The U.S. Department of Transportation has made clear that even in the COVID-19 era, airlines must offer ticket refunds when a cancellation or significant schedule occurs. But what constitutes a significant schedule change?
U.S. DOT Affirms Carriers Must Offer Consumer Refunds For Delayed Or Cancelled Flights
Although airlines have tried to wiggle out of offering refunds, the DOT has made perfectly clear they cannot. Consumers do not have to accept vouchers in lieu of refunds whenever a flight cancellation or significant schedule change occurs. From the latest guidance (.pdf):
“Carriers have a longstanding obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule and the passenger chooses not to accept the alternative offered by the carrier.”
To remove any doubt, the DOT added that it is immaterial whether the flight disruptions are far outside of an airlines’ control:
“The longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).”
Seems clear enough, doesn’t it?
But there’s one problem.
What Exactly Is A “Significant” Change In Flight Schedule?
The DOT doesn’t provide clear guidance on what constitutes a significant schedule change.
That’s a problem when United recently decided a significant schedule change was 25 hours (after much protest, United reduced that number to six hours). More generally, what if you consider a schedule change significant and and the airline doesn’t?
Even in its commentary on the regulatory language above, DOT says:
“We find it to be manifestly unfair for a carrier to fail to provide the transportation contracted for and then to refuse to provide a refund if the passenger finds the offered rerouting unacceptable (e.g., greatly delayed or otherwise inconvenient).”
What does “greatly” mean? What does “inconvenient” mean?
The DOT is clear in this respect; it has chosen not to draw a clear line:
“DOT has not specifically defined ‘significant delay.’ Whether you are entitled to a refund depends on a lot of factors – such as the length of the delay, the length of the flight, and your particular circumstances. DOT determines whether you are entitled to a refund on a case by case basis.”
Since the DOT has not provided a clear line, consumers are left to argue their case before the airline and if that fails, initiate a DOT complaint and hope for the best or initiate a credit card chargeback.
Do The Pros Outweigh The Cons Of A Bright Line Rule?
A bright line rule, say two hours, would provide clarity, certainty, and peace of mind. It would put airlines on notice and take away much of the uncertainty over schedule changes.
But there’s a downside, of course, to the idea of setting a bright line rule. A more generous carrier that may have been willing to offer refunds or more flexibility on more minor schedule changes may use the bright line rule to be less generous.
Still, I think that the pros outweigh the cons. For example, the DOT also requires airlines to offer a 24-hour cool-off period when purchasing tickets, as long as the ticket is booked at least seven days in advance. But the big three go even further on a voluntary basis. Delta and United offer free cancellations within 24 hours of booking, even if the ticket is booked within 24 hours of travel. Meanwhile, American offers free cancellations as long as you book at least 48 hours in advance. All three exceed the minimum requirement of the DOT. Do you think any would offer such a benefit if the DOT did not set a mandatory minimum? I don’t.
I understand why the DOT has chosen not to clearly define what constitutes a “significant” schedule change. In many ways, that just made sense in the pre-COVID-19 era. But with widespread delays and airlines holding back on refunds, the DOT should set a clear limit, even if just a temporary limit.
Do you think the DOT should provide a clear limit on what a “significant” schedule change is defined as?