The Biden administration may be running out of power time, but Secretary of Transportation Pete Buttigieg is using what remains of his power and platform to change the dynamic between frustrated airline passengers and the airlines that frustrate them.
Buttigieg released a video explaining new regulations in place at the DOT requiring airline compliance on refunds — and sounding the death knell for the dreaded “airline vouchers.”
“No more airline vouchers,” Buttigieg says, also revealing that airlines will be required to issue refunds in the same way they accepted the payment in the first place.
If you pay with a credit card, then if an airline cancels your flight or rebooks you on a flight you don’t want, etc., it must “automatically” refund your money within seven days and reimburse the funds to the credit card you paid with.
You might have heard about our department’s new rule requiring airlines to provide automatic refunds for cancelled or significantly delayed flights.
Here’s what it means: pic.twitter.com/7xbo9sUKNf
— Secretary Pete Buttigieg (@SecretaryPete) November 21, 2024
Part of the drive behind the Department of Transportation regulations is to get the airlines to self-police, avoiding maneuvers that would result in refunds and unhappy customers — because cash-back is more painful to the bottom line than vouchers, especially as many vouchers go unredeemed.
Another post by Buttigieg cites record on-time rates so far this year, indicating that the threat of regulation has had an impact. 2024, Buttigieg says, has seen “record-breaking air travel with the lowest cancellation rate in years.”
This year has seen record-breaking air travel with the lowest cancellation rate in years.
Heading into the Thanksgiving season, we’re expecting more record-breaking travel and working to ensure travelers and the system are prepared.
— Secretary Pete Buttigieg (@SecretaryPete) November 20, 2024
Key elements of the new refund rules, drawn from dot.gov, are bulleted below:
Automatically: Airlines must automatically issue refunds without passengers having to explicitly request them or jump through hoops.
Promptly: Airlines and ticket agents must issue refunds within seven business days of refunds becoming due for credit card purchases and 20 calendar days for other payment methods.
Cash or original form of payment: Airlines and ticket agents must provide refunds in cash or in the form of original payment used to make the purchase, such as credit card or airline miles. Airlines may not substitute cash refunds owed to consumers with vouchers, travel credits, or other forms of compensation unless the passenger affirmatively chooses to accept alternative compensation.