Having a flight significantly delayed or canceled can be a dizzying experience, and it can lead to mounting costs if you’re not prepared. You may be stuck paying for additional meals or a hotel stay you didn’t plan for, and you can lose money by having to pay for certain items like seat selection or checked baggage fees a second time.
While a comprehensive travel insurance plan can protect against certain losses, the U.S. Department of Transportation announced new rules to protect consumers from certain flight-related losses last year.
“Passengers deserve to get their money back when an airline owes them – without headaches or haggling,” said U.S. Transportation Secretary Pete Buttigieg in a press release from the agency. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”
Here’s what those rules mean for travelers who face flight cancellations, delays and related financial losses in 2025 and beyond.
New airline rules for flight cancellations, significant delays and more
While there are some exceptions for when the new airline rules for flight cancellations apply, they typically come into play when:
- A flight is canceled or delayed significantly
- Checked baggage is delayed significantly
- Airlines fail to offer extra services that travelers purchased
Generally speaking, the new airline rules state that passengers are entitled to an automatic refund for the cost of flights and related purchases the airline does not provide when a flight doesn’t go as planned or baggage takes too long to arrive. Also note that the rules apply even if a flight is canceled or delayed for reasons beyond an airline’s control, including storms or other inclement weather.
Under the new rule, refunds are issued when:
- A flight is canceled or significantly delayed and the passenger does not accept “alternative transportation or travel credits offered”: This means you cannot accept to be rebooked on an alternative flight if you prefer to be refunded the cost of airfare instead. The U.S. Department of Transportation considers a flight to be significantly delayed when changes to a flight time exceed more than three hours for domestic flights and six hours for international airfare. Changes to the arrival or departure airport also count here, as well as an increase in the number of layovers, aircraft changes that impact mobility, and instances where passengers are downgraded to a lower class of service.
- Bags are delayed significantly and a passenger files a mishandled baggage report: A refund for checked bag fees applies when bags are delayed by at least 12 hours after arriving at the gate for domestic flights or within 15 to 30 hours of arriving at the gate for an international flight (depending on the length of the flight).
- The airline does not provide services already paid for: If a flight is canceled and the airline does not provide the service, the new airline refund policy says passengers must be automatically refunded for additional fees. This refund rule can apply when passengers pay for seat selection, in-flight entertainment, or other services ahead of time.
The new rules also dictate how the refunds must be given to passengers, which is another major win for consumers. Not only must the refunds be automatic without requiring consumers to file paperwork, but airlines can no longer give reimbursement via travel vouchers like they have in the past. Refunds to credit cards must be issued within seven business days of becoming due, although other types of refunds (including airfare purchased with a debit card) can take up to 20 calendar days.
Airline refunds for delays or cancellations must also be in the full amount paid (including government or airline-imposed taxes and fees), and come in the form of cash or the original form of payment. This means that paying for airfare with a travel credit card means getting your refund back on the same card. If you paid for airfare with airline miles, this also means you’ll get your miles refunded to your loyalty account.
A final rule also says that airlines must provide travel credits or vouchers in instances “where consumers are restricted by a government or advised by a medical professional not to travel to, from, or within the United States due to a serious communicable disease.” These credits or vouchers must be transferable and remain valid for at least five years from the date they are issued.
How credit card protections work alongside the new rules
These flight cancellation refund protections are offered on top of any travel insurance perks your credit card might have, if you paid for your airfare with plastic. This means you can get an automatic refund when flights are canceled or delayed, or for an eligible baggage delay, even if you paid for airfare with a credit card that offers trip cancellation and interruption insurance or flight delay coverage.
However, credit card travel insurance can offer even more protection since certain types of coverage can reimburse you for additional expenses related to travel delays, including unplanned hotel stays and meals you have to pay for while you wait for your flight to depart. Some travel insurance coverage offered through credit cards can even pay for extra expenses you incur while you wait for your bags, like clothing, toiletries or charging cords for your electronics.
Bottom line
While it may take a while to see how well these new rules actually work for consumers, some of these changes were desperately needed. It’s already frustrating enough to have flights canceled or delayed by several hours, but requiring people to jump through hoops to get their money back needs to end.
The fact that airlines must refund to the original form of payment is also a major benefit to consumers who don’t want to get stuck with travel vouchers or “coupons” they may not be able to use. This new set of guidelines helps protect consumers from losing money when their flights don’t go as planned, and without having to navigate complex refund rules that can vary from airline to airline.
Just remember that you won’t receive an automatic refund if you accept a rebooked flight from the airline for your canceled or significantly delayed itinerary. You have to reject the rebooking and wait it out for the refund instead, which may mean having to book alternative flights on your own.
