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The Department of Transportation unveiled new rules that provide more transparency in the price of airline tickets and change how airlines handle refunding canceled or altered flights.
Under the new regulations, airlines will be required to refund passengers in cash for canceled or "significantly changed" flights. A flight is considered significantly changed if the departure time is updated by three hours for domestic flights or six hours for international flights, if the departing or arriving airport is changed, if the number of connections is increased, if a passenger is downgraded to a lower class of service, or if the changes are less accessible or accommodating to a person with a disability.
The new rules give the airlines 20 days to automatically issue the refunds in cash or the same form of payment used to purchase the tickets.
Travelers are also entitled to a refund of their checked bag fee if their luggage does not arrive at their location within 12 hours for domestic flights and between 15 and 30 hours for international flights.
"Passengers deserve to get their money back when an airline owes them - without headaches or haggling," said U.S. Transportation Secretary Pete Buttigieg. "Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers."
The agency also announced a new requirement that airlines and ticket agents must disclose upfront any fees they charge for checked bags, carry-on bags, and canceling or changing a reservation. The Transportation Department expects the rule to save consumers $500 million annually.
"Airlines should compete with one another to secure passengers' business—not to see who can charge the most in surprise fees," Buttigieg said in a statement. "DOT's new rule will save passengers over half a billion dollars a year in unnecessary or unexpected fees by holding airlines accountable for being transparent with their customers."