for compensation.

You’re also entitled to a refund if you paid for services such as seat selection, Wi-Fi, or inflight entertainment that were not delivered.

How Refunds Are Processed

The main change introduced by the new regulation is that refunds are now automatic. But there’s more:

• Automatic Processing: Airlines must process refunds automatically. Passengers no longer need to submit a specific refund request.

• Standard Rules: Refund rules are now consistent across all airlines. Passenger refund rights are no longer dependent on individual airline policies.

• Timely Refunds: Refunds must be issued within:

  • Seven business days for payments made by credit card.

  • 20 calendar days for payments made by other methods.

• Cash Refunds: Refunds must be made in cash or the original form of payment unless the passenger explicitly agrees to accept a voucher or credit.

• Full Refund Amounts: Refunds include the full ticket price, taxes, and fees, minus any transportation already used.

If you agree to a rebooked flight or alternative compensation (like a voucher or airline miles), you forfeit your right to a refund under these rules.

Beyond the New Rules

The new regulation simplifies the refund process and makes refund rules more transparent. This is a significant improvement for US passengers, who may also be eligible for monetary compensation on certain flights. For example, flights covered under EU 261 not only include a ticket refund but also cash compensation from the airline. Check your eligibility now with our eligibility checker.

Lastly, keep in mind that for delayed, lost, or damaged baggage, you may be entitled to compensation from the airline. To stay prepared for unexpected baggage issues, AirHelp created AirLuggage—luggage insurance made simple. Receive a fast payout in case of luggage disruption, and we’ll also assist you in claiming up to $1,950 from the airline for lost, delayed, or damaged bags.