The Biden administration on Wednesday unveiled two new rules that will directly affect the millions of Americans who fly commercially every year. The first rule requires airlines to be more transparent about extra fees. The second rule requires airlines to issue cash refunds automatically, rather than in response to customer requests.
The various provisions of the new rules, issued by the Department of Transportation, will be implemented on different timelines ranging from six months to two years.
“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a press release on the new refund rule.
The rule mandates that airlines automatically give passengers their full money back in several cases: when flights are canceled or significantly changed, when baggage return is significantly delayed and when customers do not receive inflight amenities like Wi-Fi that they have paid for.
The other rule aims to eliminate so-called “surprise junk fees.”
“Airlines should compete with one another to secure passengers’ business — not to see who can charge the most in surprise fees,” Buttigieg said.
It will require that airlines list and explain all extra fees “clearly, conspicuously, and accurately” on their web platforms or when they provide fare prices offline.
This junk fee transparency rule also includes a provision to eliminate “discount bait-and-switch tactics,” the practice of offering discounts that may appear to apply to the whole flight price but really just apply to a smaller portion of the price.
The White House’s Wednesday announcements come after several airline incidents involving Boeing plane malfunctions that have spurred regulatory probes and forced major carriers like Southwest, Alaska Airlines and United to reevaluate their business expectations.
Last week, Buttigieg said the White House would partner with state attorneys to accelerate the response to customer complaints against airline and ticket agencies. Technically, only the federal government has the power to enforce passenger protections even though state attorneys receive many reports of customer grievances.
Along with the finalized rules announced Wednesday, the White House is also proposing rules to ban extra seating fees for parents trying to sit next to their children, to make certain amenities mandatory and to expand accommodations for passengers who use wheelchairs.
The new airline rules are the latest action in President Joe Biden’s broader battle against what the White House calls “corporate rip-offs.”
“There are tens of billions of dollars in other junk fees across the economy, and I’ve directed my administration to reduce or eliminate them,” Biden said in 2022.
That directive has turned into a multifront crackdown on hidden fees from different government agencies targeting various sectors including banking, cable and financial products like retirement savings accounts.
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