Skift has learned that the Department of Transportation’s new consumer protection rules for the airline industry require airlines to provide passengers with automatic refunds if a flight is significantly delayed or canceled. Any delay or cancellation, regardless of the reason, qualifies for a refund. Passengers facing changes to their itinerary, such as switch in airports or increased connections, are also eligible for a refund. However, passengers cannot receive an automatic refund if their flight is rebooked after a significant delay or cancellation.
The rules will start to take effect in six months and airlines that violate them could face fines of up to $41,577 for each violation. Passengers can report complaints to the federal government and the DOT will monitor airlines’ adherence to the rules through investigations, including inspections of airports and airline headquarters. Airlines are expected to comply with the rules to avoid penalties and fines.
The airline industry, represented by Airlines for America (A4A), has pushed back against the new rules, arguing that they will lead to confusion for consumers, reduction in choice, and a decline in competition that could increase prices. A4A believes that unnecessary regulations without collaboration could harm the industry. The trade group is also calling for the DOT to address the ongoing air traffic controller shortage to improve air travel operations.
The Skift Travel 200 (ST200) index tracks the performance of airline sector stocks, including network carriers, low-cost carriers, and related companies. The index combines the financial performance of nearly 200 travel companies worth over a trillion dollars into a single number. Investors and industry stakeholders can use the ST200 index to assess the financial health and performance of the airline sector and make informed decisions based on market trends and data.
Overall, the new consumer protection rules announced by the Department of Transportation will provide passengers with more rights and safeguards when faced with significant delays or cancellations. Airlines will need to comply with these rules to avoid penalties and fines, while stakeholders in the industry will continue to monitor the implementation and impact of these regulations on air travel operations. It remains to be seen how the rules will be enforced and whether they will lead to improvements in customer service and transparency within the airline industry.
