Buttigieg Stands Firm on New Airline Refund Rules

U.S. Transportation Secretary Pete Buttigieg emphasized that the 10 largest U.S. airlines must adhere to new passenger refund obligations passed by Congress, rejecting requests for extensions. He underscored that airlines must provide automatic cash refunds for canceled or significantly changed flights. This directive follows significant flight disruptions caused by a software glitch.

U.S. Transportation Secretary Pete Buttigieg on Tuesday warned the 10 largest U.S. airlines that they must comply with new passenger refund obligations passed by Congress in May, rejecting an industry request for more time. Buttigieg stated in letters to airline CEOs that they must follow the new refund provisions, taking a hard line with the industry.

"The law did not provide for extensions or delays. Accordingly, we will be taking all appropriate steps to responsibly enforce these provisions using our investigative and enforcement powers," Buttigieg said. Airlines for America, an industry trade group representing Delta Air Lines, United Airlines, American Airlines, Southwest Airlines and others, had sought additional time on a number of provisions on July 3.

The group argued that new technology solutions needed to comply with these requirements would require thorough development, testing, and refinement before successful deployment. The group did not immediately comment on Buttigieg's letter. The DOT announcement came a day after the 5th Circuit U.S. Court of Appeals blocked new DOT airline fee disclosure rules from taking effect in October.

Airlines for America warned that providing automatic refunds if consumers do not respond to an offer of alternative transportation, and the flight departs without that passenger, could negatively impact many consumers. "Airlines must clearly and proactively inform passengers of their right to a refund whenever their flight is canceled or significantly changed," Buttigieg said. "Cash refunds - not vouchers or credits - must be automatic for passengers when they are owed."

The issue has gained new attention after a software update by CrowdStrike triggered system problems for Microsoft customers, including airlines, on July 19. Delta suffered widespread disruptions for six days, resulting in over 6,000 flight cancellations, impacting more than 500,000 passengers and prompting DOT to open an investigation.

Congress in May required airlines to take immediate steps, including making credits good for five years. Airlines for America stated that most airlines do not have the technological capabilities to issue and support vouchers and flight credits with a minimum travel validity of five years, estimating that 12 months will be needed to achieve the required solution. However, Buttigieg rejected this claim, pointing out that any airline providing vouchers or credits with a shorter validity period must take immediate steps to remedy this noncompliance.

(With inputs from agencies.)