Pete Buttigieg announces automatic refund rule for canceled U.S. flights ahead of busy holiday season

By: Avi Verma MD(h)

In a major win for U.S. travelers, airlines are now required to issue automatic cash refunds if a flight is canceled or significantly delayed. The new rule, implemented by the Department of Transportation (DOT), eliminates the need for passengers to formally request refunds, making the process more transparent and efficient.

Transportation Secretary Pete Buttigieg made the announcement on X, sharing, “Passengers deserve to get their money back when an airline owes them—without headaches or haggling.” This regulation went into effect just a month before the holiday season, which is expected to see a surge in travelers. Originally proposed in April, the rule mandates that airlines provide a full refund within seven business days for credit card purchases and within 20 days for other payment methods.

The automatic refund policy is intended to address common passenger grievances and restore trust in the industry. Buttigieg has also urged airlines to clearly communicate passengers’ rights to refunds under this new rule.

While the airline industry has pushed back, industry lobby group Airlines for America voiced support for the automatic refund policy, stating that it is committed to accommodating customers who prefer refunds over rebooking.

This change marks a significant step forward in consumer rights for air travelers, particularly at a time when holiday travel demand is expected to test the industry’s preparedness.