Refunds and Other Consumer Protections, 32760-32839 [2024-07177]
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Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules and Regulations
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Parts 259, 260, 262, and 399
[Docket No. DOT–OST–2022–0089 and
DOT–OST–2016–0208]
RIN 2105–AF04
Refunds and Other Consumer
Protections
Office of the Secretary (OST),
Department of Transportation.
ACTION: Final rule.
AGENCY:
The U.S. Department of
Transportation (Department or DOT) is
requiring automatic refunds to
consumers when a U.S. air carrier or a
foreign air carrier cancels or makes a
significant change to a scheduled flight
to, from, or within the United States and
the consumer is not offered or rejects
alternative transportation and travel
credits, vouchers, or other
compensation. These automatic refunds
must be provided promptly, i.e., within
7 business days for credit card payments
and within 20 calendar days for other
forms of payment. To ensure consumers
know when they are entitled to a
refund, the Department is requiring
carriers and ticket agents to inform
consumers of their right to a refund if
that is the case before making an offer
for alternative transportation, travel
credits, vouchers, or other
compensation in lieu of refunds. Also,
the Department is defining, for the first
time, the terms ‘‘significant change’’ and
‘‘cancellation’’ to provide clarity and
consistency to consumers with respect
to their right to a refund. The
Department is also requiring refunds to
consumers for fees for ancillary services
that passengers paid for but did not
receive and for checked baggage fees if
the bag is significantly delayed. For
consumers who are unable to or advised
not to travel as scheduled on flights to,
from, or within the United States
because of a serious communicable
disease, the Department is requiring that
carriers provide travel vouchers or
credits that are transferrable and valid
for at least 5 years from the date of
issuance. Carriers may require
consumers to provide documentary
evidence demonstrating that they are
unable to travel or have been advised
not to travel to support their request for
a travel voucher or credit, unless the
Department of Health and Human
Services (HHS) publishes guidance
declaring that requiring such
documentary evidence is not in the
public interest.
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SUMMARY:
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This rule is effective June 25,
2024. Upon OMB approval of the
information collection established in
this final rule, the Department will
publish a separate notice announcing
the effective date of the collection.
FOR FURTHER INFORMATION CONTACT:
Clereece Kroha or Blane Workie, Office
of Aviation Consumer Protection, U.S.
Department of Transportation, 1200
New Jersey Ave. SE, Washington, DC,
20590, 202–366–9342 (phone),
clereece.kroha@dot.gov or
blane.workie@dot.gov (email).
SUPPLEMENTARY INFORMATION:
DATES:
Executive Summary
(1) Purpose of the Regulatory Action
The purpose of this final rule is to
ensure that consumers are treated fairly
when they do not receive service that
they paid for or are unable or advised
not to travel because of a serious
communicable disease. This rule
responds to Executive Order 14036 on
Promoting Competition in the American
Economy (E.O. 14036), which was
issued on July 9, 2021.1 The Executive
Order launched a whole-of-government
approach to strengthen competition and
requires the Department to take various
actions to promote the interests of
American consumers, workers, and
businesses.
Section 5, paragraph(m)(i)(C) of E.O.
14036 directs the Department to submit
a report to the White House Competition
Council on the progress of its
investigatory and enforcement activities
to address the failure of airlines to
provide timely refunds for flights
cancelled as a result of the COVID–19
pandemic. The Department submitted
its report to the White House in
September 2021.2 In that report, the
Department explained that the lack of
definition regarding cancelled or
significantly changed flights had
resulted in inconsistency among carriers
on when passengers are entitled to a
refund. The Department also noted that
approximately 20% of the refund
complaints received during the first 18
months of the COVID–19 pandemic
involved instances in which passengers
with non-refundable tickets chose not to
travel given the COVID–19 pandemic
and stated that it planned to address
1 Exec.
Order No. 14036, 86 FR 36987 (Jul. 9,
2021).
2 Report to the White House Competition Council:
U.S. Department of Transportation’s Investigatory,
Enforcement and Other Activities Addressing Lack
of Timely Airline Ticket Refunds Associated with
the COVID–19 Pandemic (Refund Report)
(September 9, 2021) at https://
www.transportation.gov/individuals/aviationconsumer-protection/dot-report-airline-ticketrefunds.
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protections for these consumers in a
rulemaking.3
The Executive Order in Section 5,
paragraph(m)(i)(D) further directs the
Department to publish a notice of
proposed rulemaking requiring airlines
to refund baggage fees when a
passenger’s luggage is substantially
delayed and to refund other ancillary
fees when passengers pay for a service
that is not provided.
(2) Background
The FAA Extension, Safety, and
Security Act of 2016 (FAA Extension
Act or Act) requires the Department to
issue a rule mandating that airlines
provide refunds to passengers for any
fee charged to transport a checked bag
if the bag is delayed as specified in the
Act.4 On October 31, 2016, the
Department published an advance
notice of proposed rulemaking
(ANPRM) seeking comment on various
issues related to the requirement for
airlines to refund checked baggage fees
when they fail to deliver the bags in a
timely manner as provided by the FAA
Extension Act.5 On July 21, 2021, the
Department published a notice of
proposed rulemaking titled ‘‘Refunding
Fees for Delayed Checked Bags and
Ancillary Services That Are Not
Provided’’ (Ancillary Fee Refund
NPRM).6 Among other things, the
Ancillary Fee Refund NPRM proposed
that U.S. and foreign air carriers refund
the baggage fee paid for a checked bag
when they fail to deliver the bag to the
passenger within 12 hours of the arrival
of a domestic flight and within 25 hours
of the arrival of an international flight.
This NPRM further proposed ways to
measure the length of the baggage
delivery delay for the purpose of
determining whether a refund is due. In
addition, the Ancillary Fee Refund
NPRM also proposed to implement a
provision in the FAA Reauthorization
Act of 2018 regarding refunding fees for
ancillary services that are paid for but
not provided.7
The Department received a total of 29
comments on the Ancillary Fee Refund
NPRM—three comments from consumer
rights advocacy groups,8 16 comments
from U.S. and foreign airlines and
airline trade associations,9 three
3 Refund
Report at pages 11–12.
FAA Extension, Safety, and Security Act of
2016, Pub. L. 114–190, July 15, 2016; 49 U.S.C.
41704 note.
5 81 FR 75347 (October 31, 2016).
6 86 FR 38420 (July 21, 2021).
7 49 U.S.C. 42301 note prec.
8 Business Travel Coalition et. al.,
FlyersRights.org, and Travelers United.
9 Airlines for America, International Air
Transport Association, Arab Air Carriers’
4 See
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comments from ticket agent trade
associations,10 five comments from
individual consumers, one comment
from the Colorado Attorney General,
and one comment from an ancillary
service provider.11 Overall, the
commenters provided various
suggestions on how the Department
should interpret and implement the
statutory mandate. Airlines asserted
they would face challenges to comply
with certain aspects of the proposed
baggage delivery deadlines and other
requirements, while consumers and
ticket agents supported a more stringent
standard under which a refund of
baggage fees is due.
In a separate effort to enhance air
travel consumer protection, on August
22, 2022, the Department published in
the Federal Register a notice of
proposed rulemaking titled ‘‘Airline
Ticket Refunds and Consumer
Protections’’ (Ticket Refund NPRM) to
propose measures to enhance
protections for consumers when airlines
cancel or make significant changes to
the scheduled itineraries to, from, or
within the United States.12 Currently,
the Department’s regulations in 14 CFR
part 259 require that airlines provide
prompt refunds ‘‘when ticket refunds
are due.’’ Further, the Department’s
regulations in 14 CFR part 399 require
that ticket agents ‘‘make proper refunds
promptly when service cannot be
performed as contracted.’’ The
Department’s Office of Aviation
Consumer Protection has interpreted
these requirements and its statutory
authority to prohibit unfair and
deceptive practices as mandating
airlines and ticket agents provide
prompt refunds to passengers of both
the airfare and fees for prepaid ancillary
service fees if a flight is cancelled or
significantly changed and the passenger
does not continue his or her travel. The
Ticket Refund NPRM proposed to codify
the interpretation that when carriers
cancel flights or make significant
changes to flight itineraries and the
contracted service is not provided,
ticket refunds are due if consumers do
Association, Association of Asian Pacific Airlines,
National Air Carrier Association, Regional Airline
Association, Allegiant Air, Air New Zealand,
Condor Flugdienst GmbH, COPA Airlines, Emirates,
Kuwait Airways, Qatar Airways, Spirit Airlines,
United Airlines, and Virgin Atlantic.
10 American Society of Travel Advisors and
Travel Technology Association (Travel Technology
Association submitted two comments).
11 Panasonic Avionics Corporation.
12 87 FR 51550 (August 22, 2022). Prior to
publication in the Federal Register, on August 3,
2022, the NPRM was publicly available at https://
www.transportation.gov/airconsumer/latest-news
and at https://www.regulations.gov, docket number
DOT–OST–2022–0089.
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not accept the alternative transportation
offered by carriers or ticket agents. It
also proposed to define ‘‘significant
change of flight itinerary’’ and
‘‘cancelled flight’’ to protect consumers
and ensure consistency among carries
and ticket agents regarding when
passengers are entitled to refunds.
The Ticket Refund NPRM also
proposed to require airlines and ticket
agents to issue non-expiring travel
credits or vouchers, and under certain
circumstances, refunds in lieu of the
travel credits or vouchers, to consumers
when they: (1) are restricted or
prohibited from traveling by a
governmental entity due to a serious
communicable disease (e.g., as a result
of a stay at home order, entry restriction,
or border closure); (2) are advised by a
medical professional or determine
consistent with public health guidance
issued by the Centers for Disease
Control and Prevention (CDC),
comparable agencies in other countries,
or the World Health Organization
(WHO) not to travel during a public
health emergency to protect themselves
from a serious communicable disease; or
(3) are advised by a medical
professional or determine consistent
with public health guidance issued by
CDC, comparable agencies in other
countries, or WHO not to travel,
irrespective of any declaration of a
public health emergency, because they
have or may have contracted a serious
communicable disease and their
condition would pose a direct threat to
the health of others. Under the
Department’s current regulations, there
is no requirement for an airline or a
ticket agent to issue a refund or travel
credit to a passenger holding a nonrefundable ticket when the airline
operated the flight and the passenger
does not travel, regardless of the reason
that the passenger does not travel. The
Ticket Refund NPRM’s proposals were
intended to protect consumers’ financial
interests when the disruptions to their
travel plans were caused by public
health concerns beyond their control,
and also to promote safe and adequate
air transportation by incentivizing
individuals to postpone travel when
they are advised by a medical
professional or determine, consistent
with public health guidance, not to
travel to protect themselves from a
serious communicable disease or
because they have or may have a serious
communicable disease that would pose
a threat to others.
Between August 2022 and January
2023, the Aviation Consumer Protection
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Advisory Committee (ACPAC) 13
devoted substantial time in three
separate meetings to discuss the Ticket
Refund NPRM. At an all-day public
meeting on August 22, 2022, the ACPAC
heard the perspectives of consumer
advocates, airline and ticket agent
representatives, and members of the
public. Then, on December 9, 2022, the
ACPAC identified and deliberated on
potential recommendations on the
Ticket Refund NPRM. The ACPAC
voted on these recommendations at a
meeting held on January 12, 2023.
The Department initially provided a
comment period of 90 days on the
Ticket Refund NPRM (i.e., until
November 21, 2022). In September 2022,
Airlines for America (A4A), the
International Air Transport Association
(IATA), the Travel Technology
Association (Travel Tech), the American
Society of Travel Advisors (ASTA), and
the Travel Management Coalition
requested an extension of the comment
period.14 The Department extended the
comment period to December 16, 2022.
In extending the comment period for an
additional 25 days, the Department
acknowledged that the NPRM raised
important issues that required in-depth
analysis and consideration by the
stakeholders. The Department also
noted that the ACPAC was expected to
meet on December 9 to deliberate on
what, if any, recommendations it would
make to the Department regarding this
rulemaking and its belief that extending
the comment period of the NPRM for
one week after the ACPAC meeting
would provide the public an
opportunity to consider and provide
comment on any recommendations of
the ACPAC.
On December 16, 2022, A4A and
IATA filed a petition to request a public
hearing on the NPRM pursuant to the
Department’s regulation on
discretionary rulemaking relating to
unfair and deceptive practices at 14 CFR
399.75. The Department granted the
request and conducted a public hearing
on March 21, 2023, to afford A4A,
IATA, and other stakeholders an
opportunity to present certain factual
13 The ACPAC is a statutorily required Federal
advisory committee that evaluates current aviation
consumer protection programs. It also provides
recommendations to the Secretary for improving
and establishing additional consumer protection
programs that may be needed. Information about
ACPAC is available at https://www.regulations.gov/
docket/DOT-OST-2018-0190.
14 In the request for extension of comment period
by the airline representatives, they included various
questions arising from the NPRM for which they
sought clarifications from the Department. The
Department responded to these questions and
placed the responses in the docket for this
rulemaking at DOT–OST–2022–0089.
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issues that they asserted are pertinent to
the Department’s decision on the
rulemaking. At the hearing, the
Department heard from various
stakeholders and subject matter experts
on three issues regarding the Ticket
Refund NPRM: (1) whether consumers
can make reasonable self-determinations
regarding contracting a serious
communicable disease; (2) whether the
documentation requirement (medical
attestation and/or public health
guidance) is sufficient to prevent fraud;
and (3) how to determine whether a
downgrade of amenities or travel
experiences qualifies as a ‘‘significant
change of flight itinerary.’’ The
Department reopened the comment
period for seven days after the hearing
to allow the public the opportunity to
provide comments on issues discussed
at the hearing.
The Department received over 5,300
comments on the Ticket Refund NPRM
from consumer rights advocacy groups,
comments received during the March
2023 hearing and the recommendations
of the ACPAC. The Department is now
issuing a combined final rule for the
Ticket Refunds NPRM and the Ancillary
Fee Refund NPRM to significantly
strengthen protections for consumers
seeking refunds of: (1) airline tickets
when an airline cancels or significantly
changes a flight, and the consumer
rejects or is not offered alternative
transportation; (2) checked bag fees
when bags are significantly delayed; and
(3) ancillary services fees when
consumers pay for services, such as WiFi, that are not provided. In addition,
this final rule provides protections for
consumers who are unable or advised
not to travel because of a serious
communicable disease by requiring that
carriers provide these consumers travel
vouchers or credits that are transferrable
and valid for at least 5 years from the
date of issuance.
(3) Summary of Major Provisions
Subject
Final rule
Definition of Cancelled Flight ..............................
Amend 14 CFR part 399 and add 14 CFR part 260 to define cancelled flight as a flight that
was published in a carrier’s Computer Reservation System (CRS) at the time of the ticket
sale but not operated by the carrier.
Amend 14 CFR part 399 and add 14 CFR part 260 to define significant change of flight
itinerary as a change to the itinerary made by a carrier where:
(1) the passenger is scheduled to depart from the origination airport three hours or more (for
domestic itineraries) or six hours or more (for international itineraries) earlier than the original scheduled departure time;
(2) the passenger is scheduled to arrive at the destination airport three hours or more (for domestic itineraries) or six hours or more (for international itineraries) later than the original
scheduled arrival time;
(3) the passenger is scheduled to depart from a different origination airport or arrive at a different destination airport;
(4) the passenger is scheduled to travel on an itinerary with more connection points than that
of the original itinerary;
(5) the passenger is downgraded to a lower class of service;
(6) the passenger with a disability is scheduled to travel through one or more connecting airports that differ from the original itinerary; or
(7) the passenger with a disability is scheduled to travel on a substitute aircraft that results in
one or more accessibility features needed by the passenger being unavailable.
Add 14 CFR part 260 to require U.S. and foreign air carriers that are the merchants of
record 15 of the ticket transactions to provide prompt refunds when they are due, including
for codeshare and interline itineraries.
Amend 14 CFR part 399 to require ticket agents that are merchants of record of the airline
ticket transactions to provide prompt ticket refunds when they are due.16
Amend 14 CFR parts 259 and 399 to require U.S. and foreign airlines and ticket agents inform
consumers that they are entitled to a refund of the ticket if that is the case before making an
offer for alternative transportation or travel credits, vouchers, or other compensation in lieu
of refunds.
Add 14 CFR part 260 to require U.S. and foreign airlines to provide prompt notifications to
consumers affected by a cancelled or significantly changed flight of their right to a refund of
the ticket and ancillary fees due to airline-initiated cancellations or significant changes, any
offer of alternative transportation or travel credit, vouchers, or other compensation in lieu of
a refund, and airline policies on refunds and rebooking when consumers do not respond to
carriers’ offers of alternative transportation or travel credit, vouchers, or other compensation
in lieu of a refund.
Amend 14 CFR parts 259 and 399 and add 14 CFR part 260 to specify ‘‘prompt’’ ticket refund
means:
(1) Airlines and ticket agents provide refunds for tickets purchased with credit cards within 7
business days of refunds becoming due; and
(2) Airlines and ticket agents refund tickets purchased with payments other than credit cards
within 20 calendar days of refunds becoming due.
Define ‘‘business days’’ to mean Monday through Friday excluding Federal holidays in the
United States.
Definition of
Itinerary.
Significant
Change
of
Flight
Entity Responsible for Refunding Airline Tickets
Notification of Right to Refund ............................
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airlines and airline trade associations,
ticket agents and ticket agent trade
associations, academic researchers,
State attorneys general, and individual
consumers. Of the 5,300 comments,
approximately 4,600 comments are from
individual consumers or consumer
organizations, while approximately 24
comments are from airline
representatives and 650 comments are
from those representing ticket agents.
Almost all consumer commenters
expressed strong support of the
Department’s proposals to enhance
aviation consumer protection. The
industry commenters raised various
concerns about the NPRM proposals,
supporting some while urging the
Department to reconsider or revise
others.
The Department has carefully
reviewed and considered the comments
on the Ancillary Fee Refund NPRM and
the Ticket Refund NPRM received in the
rulemaking dockets, as well as
‘‘Prompt’’ Ticket Refund ......................................
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Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules and Regulations
Subject
Final rule
Automatic Refunds of Airline Tickets ..................
Add 14 CFR part 260 to require carriers who are the merchants of record to provide automatic
ticket refunds when:
(1) a carrier cancels a flight and does not offer alternative transportation or travel credits,
vouchers, or other compensation for the canceled flight in lieu of a refund;
(2) a carrier significantly changes a flight and the consumer rejects the significantly changed
flight itinerary and the carrier does not offer alternative transportation or offer travel credits,
vouchers, or other compensation in lieu of a refund;
(3) a consumer rejects the significantly changed flight or alternative transportation offered as
well as travel credits, vouchers, or other compensation offered for a canceled flight or a significantly changed flight itinerary in lieu of a refund;
(4) a carrier offers a significantly changed flight or alternative transportation for a significantly
changed flight itinerary or a canceled flight, but the consumer does not respond to the transportation offered on or before a response deadline set by the carrier and does not accept
any offer of travel credits, vouchers, or other compensation, and the carrier’s policy is to
treat a lack of a response as a rejection of the alternative transportation offered;
(5) a carrier does not offer a significantly changed flight or alternative transportation for a significantly changed flight itinerary or a canceled flight but offers travel credits, vouchers, or
other compensation in lieu of a refund, and the consumer does not respond to the alternative compensation offered on or before a reasonable response date in which case the
lack of a response is deemed a rejection; or
(6) a carrier offers a significantly changed flight or alternative transportation for a significantly
changed flight itinerary or a canceled flight and offers travel credits, vouchers, or other compensation in lieu of a refund and the carrier has not set a deadline to respond, the consumer does not respond to the alternatives offered, and the consumer does not take the
flight.
Carriers may set a reasonable deadline for a consumer to accept or reject a significant
change to a flight or an offer of alternative transportation following a significant change or a
cancellation.
Carriers that set a deadline must establish, publish, and adhere to a policy regarding whether
consumers not responding to a significant change or an offer of alternative transportation
following a significant change or cancellation before the carrier’s deadline would: (1) have
their reservations cancelled and receive a refund; or (2) maintain their reservations and forfeit the right to a refund.
Add 14 CFR part 260 to require U.S. and foreign airlines that are merchants of record for the
checked bag fee or if a ticket agent is the merchant of record for the checked bag fee, the
carrier that operated the last flight segment to provide automatic refunds of checked baggage fees when they fail to deliver checked bags in a timely manner:
(1) For domestic itineraries, a refund of baggage fee is due when an airline fails to deliver the
checked bag within 12 hours of the consumer’s flight arriving at the gate and the consumer
has filed a Mishandled Baggage Report.
(2) For international itineraries where the flight duration of the segment between the United
States and a point in a foreign country is 12 hours or less, a refund of baggage fee is due
when the airline fails to deliver the checked bag within 15 hours of the consumer’s flight arriving at the gate and the consumer has filed a Mishandled Baggage Report.
(3) For international itineraries where the flight duration of the segment between the United
States and a point in a foreign country is over 12 hours, a refund of baggage fee is due
when the airline fails to deliver the checked bag within 30 hours of the consumer’s flight arriving at the gate and the consumer has filed a Mishandled Baggage Report.
Add 14 CFR part 260 to require U.S. and foreign airlines that are merchants of record for the
ancillary service or if a ticket agent is the merchant of record for the ancillary service, the
carrier that failed to provide the ancillary service to provide automatic refunds of ancillary
service fees when a passenger pays for an ancillary service that the airlines fail to provide.
Add 14 CFR part 262 to require U.S. and foreign airlines that are merchants of record for the
ticket transaction or if a ticket agent is the merchant of record, the carrier that operated the
flight to issue travel credits or vouchers, valid for at least five years from the date of
issuance and transferrable, when:
(1) a consumer is advised by a licensed treating medical professional not to travel during a
public health emergency to protect himself/herself from a serious communicable disease,
the consumer purchased the airline ticket before a public health emergency was declared,
and the consumer is scheduled to travel during the public health emergency to or from the
area affected by the public health emergency;
(2) a consumer is prohibited from travel or is required to quarantine for a substantial portion of
the trip by a governmental entity in relation to a serious communicable disease and the consumer purchased the airline ticket before a public health emergency for that area was declared or, if there is no declaration of a public health emergency, before the government
prohibition or restriction for travel to or from that area is imposed; or
(3) a consumer is advised by a licensed treating medical professional not to travel, irrespective of a public health emergency, because the consumer has or is likely to have contracted
a serious communicable disease and would pose a direct threat to the health of others.
Add 14 CFR part 262 to allow U.S. and foreign airlines to require consumers requesting a
credit or voucher for a non-refundable ticket when the flight is still scheduled to be operated
without significant change to provide, as appropriate:
Refunding Fees for Significantly Delayed Bags
Refunding Ancillary Services Fees for Services
Not Provided.
Providing Travel Credits or Vouchers to Consumers Affected by a Serious Communicable
Disease.
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Documentation Requirement
Credits or Vouchers.
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Receiving
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Subject
Final rule
Service Fees by Ticket Agents for Issuing Tickets.
Processing Fees for Issuing Refunds, Credits,
or Vouchers.
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(4) Costs and Benefits
The final rule will reduce
inconsistencies in granting consumers
airline ticket refunds that stem from the
lack of universal definitions for
cancellation and significant itinerary
change. As such, the rule is expected to
reduce the resources consumers need to
expend to obtain the refunds they are
owed. Consumer time savings are
estimated to be about $3.8 million
annually. The rule also implements
2016 and 2018 statutory mandates
pertaining to refunds of fees for delayed
baggage and ancillary services that a
consumer does not receive. The
expected economic impacts of the fee
refund provisions consist of $16.0
million annually in increased refunds to
consumers and $7.1 million annually in
administrative costs for the airlines.
The rule also requires airlines to
provide five-year transferable travel
credits or vouchers to passengers who
cancel travel for reasons related to a
serious communicable disease.
Expected societal benefits, which were
not quantified, are from infected air
passengers who cancel air travel due the
option of receiving the five-year travel
credit and the reduction in exposure of
uninfected passengers to serious
contagious disease. Estimated annual
costs range from $3.4 million to $482.0
million.
15 Merchants of records are the entities shown in
the consumer’s financial charge statements such as
debit or credit card charge statements.
16 Comments from ticket agents assert that ticket
agents appear as merchants of records in less than
10 percent of transactions addressed in this final
rule.
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(1) the applicable government order or other document relating to a serious communicable
disease demonstrating how the passenger is prohibited from travel or is required to quarantine at the destination for a substantial portion of the trip; or
(2) a written statement from a licensed treating medical professional, attesting that it is the
medical professional’s opinion, based on current medical knowledge concerning a serious
communicable disease such as guidance issued by CDC or WHO and the passenger’s
health condition, that the passenger should not travel to protect the passenger from a serious communicable disease or the passenger would pose a direct threat to the health of others if the passenger traveled. This medical statement may only be required in the absence
of HHS guidance declaring that requiring such documentation is not in the public interest.
Amend 14 CFR part 399 to allow ticket agents to retain the service fee charged when issuing
the original ticket if the service provided is for more than processing payment for a flight that
the consumer found and so long as the fee is on a per-passenger basis and the existence,
amount, and the non-refundable nature of the fee if this is the case, is clearly and prominently disclosed to consumers at the time they purchase the airfare.
Retaining Processing Fee for Required Refunds: Add 14 CFR part 260 to prohibit carriers
from retaining a processing fee for issuing required refunds when the carrier cancels or significantly changes a flight.
Processing Fee for Issuing Required Credits or Vouchers: Add 14 CFR part 262 to allow airlines to retain a processing fee from the value of a required travel credit or voucher provided to a passenger due to a serious communicable disease. Airlines (not ticket agents)
are responsible for issuing travel credits or vouchers to eligible consumers whose travel is
affected by a serious communicable disease.
Statutory Authority
The Department is issuing this
rulemaking under its authority to
prohibit unfair or deceptive practices or
unfair methods of competition in air
transportation or the sale of air
transportation pursuant to 49 U.S.C.
41712, its authority to require safe and
adequate interstate transportation
pursuant to 49 U.S.C. 41702, its
authority to mandate that airlines
refund checked baggage fees to
passengers when they fail to deliver
checked bags in a timely manner
pursuant to 49 U.S.C. 41704 note, and
its authority to mandate that airlines
promptly provide a refund to a
passenger of any ancillary fees paid for
services related to air travel that the
passenger does not receive pursuant to
49 U.S.C. 42301 note prec.
Under the Department’s procedural
rule regarding rulemakings relating to
unfair and deceptive practices, 14 CFR
399.75, the Department is required to
provide its reasoning for concluding
that a certain practice is unfair or
deceptive to consumers, as defined in
14 CFR 399.79, when issuing aviation
consumer protection rulemakings that
are not specifically required by statute
and are based on the Department’s
general authority to prohibit unfair or
deceptive practices under 49 U.S.C.
41712. A practice is ‘‘unfair’’ to
consumers if it causes or is likely to
cause substantial injury, which is not
reasonably avoidable, and the harm is
not outweighed by benefits to
consumers or competition.17 Proof of
intent is not necessary to establish
unfairness.18 The elements of unfairness
are further elaborated by the Department
in its guidance document. 19
The Department has determined that
it is an unfair business practice in
violation of section 41712 for airlines or
ticket agents to refuse to refund
passengers when an airline cancels or
significantly changes a flight and
passengers do not accept the offered
alternative transportation or
compensation (e.g., airline credits or
vouchers) in lieu of a refund, regardless
of whether the passenger purchased a
non-refundable ticket. A practice by
airlines or ticket agents of not providing
refunds in such situations substantially
harms consumers because consumers
paid money for services that were not
provided when the airline cancelled or
significantly changed the flight. This
harm is not reasonably avoidable by
consumers as cancellations or
significant changes to their flights are
outside of their control. A reasonable
consumer would not expect that he or
she must pay more to purchase a
refundable ticket to be able to recoup
the ticket price when the airline fails to
provide the service through no action or
fault of the consumer. Also, the tangible
and significant harm to consumers of
not receiving a refund is not outweighed
by benefits to consumers or
competition. The Department
acknowledges that consumers may
benefit from the availability of lower
cost nonrefundable tickets but does not
expect that this requirement would
result in airlines no longer offering
18 14
17 14
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CFR 399.79(b)(1).
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19 87
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CFR 399.79(c).
FR 52677 (August 28, 2022).
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nonrefundable tickets as the term
nonrefundable has generally been
understood not to apply in cases where
airlines cancel or make a significant
change in the service provided.
For airlines, this prohibited unfair
practice includes a carrier’s retention of
a fee to process a required refund or of
a booking fee (i.e., a fee for processing
payment for a flight that the consumer
found) because it is the carrier’s flight
that is significantly changed or
canceled; the Department is deferring
decision on whether the same
prohibition should apply to ticket
agents because ticket agents do not
operate the flight. Further, the
Department has determined that it is an
unfair and deceptive practice in
violation of section 41712 for airlines
and ticket agents to not inform
consumers that they are entitled to a
refund of the ticket and ancillary fees if
that is the case before making an offer
for travel credits, vouchers, or other
compensation in lieu of refunds. Also,
it is an unfair and deceptive practice to
not provide proper disclosures and
notifications to consumers with respect
to: the limitations, restrictions, and
conditions on any travel credits,
vouchers, or other compensation offered
in lieu of refunds; consumers’ rights to
automatic refunds under certain
circumstances; and any airline-imposed
requirements on accepting or rejecting
alternative transportation. Additionally,
to ensure that consumers who
purchased their airline tickets from a
ticket agent receive refunds that are due
in a timely manner, the Department has
determined that it is an unfair practice
for airlines to not confirm a consumer’s
refund eligibility in a timely manner.
The Department’s analysis on why these
actions by airlines or ticket agents
violate section 41712 will be provided
in each section that discusses these
matters in substance.
Similarly, the Department considers it
to be an unfair practice for an airline to
not provide travel credits or vouchers
when (1) a consumer is advised by a
licensed treating medical professional
not to travel to protect himself/herself
from a serious communicable disease
and the consumer purchased the airline
ticket before a public health emergency
affecting the origination or destination
of the consumer’s itinerary was declared
and is scheduled to travel to or from
that area during the public health
emergency; (2) a consumer is prohibited
from traveling or is required to
quarantine for a substantial portion of
the trip by a governmental entity due to
a serious communicable disease (e.g., as
a result of a stay-at-home order, border
closure) affecting the origination or
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destination of the consumer’s itinerary
and the consumer purchased the airline
ticket before a public health emergency
was declared or, if there is no
declaration of a public health
emergency, before the government
prohibition or restriction for travel to
the consumer’s destination or from the
consumer’s origination; or (3) a
consumer is advised by a licensed
treating medical professional consistent
with public health guidance (e.g., CDC
guidance) not to travel to protect others
from a serious communicable disease.
Consumers are substantially harmed
when they pay for a service that they are
unable to use because they were
directed or advised by governmental
entities or a medical professional not to
travel to protect themselves or others
from a serious communicable disease,
and the airline does not provide a travel
credit or voucher. More specifically, the
loss of the value of their tickets is a
substantial harm that is not reasonably
avoidable when consumers purchased
their tickets before the declaration of a
public health emergency and the only
way to avoid the loss of the ticket value
is to disregard a medical professional’s
advice not to travel and risk inflicting
serious health consequences on
themselves. This loss is also not
reasonably avoidable when consumers
purchased their tickets before the
declaration of a public health
emergency that results in the issuance of
communicable disease-related travel
prohibition or restriction or, if there is
no declaration of a public health
emergency, before the government
prohibition or restriction for travel due
to a serious communicable disease and
the only way to avoid the loss of the
ticket value is to disregard direction
from governmental entities. Finally, this
loss of the value of their tickets is not
reasonably avoidable when the only
way to avoid the loss of the ticket value
is to disregard medical professionals’
advice not to travel and risk inflicting
serious health consequences on others.
The tangible and significant harm to
consumers of losing the value of their
ticket is not outweighed by potential
benefits to consumers or competition
because the requirement to provide
travel credits or vouchers would have
minimal, if any, impact on
nonrefundable fares. A public health
emergency affecting travel to, within,
and from the United States in a large
scale is infrequent, and this requirement
applies only to consumers who have
been advised or directed not to travel by
a medical professional or governmental
entity in relation to a serious
communicable disease.
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In addition, the Department considers
it to be an unfair practice for airlines to
not provide travel credits or vouchers to
consumers who are advised by a
medical professional not to travel
because they have or are likely to have
contracted a serious communicable
disease, regardless of whether there is a
public health emergency. Infected
passengers who are unwilling to incur a
financial loss for the airline tickets may
choose to travel despite the infection,
which is likely to cause substantial
harm to other passengers on the flight
by significantly increasing the
likelihood of these passengers,
especially those seated within close
proximity of the infected passenger,
being infected by the communicable
disease. Such harm cannot be
reasonably avoided by these passengers
because they are assigned to sit close to
the infected passenger and may have no
knowledge about the infection by that
passenger. The harm to these
passengers’ health is not outweighed by
any benefits to consumers or
competition. The Department believes
there would not be any benefit to
consumers or competition among
airlines in infected or potentially
infected travelers possibly choosing to
travel by air and infecting other
passengers.
Further, the Department relies on its
authority in 49 U.S.C. 41702 to require
U.S. air carriers to ‘‘provide safe and
adequate interstate air transportation’’ to
establish the requirement that an airline
provide travel credits or vouchers to
consumers who are unable or advised
not travel due to a serious
communicable disease. This final rule
promotes safe and adequate air
transportation by reducing incentives to
travel for individuals who have been
advised against traveling because they
have or are likely to have contracted a
serious communicable disease or
individuals who are particularly
vulnerable to a serious communicable
disease by allowing them to retain the
value of their tickets in travel credits
and postpone travel.
The Department has received
comments from the airlines, ticket
agents, and their trade associations
disputing the Department’s authority to
promulgate the regulation relating to
providing travel credits or vouchers to
passengers whose travel is impacted by
a serious communicable disease. Those
comments and the Department’s
responses are provided in Section IV.1
of this rule preamble.
The requirements in this final rule
regarding airlines refunding baggage
fees when significantly delayed and
refunding ancillary service fees when
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the paid for services are not provided
are specifically required by statute. The
requirement for airlines to refund fees
for checked bags that are significantly
delayed is issued pursuant to the
Department’s authority in 49 U.S.C.
41704 note, which was enacted as part
of the FAA Extension Act (Pub. L. 114–
90) and requires the Department to
promulgate a regulation that mandates
that airlines refund checked baggage
fees to passengers when they fail to
deliver checked bags in a timely
manner.20 The requirement to refund
ancillary fees for air travel related
services that passengers paid for but did
not receive is issued pursuant to the
Department’s authority in 49 U.S.C.
42301 note prec., which was enacted as
part of the FAA Reauthorization Act of
2018 (Pub. L. 115–254) and requires the
Department to promulgate a rule that
mandates that airlines promptly provide
a refund to a passenger of any ancillary
fees paid for services related to air travel
that the passenger does not receive.21
Comments and Responses
I. Refunding Airline Tickets for
Cancelled or Significantly Changed
Flights
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1. Covered Entities, Flights, and
Consumers
The NPRM: The existing requirement
under 14 CFR 259.5 for carriers to adopt
and adhere to a customer service plan,
which includes a commitment to
provide prompt ticket refunds to
passengers when a refund is due,
applies to all scheduled flights of a
certificated or commuter air carrier 22 if
the carrier operates passenger service
using any aircraft originally designed to
have a passenger capacity of 30 or more
seats, and to all scheduled flights to and
from the United States of a foreign
carrier if the carrier operates passenger
service to and from the United States
using any aircraft originally designed to
have a passenger capacity of 30 or more
seats. The Ticket Refund NPRM
proposed to expand the applicability of
20 See Section 2305 of the FAA Extension, Safety,
and Security Act of 2016, Public Law 114–190 (July
15, 2016)).
21 See Section 421 of the FAA Reauthorization
Act of 2018, Public Law 115–254 (October 5, 2018).
22 A certificated air carrier is an air carrier
holding a certificate issued under 49 U.S.C. 41102.
A commuter air carrier is an air carrier as
established by 14 CFR 298.3(b) that carries
passengers on at least five round trips per week on
at least one route between two or more points
according to a published flight schedule, using
small aircraft—i.e., aircraft originally designed with
the capacity for up to 60 passenger seats. See 14
CFR 298.2. Commuter air carriers, along with air
taxi operators, operating under 14 CFR part 298 are
exempted from the certification requirements of 49
U.S.C. 41102.
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the requirement to provide prompt
refunds to a certificated or commuter air
carrier that operates scheduled
passenger service to, within, and from
the United States using aircraft of any
size, and to a foreign carrier that
operates scheduled passenger service to
or from the United States using aircraft
of any size. The Department sought
comments on whether the proposed
expansion of the regulation in section
259.5 to include smaller carriers is
reasonable, and what obstacles, if any,
these smaller carriers may encounter to
compliance.
As for ticket agents,23 the
Department’s rule in 14 CFR 399.80(l)
requires that ticket agents of any size
‘‘make proper refunds promptly when
service cannot be performed as
contracted.’’ The Ticket Refund NPRM
proposed that, like the existing rule on
ticket agents providing refunds, the
proposed refund requirements would
apply to ticket agents of any size but
specified that it would only apply to
ticket agents that sell directly to
consumers for scheduled passenger
service to, from, or within the United
States.
In the NPRM, the Department also
considered whether the applicability of
DOT’s proposed refund requirements
should be limited to sellers of air
transportation located in the United
States and whether the beneficiaries
should be limited to aviation consumers
who are residents of the United States
based on its review of Regulation Z of
the Consumer Financial Protection
Bureau (CFPB), as codified in 12 CFR
part 1026, and the airline refund
regulation in 14 CFR part 374, which
implements the requirement of
Regulation Z with respect to airlines.
The Department recognized that the
regulated entities covered by Regulation
Z for airline ticket transactions with
credit cards may be limited to sellers
located in the United States and that the
protection afforded by Regulation Z may
be limited to consumers who are
residents of the United States with
credit card accounts located in the
United States. The Department also
noted its broad and independent
authority to prohibit unfair or deceptive
practices in air transportation or sale of
air transportation,24 which enables it to
23 A ‘‘ticket agent’’ is defined in 49 U.S.C.
40102(a)(45) to mean a person (except an air carrier,
a foreign air carrier, or an employee of an air carrier
or foreign air carrier) that as a principal or agent
sells, offers for sale, negotiates for, or holds itself
out as selling, providing, or arranging for, air
transportation.
24 Air transportation means foreign air
transportation, interstate air transportation, or the
transportation of mail by aircraft. See 49 U.S.C.
40102 (a)(5).
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cover flights to, within, and from the
United States, irrespective of whether
the consumer holding reservations on
those flights is a resident of the United
States, whether the seller of the airline
ticket is located in the United States, or
whether the transaction takes place in
the United States. The Department
asked for comment on the applicability
of the proposed requirement.
The Department also sought
comments on applicability of the rule to
certain flight segments between two
foreign points if they are on the same
itinerary or ticket with flights to, from,
or within the United States. If adopting
the same itinerary/ticket standard, the
Ticket Refund NPRM asked whether the
refund requirement should only apply
when the entire itinerary/ticket is sold
under a U.S. carrier’s code or whether
it should also apply to itineraries/tickets
that combine flight segments sold under
a U.S. carrier’s code and flight segments
sold under a foreign carrier code
pursuant to an interline agreements.
Comments Received: The Department
received one comment from an
individual stating that including small
carriers operating flights to, from, or
within the United States solely using
aircraft originally designed to have a
passenger capacity of fewer than 30
seats in these regulatory proposals
would place a considerable burden on
these carriers, potentially drive many of
the smaller carriers that provide access
to more remote and distant parts of the
country out of business. The
Department received no comments on
the proposed scope of covered ticket
agents in the Ticket Refund NPRM,
which incorporates the current scope of
ticket agents refund rule in 14 CFR
399.80(l), and the definition for ‘‘ticket
agent’’ in 49 U.S.C. 40102(a)(45).
For the covered tickets/itineraries/
flights under the Ticket Refund NPRM,
IATA and several foreign carriers raised
two concerns. First, they suggested that
applying the rule to all scheduled flights
to, from, or within the United States is
incompatible with regulations from
other jurisdictions such as the European
Union and Canada. They further argued
that the rule should only apply to flight
segments departing a U.S. airport. Air
Canada argued that the scope of the
refund regulation, as proposed, would
cause confusion as refund rules in other
jurisdictions typically apply to
itineraries departing that jurisdiction to
a foreign destination. Air Canada
contended that the Department’s
proposal represents a misalignment
with Canada’s Air Passenger Protection
Regulations (APPR) when both sets of
rules apply to the same itinerary. Air
Canada provides an example that in the
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case of uncontrollable event such as
winter storm causing a cancellation, the
APPR only requires a carrier to refund
if the carrier is not able to rebook the
passenger within 48 hours from the
departure time, whereas the
Department’s proposed rule would
require a refund offer upon flight
cancellation. Second, IATA and several
foreign carriers objected to applying the
rule to certain flight segments between
two foreign points, raising
extraterritoriality concerns. Air Canada
argued that the Department’s attempt to
apply its refund rule extraterritorially
would violate the longstanding
principles of comity and reciprocity of
international aviation agreements and
the bilateral air transport agreement 25
between the United States and Canada.
Consumers and their representatives
are largely in support of a broad scope
of the Ticket Refund NPRM. Travelers
United stated that the European
regulation, EU261, applies to the
scheduled flights of all carriers
departing the European Union to the
United States but only applies to the
scheduled flights of EU carriers
departing the United States to the
European Union. Travelers United
pointed out that, as such, a consumer
traveling from the United States to the
European Union on a flight by a U.S.
carrier, for example, would not be
protected by EU 261. Some individual
consumer commenters argued that the
Department’s refund rule should cover
flights between two foreign points in the
same itinerary to streamline the refund
process for international travel.
Ticket agents also commented on the
scope of itineraries/tickets covered by
the Ticket Refund NPRM. Travel
Management Coalition suggested that
the refund rule should apply only to
ticket transactions with a point of sale
in the United States. Travel Technology
Association (Travel Tech) echoed the
‘‘point of sale’’ approach and added that
this approach is a bright-line and widely
used industry standard as the Global
Distribution Systems (GDSs) denote the
point of sale on all their ticket
transactions. Travel Tech suggested that
this approach would make the
implementation of any final rules easier
for the regulated entities.
U.S. Travel Association stated that the
refund requirement should be limited to
flights to, from, or within the United
25 As support for its position, Air Canada
references Article 12.1 of the Air Transport
Agreement Between the Government of Canada and
the Government of the United States, which states
‘‘While entering, within, or leaving the territory of
one Party, its laws and regulations relating to the
operation and navigation of aircraft shall be
complied with by the other Party’s airlines.’’
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States purchased by consumers residing
in the United States. It argued that this
approach is consistent with CFPB’s
interpretation of Regulation Z and the
Department’s proposed rule on
Transparency of Ancillary Fees, which
proposes that the consumer protection
measures relating to disclosure apply to
websites ‘‘marketed to United States
customers’’ and ‘‘tickets purchased by
consumers in the United States.’’
DOT Response: The Department has
determined that it is appropriate to
include within the scope of covered
carriers with respect to the ticket refund
requirements U.S. and foreign air
carriers operating scheduled flights to,
from, or within the United States solely
using aircraft originally designed to
have a passenger capacity of fewer than
30 seats. The Department notes that the
new ticket refund regulations in part
260, which provide clarity on various
issues related to refunds, do not add
new burdens to these carriers as they are
already covered under 14 CFR part 374
with respect to refunds for credit card
purchases. The applicability provision
in 14 CFR 374.2 states that ‘‘this part is
applicable to all air carriers and foreign
air carriers engaging in consumer credit
transactions.’’ Also, the Department’s
Office of Aviation Consumer Protection
has for many years interpreted 49 U.S.C.
41712 as requiring all carriers to provide
prompt refunds when due irrespective
of the form of ticket purchase payment.
The Department has carefully
considered airlines’ argument that the
proposed scope of covered flights for
airline ticket refunds (i.e., scheduled
flights to, from, or within the United
States) would potentially result in some
flights being subject to refund rules of
multiple jurisdictions, causing
complexity to carriers’ compliance and
potential consumer confusion. The
Department is not convinced that any
potential compliance complexity or
consumer confusion arising from these
situations cannot be addressed by
carriers offering all the accommodations
required by the applicable regulations
so consumers can choose the option that
best suits their needs. For instance, the
Department does not see any conflict of
law in the example provided by Air
Canada. APPR, which applies to all
flights to, from, and within Canada,26
requires airlines to provide a passenger
affected by a cancellation or a lengthy
delay due to a situation outside the
airline’s control with a confirmed
reservation on the next available flight
that is operated by the carrier or a
26 https://otc-cta.gc.ca/eng/publication/
application-air-passenger-protection-regulations-aguide.
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partner airline, leaving within 48 hours
of the departure time indicated on the
passenger’s original ticket; if the airline
cannot provide a confirmed reservation
within this 48-hour period, it will be
required to provide, at the passenger’s
choice, a refund or rebooking. Both the
APPR requirement and the Department’s
refund requirement would apply to a
flight between the United States and
Canada. Under the regulation finalized
here, the carrier would be required to
refund the affected passenger if the
flight is cancelled or delayed for more
than six hours and the consumer rejects
the alternative offered or an alternative
is not offered. In this situation, the
carrier would be expected to offer the
passenger the choice of a refund and a
choice of rebooking on a flight departing
within 48 hours if such flight exists.
Providing consumers such choices
would satisfy the requirements of both
U.S. and Canadian regulations.
The Department notes that airlines
operating international air
transportation are subject to rules from
multiple jurisdictions in many other
areas, such as oversales and disability.
The Department does not believe there
is a conflict of law in ticket refunds
which makes it impossible for carriers
to comply with laws of multiple
jurisdictions. The Department expects
that U.S. and foreign air carriers
operating scheduled flights to, from, and
within the United States will fully
comply with the refund regulations to
which they are subject, consistent with
the bilateral agreements between the
United States and other countries. Such
compliance will result in consumers
benefiting from having more choices
when their flights are canceled or
significantly changed by airlines.
We have also considered the
comments on the scope of ‘‘air
transportation’’ for tickets that include
flight segments between two foreign
points. The Department has determined
that the refund requirements would
cover these flight segments that are on
a single ticket/itinerary to or from the
United States without a break in the
journey. Congress has authorized the
Department to prevent unfair or
deceptive practices or unfair methods of
competition in ‘‘air transportation,’’ 49
U.S.C. 41712(a), and ‘‘air
transportation’’ is defined to include
‘‘foreign air transportation.’’ 27 The
27 Foreign air transportation ‘‘means the
transportation of passengers or property by aircraft
as a common carrier for compensation, or the
transportation of mail by aircraft, between a place
in the United States and a place outside the United
States when any part of the transportation is by
aircraft.’’ See 49 U.S.C. 40102(a)(23).
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Department has concluded that ‘‘foreign
air transportation’’ includes journeys to
or from the United States with brief and
incidental stopover(s) at a foreign point
without breaking the journey. We
believe this approach fully addresses
the extraterritoriality concerns raised by
some carriers and is consistent with the
Department’s general approach adopted
in this final rule of considering
domestic segments of international
itineraries as a part of the international
journey. While the Department is not
providing an exhaustive list of what a
stopover that would break the journey
is, it is setting an outer limit by treating
any deliberate interruption of a journey
at a point between the origin and
destination that is scheduled to exceed
24 hours on an international itinerary to
be a break in the journey.28
Besides this bright-line outer limit, to
determine whether a stopover under 24
hours at a foreign point breaks the
journey between a point in the United
States and a point in a foreign country,
the Department would view factors
including whether the whole itinerary
was purchased in one single transaction,
whether the segment between two
foreign points is operated or marketed
by a carrier that has no codeshare or
interline agreement with the carrier
operating or marketing the segment to or
from the United States, and whether the
stopover at a foreign point involves the
passenger picking up checked baggage,
leaving the airport, and continuing the
next segment after a substantial amount
of time.
The Department has also determined
that it is appropriate to apply the refund
and other consumer protection
regulations finalized here to all tickets/
itineraries to, from, or within the United
States regardless of the point of sales or
the residency of the consumers. While
recognizing that Regulation Z applies
only to credit card transactions that take
place in the United States involving
residents of the United States, the
Department’s authority to prohibit
unfair or deceptive practices in air
transportation under 49 U.S.C. 41712
goes beyond this scope with respect to
the type and location of the transactions
and the residency of consumers. The
Department has made the policy
decision to exercise its broad authority
under section 41712 to ensure that its
ticket and ancillary service fee refunds
requirements and the protections for
passengers affected by a serious
communicable disease provide the
28 See definitions for common terms in air travel
at https://www.transportation.gov/sites/dot.gov/
files/docs/Common%20Terms%20in%20Air%20
Travel.pdf.
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maximum protections to consumers as
permitted by the law. The Department
also believes that this broad scope
would simplify and streamline the
refund process by the regulated entities
and reduce consumer frustration and
confusion.
2. Need for a Rulemaking
The NPRM: The NPRM is intended to
prevent unfair or deceptive practices by
airlines and ticket agents when airlines
cancel or make significant changes to
flights. Under the Department’s existing
regulations, airlines have an obligation
to provide prompt refunds when
refunds are due, but a specific reference
to refunding airfare due to a canceled or
significantly changed flight is not
codified in the regulations. Also, today,
airlines are permitted to adopt their own
standards for ‘‘cancellation’’ and
‘‘significant change,’’ which has
resulted in lack of consistency from
airline to airline and passenger
confusion about their rights, particularly
during periods of significant air travel
disruptions such as the COVID–19
pandemic when refund requests
overwhelmed the industry. As noted in
the NPRM, the Department received a
significant number of complaints
against airlines and ticket agents for
refusing to provide a refund or for
delaying processing of refunds during
the COVID–19 pandemic. In issuing the
NPRM, the Department explained that
its existing regulations on refunds made
it difficult to monitor compliance and
enforce refund requirements and
described benefits of strengthening
protections for consumers to obtain a
prompt refund when airlines cancel or
significantly change flight schedules.
Comments Received: Virtually all
consumers and consumer rights
advocacy groups that commented on the
NPRM are in support of the Department
exercising its legal authority under
section 41712 to codify the
Department’s longstanding enforcement
policy requiring airlines and ticket
agents to provides refunds when airlines
cancel or make a significant change to
a flight itinerary. They also strongly
support the proposal to define
‘‘cancellation’’ and ‘‘significant change’’
to eliminate the inconsistencies among
airline policies that are the main sources
of consumer frustration. FlyersRights
commented that some airlines’ behavior
during the COVID–19 pandemic to
retroactively extend the length of delay
that would qualify affected consumers
for a refund is strong evidence for the
need of rulemaking. In addition to
supporting the proposals in this area,
approximately 500 individual
consumers expressed their view that the
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NPRM does not go far enough in terms
of consumer protection, with over 300
commenters explicitly suggesting that
the Department adopt regulation
mandating airlines to compensate
consumers for incidental costs (e.g.,
meals, hotels, ground transportation)
associated with airline cancellations or
significant changes, similar to the
European Union Regulation EC261/2004
(EC261). National Consumers League
noted that this additional consumer
protection measure would mitigate
consumer inconveniences and
incentivize airlines to invest in
maintaining operations according to the
published schedules.
Among airline commenters, A4A
expressed support for codifying the
refund policy and adopting definitions
for ‘‘cancellation’’ and ‘‘significant
change’’ but disagreed with some
components of the proposed definitions.
The National Air Carrier Association
(NACA) stated that the Department
should simply codify the current policy
without adopting definitions for
‘‘cancellation’’ and ‘‘significant
change.’’ IATA and several airline
commenters asserted that it is not
necessary to promulgate a new rule
because airlines were already providing
refunds pre-COVID–19 pandemic, as
evidenced by the relatively small
numbers of complaints on refunds at
that time. They contended that the
Department should not rely on a oncein-a-lifetime event (i.e., the COVID–19
pandemic) as the justification for a
rulemaking. They pointed out that
airlines have issued unprecedented
amounts of refunds during the
pandemic and in cases where they
failed to do so, the Department’s
enforcement actions under the current
rule have proven that rulemaking is
unnecessary. IATA’s comment
recognized that standardizing
definitions would provide consistency
in passenger experiences and avoid
consumer confusion, although it argued
that allowing airlines to define these
terms provides greater flexibility, fosters
competition, and helps maximize value
for consumers. The Association of Asian
and Pacific Airlines (AAPA) expressed
its view that the refund requirement
should exempt situations where
cancellations and significant changes
are caused by safety or security-related
reasons including pandemics and when
large scale disruptions or ‘‘force
majeure’’ such as unannounced border
closures and restrictions by
governments occur.
Ticket agents and their trade
associations are generally in support of
the proposals on codification of the
refund enforcement policy and adopting
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definitions for ‘‘cancellation’’ and
‘‘significant change.’’ Many ticket agent
commenters share the Department’s
view that these proposals mitigate
consumer confusion caused by different
airline refund policies and enhance
predictability regarding refund rights.
However, U.S. Travel Association, an
organization representing various
components of the U.S. travel industry,
including some ticket agents, opposed
the proposals on refunds due to airline
cancellation and significant change,
arguing that the proposals do not
address the root causes of flight delays
and cancellations and would have
unintended consequences of higher
costs for travel and reduced options for
consumers.
The Department also received a joint
comment by 32 State Attorneys General
supporting the Department’s proposal
but also urging, among other things, that
the Department: (1) work on a
partnership with States to enforce
consumer protection rules, (2) require
airlines to sell tickets only for flights
they have adequate staff to operate, (3)
impose significant penalties for airline
cancellations or lengthy delays not
caused by weather or other unavoidable
reasons, and (4) require airlines to
compensate consumers affected by
cancellations or delays, including
compensating for the cost of meals,
hotels, flights on another airline, rental
cars, and issuing partial refunds to
consumers who took the alternative
flight that is later, longer, or otherwise
of less value.
The Department’s Aviation Consumer
Protection Advisory Committee, after
discussing the Department’s proposals
on refunds related to airline
cancellation and significant change
during several meetings, unanimously
recommended that the Department
codify its longstanding policy to require
airlines and ticket agents to provide
prompt refunds to consumers when
airlines cancel or make a significant
change to flight itineraries and
consumers do not accept alternative
transportation offered by airlines or
ticket agents. The member representing
airlines noted that the airlines’ support
on this recommendation is limited to
adopting a rule that codifies the
Department’s current policy.
DOT Response: The Department
continues to be concerned about the
lack of regulatory clarity regarding
airlines’ obligation to provide prompt
refunds when airlines cancel or make
significant changes to flights and the
impact that this lack of regulatory
clarity has on airlines’ compliance and
the ability of the Department’s Office of
Aviation Consumer Protection to take
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enforcement action despite the
Department’s statutory authority to
prohibit unfair and deceptive practices.
As described in the Statutory Authority
section, the Department believes that an
airline’s or ticket agent’s practice of not
providing a prompt refund when an
airline cancels or significantly changes
a passenger’s flight and the passenger
does not accept the alternative offered
causes substantial harm to consumers,
the harm is not reasonably avoidable,
and the harm is not outweighed by
benefits to consumers or competition.
As such, the Department concludes that
its existing regulatory structure on
refunds should be enhanced to better
protect consumers.
The Department also agrees with
comments from ticket agent
representatives and others that
definitions for ‘‘cancellation’’ and
‘‘significant change of flight itinerary’’
mitigate consumer confusion caused by
different airline refund policies and
enhance predictability regarding refund
rights. As the Department stated in the
Ticket Refund NPRM, the consumer
complaints received by the Department
during the COVID–19 pandemic
demonstrated that various airline
definitions for these terms have caused
a great level of consumer harm in terms
of frustration and confusion. The
Department agrees with FlyersRights
that a lack of a uniform standard on the
meaning of a cancellation and
significant change has resulted in
certain airlines improperly revising and
applying less consumer-friendly refund
policies during periods when flight
cancellations and changes spike, which
is strong evidence of the need of
rulemaking. The Department notes,
however, that the adoption of this final
rule is not, as some airline commenters
argue, solely based on issues arising
from an unprecedented pandemic. As
we have witnessed during the past two
years while the air travel industry is
recovering post-pandemic, disruptions
in large scales continue to occur as the
result of other factors such as weather,
technological issues, and staffing
shortages. The significant number of
consumer complaints on refunds filed
with the Department in recent years
demonstrates the need to strengthen the
current regulation on refunds.
Regarding the various comments by
consumers, consumer right advocacy
groups, and the State Attorneys General
regarding promulgating regulations to
require airlines to provide
compensation to consumers when their
flights are cancelled or significantly
changed to cover the incidental costs
such as meals, hotels, and ground
transportation, the Department has
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initiated another consumer protection
rulemaking to address these issues.29
The Department fully recognizes that
the measures finalized in this rule on
airline ticket refunds are merely the first
steps towards the Department’s goal of
strengthening overall protections to
consumers affected by airline
cancellations and changes.
3. Definition of a Cancelled Flight
The NPRM: The Ticket Refund NPRM
proposed to define a cancelled flight to
mean a covered flight that was listed in
the carrier’s CRS at the time the ticket
was sold to a consumer but not operated
by the carrier. Under this proposed
definition, the reason that the flight was
not operated (e.g., mechanical, weather,
air traffic control) would not matter.
Also, the removal of a flight from a
carrier’s CRS would not negate the
obligation to provide a refund when the
alternative offered is not accepted.
Comments Received: A4A and IATA
expressed support for the Department
codifying a definition for ‘‘cancelled
flight’’, as they believe it is necessary to
provide clarity and transparency to the
traveling public. They argued, however,
that the definition should exclude
situations that would technically qualify
as a ‘‘cancellation’’ under the proposed
definition but do not affect consumers,
such as a simple flight number change
or a flight that was delayed into the next
calendar day but does not exceed the
delay limits set forth in the definition
for ‘‘significant change of flight
itinerary.’’ They further argued that
when a passenger from any cancelled
flight was rebooked on a new flight that
does not constitute a ‘‘significant change
of flight itinerary’’ when compared to
the original flight that was cancelled,
consumers should not be entitled to a
refund. The flight number change and
overnight delay exemptions argument is
supported by the Regional Airline
Association (RAA) and some foreign
airline commenters. The National Air
Carrier Association (NACA) argued that
the definition for ‘‘cancelled flight’’
should exclude cancellations due to
situations outside of carriers’ control.
Qatar Airways argued that the definition
should include only flight operations
that are not operated but were listed in
the carrier’s CRS within seven calendar
days of the scheduled departure. On a
similar issue, A4A submitted that the
Department should clarify that this
definition is distinct from the
Department’s airline service quality
29 See, Rights of Airline Passengers When There
Are Controllable Flight Delays or Cancellations,
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reporting rule, 14 CFR part 234, and it
does not change the definition for
‘‘cancelled flight’’ in that regulation.30
Spirit Airlines stated that it accepts the
Department’s proposed definition for
‘‘cancelled flight.’’
Consumers and consumer rights
advocacy groups fully support the
Department’s proposed definition for
‘‘cancelled flight.’’ National Consumers
League commented that whether a flight
was removed from a carrier’s CRS one
year or one day before its scheduled
operation is irrelevant for consumers.
U.S. Public Interest Research Group
Education Fund filed comments
supporting stronger consumer
protections for air travelers. It
specifically commented that by
adopting the proposed definition for
‘‘cancelled flight,’’ airlines should no
longer be allowed to categorize
cancellations that occur more than
seven days before the departure as
‘‘discontinued’’ flights therefore evading
being held accountable for the true
number of cancellations. It further
stated that this would encourage airlines
to produce more realistic flight
schedules.
Ticket agent representatives’ positions
on this definition are split. The United
States Tour Operators Association
(USTOA) supported the airlines’
position on exempting situations under
which consumers are reaccommodated
on flights that do not constitute a
‘‘significant change of flight itinerary’’
when compared to the cancelled flight.
Global Business Travel Association, on
the other hand, supported the
Department’s proposed definition.
U.S. Chamber of Commerce opposed
the proposal based on its understanding
that the definition would expand the
current refund entitlement and hold
carriers liable for cancellations due to
situations beyond their control such as
weather or air traffic control delays. It
further argued that this definition would
also entitle a passenger who is
reaccommodated on another flight to a
refund. It suggested that the Department
reconsider the definition to exempt
cancellations unforeseeable by carriers.
On the other hand, the ACPAC
recommended to the Department that it
adopt the proposed definition for
‘‘cancelled flight.’’ 31
30 Under 14 CFR part 234, which sets forth the
requirements that U.S. carriers must follow when
submitting, among other things, on-time
performance data to the Department, a ‘‘cancelled
flight’’ is defined as a flight operation that was not
operated, but was listed in a carrier’s computer
reservation system within seven calendar days of
the scheduled departure.
31 Three members representing consumer rights
advocacy groups, State Attorneys General, and
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DOT Responses: The Department has
considered the comments suggesting the
definition of ‘‘cancelled flight’’ not
include a flight cancellation that has no
significant impact on a consumer
because the new flight offered to the
consumer does not constitute a
‘‘significant change of flight itinerary’’
as compared to the original flight. The
Department is concerned, however, that
carving out such an exemption would
lead to substantial consumer confusion
as to whether a consumer is entitled to
a refund after a flight cancellation, as
entitlements to a refund would depend
on the nature of the new flight offered
to each affected consumer, a factspecific and case-by-case analysis that is
often time-consuming, and complex. For
example, if two passengers from a
cancelled flight were offered different
alternative flights, one that would be
considered a ‘‘significant change’’
compared to the cancelled flight and the
other that would not be considered a
‘‘significant change,’’ the outcome is
that one passenger would be entitled to
rejecting the alternative flight and
receiving a refund, and the other would
not. The Department believes that the
potential complexity and confusion
associated with a case-by-case
determination of when passengers are
entitled to a refund of a cancelled flight
outweighs its benefits. Further, the
Department believes that consumers
who are reaccommodated on a flight
that is substantially comparable to the
original flight generally would not
typically refuse the re-accommodation
and seek a refund. For these reasons, the
Department is adopting the proposed
definition of ‘‘cancelled flight’’ under
which a consumer would be entitled to
a refund with clarification. A cancelled
flight means a flight with a specific
flight number that was published in a
carrier’s Computer Reservation System
to operate between a specific origindestination city pair at the time of the
ticket sale that was not operated. Under
this definition, a flight that was
operated under a different flight number
would be considered a new flight and
airports, respectively, voted for the
recommendation, and the member representing
A4A voted against the recommendation, stating that
although A4A generally supports DOT defining the
term, the proposed definition does not address
several concerns that A4A mentioned in its
comments to the rulemaking. According to the
ACPAC Charter, a quorum must exist for any
official action, including voting on a
recommendation, to occur. A quorum exists
whenever three of the appointed members are
present, whether in person and/or virtually. In any
situation involving voting, the majority vote of
members will prevail, but the views of the minority
will be reported as well.
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the original flight would be considered
a canceled flight.
The Department further clarifies that
the NPRM did not propose to amend,
and this final rule does not amend, the
existing definition of ‘‘cancelled flight’’
for airline reporting purposes in 14 CFR
part 234. U.S. carriers will continue to
apply the existing definitions for
‘‘cancelled flight’’ and ‘‘discontinued
flight’’ in part 234 when reporting their
on-time performance data to the
Department. In response to the comment
by U.S. Chamber of Commerce, the
Department notes that its current policy
requiring airlines to provide refunds
due to flight cancellations applies
irrespective of the reason for a
cancellation, and this continues to be
the case under this final rule. The
Department further adds that the final
rule adopted here does not require
airlines or ticket agents to provide a
refund to a passenger for a canceled
flight if that passenger accepts the
alternative transportation offered and is
reaccommodated.
4. Definition of ‘‘Significant Change of
Flight Itinerary’’
The NPRM proposed to ensure
consistency on when passengers are
entitled to a refund for a significantly
changed flight by defining the term
‘‘significant change of flight itinerary’’
instead of relying on a case-by-case
analysis on whether a flight change was
significant to the consumer. The
Department proposed that changes that
affect departure and/or arrival times,
departure or arrival airport, a change in
the type of aircraft that causes a
significant downgrade in the air travel
experience or amenities available
onboard the flight, as well as the
number of connections in the itinerary,
would be significant to consumers. The
NPRM sought comments regarding
whether this approach is reasonable and
fair to passengers while not imposing
undue burden on carriers and ticket
agents, and whether there are any other
changes to flight itineraries that airlines
may make that should also be
considered a ‘‘significant change of
flight itinerary.’’ The NPRM also sought
comments on whether there are any
operational concerns from airlines and
ticket agents when implementing these
proposed definitions into their refund
policies that should be taken into
consideration.
A. Types of Significant Changes
(i) Early Departure and Late Arrival
The NPRM: The NPRM considered
three options in defining the extent of
early departure or delayed arrival that
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would qualify as ‘‘significant changes.’’
The first option, which the NPRM
proposed, is a set timeline of three
hours applicable to domestic itineraries
and another set timeline of six hours
applicable to international itineraries
that would constitute a significant
departure and arrival time change. The
NPRM emphasized that airlines and
ticket agents would be free to apply a
shorter timeframe that constitutes a
significant departure or arrival change
but would not be able to increase it
beyond three hours for domestic flights
and six hours for international flights.
The NPRM described this approach to
be the most straightforward, clearly
defined standard that would be easily
understood by airlines and consumers,
making it easier to train airline and
ticket agent personnel on how to
respond to refund requests, and
potentially streamlining and expediting
the refund review and issuance process.
In applying the proposed standard to a
refund request, the NPRM explained
that the proposal’s focus is only on the
departure time of the first flight segment
and/or the arrival time of the final flight
segment. In other words, an early
departure of a connecting flight or a late
arrival of a flight that is not the final
flight segment, even if exceeding the
proposed timeframe, may not
necessarily result in a passenger being
entitled to a refund. In addition, the
NPRM clarified that the proposed
standard for international itineraries
would apply to the early departure or
the late arrival of a domestic segment of
those itineraries if the domestic segment
is the first or the last segment and is on
the same ticket as the international
segment.
The second option the Department
considered in the NPRM is the option of
not defining the timeframes of early
departure and late arrival. Under this
approach, the Department would
continue to use the word ‘‘significant’’
to describe the amount of time change
that would justify a refund. The
Department stated that it has concerns
that this option of leaving the
determination of refund-qualifying
Projected arrival delay or early
departure as offered to passenger
3 hours or less ........................................................................................
2 hours or less ...............................
More than 2 hours .........................
3 hours or less ...............................
More than 3 hours .........................
4 hours or less ...............................
More than 4 hours .........................
5 hours or less ...............................
More than 5 hours .........................
6–10 hours ..............................................................................................
More than 10 hours .................................................................................
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flight schedule time changes to
individual airlines is not the best way
to achieve the balance between
considering all relevant factors
impacting consumers on the one hand,
and ensuring the efficiency,
consistency, and certainty of its
regulation on the other hand, and may
not be in the public interest. The NPRM
sought comments on whether
continuing to provide airlines the
flexibility to define significant flight
schedule time change is a better option
than the proposed approach (option 1)
of defining a significant departure or
arrival change to mean beyond three
hours for domestic flights and six hours
for international flights.
A third approach considered by the
Department is to define significant
departure and arrival time change
through the adoption of a tiered
structure based on objective factors such
as the total travel time of an itinerary.
The NPRM provided an example of a
tiered standard using the illustration
below.
Original scheduled total travel time
(measured from the scheduled departure time of the first flight
segment to the scheduled arrival time of the last flight segment)
3–6 hours ................................................................................................
The NPRM acknowledged that this
approach would be more difficult for
carriers to implement and for consumers
to understand because a determination
on whether a refund is due would be
based on each individual itinerary. The
NPRM asked whether the industry
considers the adoption of this type of
tiered standard to be practical and
whether consumers believe this type of
tiered standard would better reflect the
inconvenience and disruption caused by
a flight schedule change.
Comments Received: A4A expressed
its support for adopting a set timeframe
standard for determining whether a
refund is due. A4A stated that, however,
the standard should only include late
arrivals (delays) and not early
departures because it is consistent with
the Department’s reporting regulation
for U.S. carriers. A4A further suggested
that the standard should be four hours
for domestic itineraries and eight hours
for international itineraries. A4A also
commented that a schedule change
accepted by the passenger should reset
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the calculation for delays for the
purpose of refund. RAA supported
A4A’s position that the standard should
only cover delays but not early
departures, arguing that including both
would create potential conflict when the
arrival time did not exceed the standard,
but the departure time did. RAA also
supported A4A’s suggestion on
calculation of delay being reset once a
passenger accepts an alternative flight.
RAA suggested that a flight diversion
should not be treated as a significant
change of flight itinerary as long as
passengers are transported to their final
destination because safety and security
are usually the principal reason for
diversions. NACA and its member
Allegiant Air (Allegiant) commented
that the three/six-hour standards unduly
burden Ultra-Low-Cost-Carriers (ULCCs)
because of their limited networks and
the lack of interline agreements with the
large U.S. airlines that have operated for
many years. They believed that the
proposal would increase operating costs
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Result
Refund
Refund
Refund
Refund
Refund
Refund
Refund
Refund
Not Required.
Due.
Not Required.
Due.
Not Required.
Due.
Not Required.
Due.
and ultimately result in higher airfares.
Allegiant further suggested that the
Department should not require refunds
when the reason for the cancellation or
delay is outside of a carrier’s control, as
long as the carrier makes a good faith
effort to rebook the passenger. Spirit
Airlines, another NACA member,
commented that it has a two-hour
standard for both domestic and
international itineraries, and it does not
object to the proposed three/six-hour
standards. IATA, AAPA, and Qatar
Airways supported the second option,
which is to allow carriers to set their
own standards for flight schedule time
change. IATA argued that a uniform
standard harms consumers who travel
with airlines that currently have a more
generous policy. IATA suggested that if
the Department adopts a set of uniform
standards, it should be four hours for
domestic itineraries and eight hours for
international itineraries, with the
international standard applying to all
segments. Air Senegal and SATA
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International—Azores Airlines, S.A.
(SATA) also supported an eight-hour
standard for international itineraries.
AAPA stated that the proposal
disregards many contributory factors
impacting ultra-long-haul operations
including weather, safety, security
considerations, and government
restrictions. Among consumer
comments, National Consumers League
supports the proposed three/six-hour
standards. However, FlyersRights stated
that the proposed standards are more
lenient than many carriers’ current
policies. FlyersRights believes that the
refund rule should count for delayed
departures (as opposed to late arrivals)
and the standard should be two hours
for domestic and three hours for
international itineraries. FlyersRights
further commented that for early
departures, the standard should be one
hour for domestic and two hours for
international itineraries. FlyersRights
explained that it views early departures
as being more harmful to consumers
because for late departures, consumers
are usually already waiting at the
airports. Travelers United shared
FlyersRights’ view that the proposed
standards are more generous to airlines
than many airlines’ policies and
suggests that the standards should be 90
minutes. Among the over 4,500
individual consumer commenters,
approximately 500 commented on the
proposed three/six-hour standards, with
85% in support, and 15% suggesting
shorter hours, such as two hours for
domestic and four hours for
international, or three hours for both.
Two ticket agent trade associations,
the Destination Wedding & Honeymoon
Specialists Association (DWHSA) and
USTOA, expressed their support for the
proposed three/six-hour standards on
early departures and late arrivals.
Similarly, the ACPAC recommended
that the Department adopt the proposed
three- and six-hour delay standard
under which a refund is due.32 The joint
comment filed by 32 State Attorneys
General also advocated for a three-hour
delay benchmark being the floor for
consumers’ entitlement to refunds and
stated that this floor will result in
benefits for consumers on airlines with
unclear or lengthier delay parameters
for refunds. The comment further
argued that because some airlines
currently adopt a short timeframe, the
Department should take steps to ensure
32 Three members representing consumer rights
advocacy groups, State Attorneys General, and
airports, respectively, voted for the
recommendation, and the member representing
A4A voted against the recommendation, stating that
A4A supports defining ‘‘significant delay’’ but does
not support the three- and six-hour timeframes.
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that setting a floor does not cause these
airlines to loosen their standards to the
detriment of consumers. With respect to
the third option proposed in the NPRM
to adopt a standard with a tiered matrix
based on objective factors such as the
total travel time of an itinerary, several
airline commenters as well as
individual consumers expressed their
opposition, arguing that this approach is
not workable because there are too
many variables.
DOT Responses: The Department
appreciates the comments by
stakeholders on the proposed standards
for flight departure/arrival changes that
would constitute ‘‘significant changes of
flight itinerary.’’ The Department agrees
with commenters that defining
significant departure and arrival
through the adoption of a tiered matrix
based on an objective factor such as
total travel time to determine
significance is unworkable because of
its complexity. Based on the support
from the airline and ticket agent
industries and consumers, the
Department has determined that
adopting a unified standard consisting
of set timeframes to determine whether
a flight schedule change constitutes a
significant change is a preferred
approach as compared to the current
policy of allowing airlines to set their
own timeframes. This approach
provides much needed clarity and
consistency to consumers with respect
to their rights to refunds, no matter on
which airline they travel.
The Department has further
concluded that covering early departure
of the initial flight segment and late
arrival of the final flight segment is
reasonable and workable for airlines and
ticket agents, and beneficial to
consumers. Commenters have varied
perspectives on whether the definition
of significant change should be based on
early or late departure of the initial
flight segment or the late arrival of the
final flight segment. We have
considered some airlines’ comments
that the timeframes should apply only
to flight late arrivals (delays) but not
early departures, as well as
FlyersRights’ comment that the
timeframes should apply to change in
flight departure time (early or late
departures) regardless of whether
consumers’ arrival time is significantly
changed. We disagree with these
suggestions. The Department has
concluded that it is important to ensure
that the definition of significant change
includes both early departure as
consumers may not be available to take
the flight significantly earlier than
scheduled, and late arrivals, because
arriving significantly later than
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scheduled may make the trip moot (e.g.,
job interview) or severely disrupt travel
plans (e.g., miss embarkation of a
cruise). In contrast, the Department does
not believe that a late departure would
cause as much disruption, so long as the
consumer arrives at the final destination
without substantial delay. As
FlyersRights pointed out, consumers are
already at the departure airport while
waiting for a delayed departure flight,
and the late departure alone does not
add significant amount of additional
time to the total time that the consumers
already carved out for travel.
Regarding the timeline that would
constitute a significant departure and
arrival time change, the Department
agrees with the comment provided by
the State Attorneys General and others
that the proposed three-hour timeframe
for domestic itineraries and six-hour
timeframe for international itineraries
constitute a significant departure and
arrival time change. The Department
acknowledges that several airlines’
current refund policies adopt shorter
timeframes than the proposed three/sixhour standards, and the Department
notes that these airlines are not only
permitted under this final rule to
continue these polices but are
encouraged to do so. The Department
establishes a baseline to set the
minimum consumer protection
requirement, and the Department
expects that healthy competition in the
marketplace will lead to airlines
adopting consumer-friendly refund
policies that go above and beyond the
regulatory minimum. The Department
will closely monitor airlines’
implementation of this final rule and
the impact on consumers to determine
whether the three/six-hour timeframes
are adequate to ensure that consumers
who experience significant disruptions
and inconveniences from airline flight
schedule changes receive refunds if they
so choose.
The Department is not persuaded by
NACA’s argument that ULCCs are
unduly burdened by the three/six-hour
standard and it would ultimately cause
higher airfares. The fact that at least one
ULCC has already implemented for
some time a refund policy with a
schedule delay threshold lower than the
Department’s minimum standard
indicates that the three/six-hour
standard can work well with ULCCs’
unique business model and competition
strategies, and it will not be detrimental
to maintaining ULCCs’ fare structure.
The Department is also not persuaded
by comments that a schedule change
accepted by the passenger should reset
the calculation for delays for the
purpose of refunds. Under the final rule,
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a consumer’s acceptance of the flight
schedule time change when the original
flight encounters expected early
departure or late arrival or a consumer’s
acceptance of another flight when the
original flight was cancelled does not
reset the clock. The timeframes adopted
here are measured from the original
departure and arrival times offered to
consumers when they purchased their
tickets, and any deviation from those
times represents a change to the product
that they agreed to and paid for. By
adopting these timeframes in the
regulation, the Department has deemed
that any change to these original times
by three hours or more for domestic
itineraries and six hours or more for
international itineraries are material
and significant to consumers and they
are entitled to a refund if they do not
accept the change, or any alternative
transportation offered. Although the
Department understands that flight
schedule changes may occur multiple
times before the flight’s actual
operation, we believe it is
fundamentally unfair to consumers and
it will defeat the purpose of this rule if
we allow the clock to reset every time
a consumer accepts the time change to
a flight. In a typical rolling delay
scenario, a domestic flight initially
projected to arrive two hours late could
actually be delayed for eight hours, with
each new projection adding two more
hours at a time, and if the clock resets
each time, the consumer would never be
entitled to a refund despite the lengthy
delay.
Regarding RAA’s comment that the
refund requirement should exempt
situations involving flight diversions
due to safety or security concerns as
long as passengers were ultimately
transported to their destinations, the
Department does not view the refund
requirement as applying to these
diversion situations. Typically, when a
decision to divert a flight is made, the
flight has already departed and from the
passenger’s perspective, the travel
already took place. The passengers
would not have the opportunity to
refuse the flight. For those passengers,
the issue of requesting compensation for
their inconvenience caused by the
diversions will be addressed in the
Department’s forthcoming rulemaking
on Rights of Airline Passengers When
There Are Controllable Flight Delays or
Cancellations.33
33 See https://www.reginfo.gov/public/do/
eAgendaViewRule?pubId=202310&RIN=2105-AF20.
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(ii) Change of Origination, Connection,
or Destination Airport
The NPRM: The Department proposed
to define a significant change that
would entitle a consumer to a refund to
include a change of the origination or
destination airports. The Department
reasoned that most consumers are
concerned about origin and destination
airports when booking a flight itinerary
because of convenience and stated that
a carrier-initiated change in the
origination or destination airport is
likely to lead to additional time and cost
for consumers. The NPRM did not
propose to require refunds if a carrier
changes the connecting airport(s) and
instead invited comments on whether a
change of connecting airports should
also be considered a significant change
that would entitle consumers to a
refund. Further, the NPRM asked
whether special consideration on refund
eligibility should be given in situations
where passengers choose to connect at
a particular airport with extended
layover time for specific purposes
beyond connecting to the next flight,
such as conducting business or visiting
family, friends, or tourist sites at that
location.
Comments Received: Airline
commenters generally supported
including the change of an origination
or destination airport as a ‘‘significant
change of flight itinerary.’’ They
contended, however, that the definition
should exclude a change of airport
involving airports located in the same
metropolitan area. A4A and AAPA
suggested that a change between two
‘‘co-terminal airports,’’ as defined by the
Transportation Security
Administration’s (TSA) regulation,
should be exempted.34 Airline
commenters argued that these airports
are sufficiently close in proximity to
each other, indicating that a change of
the airport would not necessarily
significantly impact consumers’ travel
plans. Some carriers further argue that
allowing this exemption would
incentivize carriers to provide greater
rebooking options. Air Senegal provided
long-haul international carriers’
perspective by arguing that these
carriers’ first and foremost goal is to
provide transportation between two
major metropolitan gateways and a
change of airport within the same
metropolitan area that is necessitated by
circumstances beyond the carrier’s
34 Co-terminal [airport] means an airport serving
a multi-airport city or metropolitan area that has
been approved by TSA to be used as the same point
for purposes of determining application of the
security service fee imposed under [49 CFR 1510.5].
See 49 CFR 1510.3.
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control (e.g., airport staffing shortage,
government public health restriction)
should not trigger the refund obligation.
Airline commenters also supported the
position that a change of connecting
airport should not be considered a
‘‘significant change of flight itinerary.’’
IATA commented that if a passenger
wishes to have a longer layover at a
particular airport, airlines should
accommodate by rebooking on another
flight to that layover airport.
Consumers, consumer rights advocacy
groups, and ticket agent representatives
who commented on this issue were in
support of the Department’s proposal.
Two disability rights advocacy groups,
Paralyzed Veterans of America (PVA)
and United Spinal Association,
commented that, from passengers with
disabilities’ perspective, any change to
the origination, connection, and
destination airport should be considered
a ‘‘significant change of flight itinerary.’’
They stated that when booking flights,
passengers with disabilities may rely on
the specific accessibility features of an
airport to select the flights and itinerary,
and this may include selecting a
particular connecting airport based on
the accessibility features needed to
accommodate their disabilities during
the layover time.
DOT Responses: There is a consensus
from all the comments received that a
change of the origination or destination
airport in general would significantly
impact a passenger’s travel plan and
should be considered a basis for a
refund if the passenger no longer wishes
to travel. The Department disagrees with
airlines’ suggestion that the regulation
should exempt changes of airports
located in the same metropolitan area.
In the Department’s view, a change in
the origination or destination airport
when located in the same metropolitan
area could still significantly impact
passengers depending on the
passenger’s specific circumstances
including whether the new airport is
sufficiently close to their residence or
the hotel so they have the flexibility to
navigate to or from the new airport
without substantial additional cost,
whether they have the additional time
needed to travel to or from the
alternative airport, and whether
affordable ground transportation is
available for them to get to or from the
alternative airport. Given the potential
impact, the Department believes that the
best approach is to require refunds if
passengers reject the change in origin or
destination airport even if in the same
metropolitan area. The Department also
believes that this approach would not
impose a substantial negative impact on
long-haul international carriers, who
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stated that the main goal of their
operations is to transport passengers
between two major metropolitan
gateways. Passengers carried on longhaul international flights who are
focused on arriving at the destination
city as opposed to a specific airport can
accept the alternative airport offered by
the carrier. The Department further
notes that in the case of flights being
directed to a ‘‘co-terminal’’ airport due
to government restrictions, such as a
requirement to funnel flights for
communicable disease screening
purposes, it is likely that passengers
would not have a choice to travel on an
alternative flight that is destined to the
original airport. The Department
believes that passengers should have the
choice of either traveling to the coterminal airport, which is likely to be
the choice of many passengers, and the
option of receiving a refund.
With respect to a change of a
connecting airport, the Department is
defining such a change to be a
‘‘significant change of flight itinerary’’
only for consumers who are persons
with a disability. The Department
continues to believe that a change in a
connecting airport would not impact
most passengers because travelers’ goal
is to get to the destination, and they
generally care less about the connecting
airport. The Department is also not
convinced that imposing a refund
mandate is necessary for passengers
who specifically arranged to have an
extended layover at a connecting airport
for other business or leisure purposes.
Consumer comments were generally
silent on this issue, and IATA has stated
that airlines generally make such an
accommodation on their own when
requested.
The Department has decided to
require a refund to a passenger with a
disability 35 and other passengers on the
same reservation who choose not to fly
when the person with a disability does
not accept a change in the origination,
destination, and connection airport. The
Department appreciates PVA and
United Spinal Association sharing their
35 A passenger with a disability means an
individual with a disability who, as a passenger
(1) With respect to obtaining a ticket for air
transportation on a carrier, offers, or makes a good
faith attempt to offer, to purchase or otherwise
validly to obtain such a ticket;
(2) With respect to obtaining air transportation, or
other services or accommodations required by this
Part,
(i) Buys or otherwise validly obtains, or makes a
good faith effort to obtain, a ticket for air
transportation on a carrier and presents himself or
herself at the airport for the purpose of traveling on
the flight to which the ticket pertains; and
(ii) Meets reasonable, nondiscriminatory contract
of carriage requirements applicable to all
passengers. See 14 CFR 382.3.
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view that not defining a change to the
origination, connection, and destination
airport as a ‘‘significant change of flight
itinerary’’ would negatively impact
persons with disabilities. The
Department accepts that a change of the
origination, connection, or destination
airport may represent a significant
change to a person with a disability as
the layout, design, and the availability
of accessibility features of these airports
are a major consideration for persons
with disabilities when they select travel
itineraries. A change of any of these
airports could cause great harm to
passengers with disabilities if the new
airports are not as accessible as the
original airports. This change could
affect, for example, a passenger traveling
with a service animal who carefully
selected an airport with a service animal
relief area located near the passenger’s
connecting gate to accommodate a tight
connection timeframe, or a passenger
with visual impairment who chose a
connection, origination, or destination
airport that provides wayfinding/
mapping technologies through a mobile
app. Further, the Department is of the
view that a change of airports, at a
minimum, adds uncertainties to the
person with a disability regarding the
accessibility of the airport and that the
passenger with a disability is in the best
position to conduct a risk assessment
and determine whether he or she still
wants to travel from, to, or through a
particular airport.
(iii) Increase in the Number of
Connection Points
The NPRM: The NPRM proposed that
adding to the number of connection
points in an itinerary qualifies as
significant change that entitles a
consumer to a refund if the consumer no
longer wishes to travel. The Department
explained that the number of
connection points in an itinerary would
significantly affect the value of a ticket
because the more connection points, the
more likely passengers will experience
flight irregularities, complications, and
disruptions, as well as mishandled
checked baggage. As evidence, the
Department pointed out that airfares are
generally higher for an itinerary with
fewer connection points than an
itinerary with more connection points.
Comments Received: Airline
commenters unanimously opposed
considering adding connection points as
a ‘‘significant change.’’ Large U.S.
airlines argued that connections are a
fundamental part of carriers’ network
structure and carriers should be allowed
the ability to consider all available
options to reroute passengers, including
through additional connecting points.
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ULCCs argued that because of their
small networks and the lack of interline
partners, they may have to rebook
passengers with more connections, and
this would penalize ULCCs and other
small carriers despite their best effort to
reaccommodate passengers. Carriers
also argued that adding connections
does not necessarily mean consumer
inconveniences and, in some cases,
passengers may even arrive earlier than
the original schedule. These carriers
asserted that additional connections
without adding more travel time or
significant delay should not be
considered a ‘‘significant change.’’ IATA
commented that this proposal directly
conflicts with the APPR, the Canadian
regulation protecting air travelers,
which includes obligation to reroute
passengers on a reasonable route,
including connections.
U.S. Chamber of Commerce also
opposed the proposal, stating that in
cases of severe weather or major
disruptions at a hub airport, it is
necessary to rebook passengers on
itineraries with more connections to
ensure that they get to their destinations
as swiftly as possible.
Unlike airlines, National Consumers
League and FlyersRights supported the
Department’s proposal to define
significant change to include additions
in the number of connection points on
a flight itinerary. PVA and United
Spinal Association also expressed their
support for the proposal, stating that
adding connections is a significant
change to passengers with disabilities
because additional connections mean
additional inconveniences, increased
chance of passenger injury during
transfer, boarding, deplaning, and
increased chance of damage to assistive
devices such as wheelchairs, which may
further lead to passengers being forced
to use loaner chairs while waiting for
their wheelchairs to be repaired, causing
other health and safety concerns. These
disability organizations also commented
that more harm may occur from
extended overall travel time to
passengers forced to dehydrate
themselves during travel because they
cannot use the lavatories, or passengers
who need to minimize the time spent in
an airport wheelchair. In this regard,
PVA suggested that extending the
layover time by more than one hour is
a significant change.
DOT Responses: The Department has
decided to include an increase in the
number of connections in a flight
itinerary in the definition of ‘‘significant
change of flight itinerary.’’ The
Department finds the comments by PVA
and United Spinal Association about the
substantial inconveniences, and in some
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cases, potential harm and injury to
passengers with disabilities from
additional connections to be
compelling. The Department further
views that adding connections may also
negatively affect passengers who do not
have a disability in many ways. It is a
common sense that when a non-stop
itinerary becomes a one-stop itinerary,
or a one-stop itinerary becomes two-stop
itinerary, each added stop indicates
increased chance of irregularities,
including the potential of missed flights
and/or delayed baggage due to short
connecting times, flight delays due to
weather or air traffic control issues at
the additional connecting airport, and
additional complications related to
traveling with young children or the
elderly.
The Department disagrees with
IATA’s comment that considering an
additional connection as a ‘‘significant
change’’ under which a refund is due
conflicts with APPR. Under APPR,
carriers are obligated to provide
passengers the option of rerouting or
refunds.36 APPR does not prohibit
carriers from providing a refund if a
consumer does not wish to be rerouted
or does not accept the rerouting offered
by carriers. Also, this final rule does not
require carriers to provide a refund if
the passenger prefers a rerouting even if
that rerouting includes additional
connections. The Department believes
that the APPR and this final rule, when
working together, increase choices
provided to consumers affected by
cancellations and significant changes
and empower consumers to choose the
best options for themselves, either
rerouting or receiving a refund.
The Department is also not convinced
that allowing additional connections to
be a basis for a refund would impede
carriers’ ability to offer alternative
itineraries including itineraries with
additional connections. As stated
throughout this document, the goal of
defining ‘‘significant flight itinerary’’ is
to set a baseline for consumers’ rights to
refunds when they are affected by a
qualified change by providing them an
opportunity to evaluate any alternative
transportation offered by carriers against
the option of obtaining a refund. The
fact that a consumer is eligible for a
refund because of a significant change
does not mean airlines cannot or should
not offer alternative transportation. In
addition, there is nothing in the
Department’s regulation that prevents
carriers from fully utilizing their
36 See Air Passenger Protection Regulation (SOR/
2019–150) (APPR), Sections 17–18. https://lawslois.justice.gc.ca/eng/regulations/SOR-2019-150/
index.html.
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networks and offering options with
different connecting points to
passengers. For example, if a
passenger’s non-stop flight is cancelled
and the carrier determines that traveling
on a set of connecting flights would get
the passenger to the destination sooner
than waiting on the next non-stop flight,
the carrier is free to make the offer, and
the passenger will likely accept the offer
if the additional connection is
acceptable and arriving at the
destination sooner is more important to
that passenger than a non-stop flight.
(iv) Change of Aircraft Resulting in
Significant Downgrade of Available
Amenities and Travel Experiences
The NPRM: While acknowledging that
substitution of aircraft is often required
for operational reasons, and that most
substitutions do not substantially affect
consumers’ travel experience, the
Department proposed that a change of
aircraft would be considered a
significant change entitling the affected
passengers to a refund only if it results
in ‘‘a significant downgrade of the
available amenities and travel
experiences.’’ The NPRM recognized
that aircraft substitution may impact
passengers differently, noting that an
aircraft change may impact a passenger
traveling with a wheelchair when the
wheelchair no longer fits in the cargo
compartment of the new aircraft, but it
may not impact another passenger, even
one with a disability. The NPRM
proposed that the lack of certain
disability accommodation features as
the result of aircraft change, such as
onboard wheelchair storage spaces and
moveable armrests, which negatively
impacts the travel experiences of
persons with a disability and their
access to services onboard, would be
considered a ‘‘significant change’’ that
entitles the passenger to a refund upon
request. The Department solicited
comments on how to determine whether
an aircraft downgrade is a significant
change, whether it should be a case-bycase analysis, and whether there are
certain types of changes in amenities or
air travel experiences that should
automatically be considered significant
irrespective of the affected person.
Comments Received: Airlines and
their representatives expressed strong
concerns about the proposal and argued
that the term ‘‘significant downgrade of
available amenities and travel
experiences’’ is too broad, vague, and
subjective. U.S. Chamber of Commerce
supported the airlines’ argument that
the proposal is too vague and broad.
A4A suggested that in the absence of
clear guidance on this term, passengers
could assert seat configuration changes,
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the lack of Wi-Fi, a decrease in the
number of available movies, and a
reduction of seat reclining degrees as a
significant downgrade. A4A commented
that if the Department finalizes this
category as a significant change, it
should allow airlines to establish and
publish their own criteria and adhere to
the standard. IATA and Air Canada
argued that this proposal would
significantly impact carriers operating
multiple types of aircraft, or airlines that
are experiencing significant flight
disruptions and needing the flexibility
to fully utilize all available aircraft to
mitigate total passenger inconveniences
across the network. IATA pointed out
that the proposal does not consider the
situations where a substitute aircraft
provides downgrades to certain
amenities and upgrades to other
amenities. Airline commenters agreed
that a change of aircraft that impacts a
carrier’s ability to accommodate
mobility aids should be considered a
significant change.
National Consumers League and
FlyersRights expressed their support of
the Department’s proposal to consider a
significant downgrade of available
amenities and travel experiences to be a
significant change that would entitle
consumers to a refund. FlyersRights
added that changes in aircraft size,
stowage space, or seat size that no
longer allow passengers with disabilities
to travel safely should be considered a
significant change. Several individual
consumer commenters also supported
this proposal.
Among ticket agent representatives,
USTOA opposed the proposal, asserting
that it is too subjective and thus
unworkable. It further commented that
a change from a twin-aisle aircraft to a
single-aisle aircraft, the loss of Wi-Fi, or
a change to an older version of business
class may have little impact on some
consumers but more impact on others.
It opined that to determine whether a
passenger is eligible for a refund under
the proposal may cause extensive and
time-consuming disputes between
consumers and airlines and it is counter
to the Department’s goal of achieving
consistency across the industry. Global
Business Travel Association agreed that
aircraft change causing a lack of
disability accommodation should be
considered as a significant change. It
further stated that a service downgrade
such as the lack of Wi-Fi would
materially impact the value of a flight to
business travelers.
Disability rights advocacy groups
voiced their strong opinion that aircraft
changes affecting disability
accommodations should be viewed as
significant changes for passengers with
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disabilities. PVA commented that if a
substitute aircraft cannot accommodate
a passenger’s assistive device, carriers
should accommodate the affected
passenger and any caregivers, family
members, and other companions on
another flight of that carrier or other
carriers, or other mode of transportation
without additional cost. All Wheels Up
commented that the Department should
specify that refunds for the affected
passenger and others in the travel party
are required when the substitute aircraft
cannot accommodate wheelchairs in the
cargo compartment. United Spinal
Association also supported the position
that a significant change includes
downgrade or change of aircraft without
equal accessibility features. It urged the
Department to require carriers to find
accessible alternative transportation.
PVA and United Spinal Association also
commented on additional accessibilityrelated issues beyond the substitution of
aircraft, which will be discussed in
detail in the next section.
Public Hearing: In addition to
considering the public comments filed
in the rulemaking docket, at the request
of A4A and IATA, the Department also
conducted a public hearing pursuant to
the Department’s procedural regulation
on rulemakings relating to unfair and
deceptive practices at 14 CFR 399.75.
Such hearings are intended to afford
stakeholders an opportunity to present
factual issues that they believe are
pertinent to the Department’s decision
on the rulemaking. One of the subjects
stakeholders raised during the hearing is
how to determine whether a downgrade
of amenities or travel experiences
qualifies as a ‘‘significant change of
flight itinerary.’’ In the Notice 37
announcing the hearing, the Department
requested interested parties to provide
information on whether there are certain
types of amenity changes that should be
considered ‘‘significant’’ changes that
would entitle a consumer to a refund
and if so, whether the determination
should be made categorically or by
airlines on a case-by-case basis. The
Department also requested information
on how different airline operational and
pricing models affect onboard amenities
and travel experiences, and
subsequently affect consumer
expectations.
During the public hearing, airline
representatives reiterated the view they
expressed in the written comments to
the NPRM that the proposal undercuts
the Department’s goal of achieving
consistency and predictability to
consumers who are affected by itinerary
changes. They pointed out that the
37 88
FR 13387, Mar. 3, 2023.
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proposal relies heavily on the subjective
expectations of travelers and the vague
concept of ‘‘significant downgrade of
available amenities and travel
experiences’’ creates problems for all
parties involved, leading to timeconsuming and unsatisfactory case-bycase adjudications by the airlines and
the Department. They suggested that if
the Department proceeds to finalize this
proposal, it should explicitly limit
qualifying downgrades to those
identified in the airlines’ customer
service plans. They further indicated
that airlines would support the concept
of considering the inability to
accommodate a passenger’s mobility
device to be a significant change.
Representatives from FlyersRights and
National Consumers League both
expressed their support of the proposal
to consider a change of aircraft that
results in ‘‘a significant downgrade of
the available amenities and travel
experiences’’ to be a significant change
that entitles consumers to a refund if
they choose not to travel. The
representative from FlyersRights
commented that the guiding principle in
determining what downgrades are
significant should be whether a typical
passenger would have booked the flight
knowing that they would receive a
downgrade of amenities or travel
experiences. That representative further
commented that allowing airlines the
sole discretion to make the
determination will lead to ever shifting
standards. The representative from
National Consumers League commented
that if airlines were allowed to
determine what downgrades are
significant, it is highly likely that
airlines would define it so narrowly as
to make the consumers’ rights under
DOT regulation unusable by most
consumers. He suggested that the
Department should adopt a definition
that covers as many services as possible
to give consumers the flexibility to
determine what is and is not a
significant downgrade for them.
A representative from PVA spoke at
the hearing regarding the broad impact
of flight itinerary changes on passengers
with disabilities. In addition to the
impact of aircraft substitution on the
transportation of passengers’ mobility
aids, she also commented on changes of
other accessibility features that may
lead to significant disruption to
passengers’ travel, such as the lack of
accessible lavatories. She emphasized
that passengers with disabilities should
not be forced to accept flights that cause
unnecessary inconveniences or
undesirable circumstances because the
negative impact of air travel extends not
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only to the passengers but also to those
who assist them during the journey or
at the destination. Therefore, she
commented that any determinations
regarding significant changes should be
made categorically, considering the
challenges faced by these passengers.
Representatives from Travel Tech and
Travel Management Coalition spoke on
behalf of ticket agents. While supporting
the Department’s proposal in principle,
they emphasized the importance of
designating airlines with the
responsibility to determine whether a
change of available amenities or travel
experiences caused by aircraft
substitution is a significant change.
They commented that ticket agents rely
on clear guidance from both the
regulatory bodies and airlines to make
these determinations.
A public participant provided her
opinions as an expert on consumer law
on this issue by suggesting that the
Department should adopt a ‘‘reasonable
consumer’’ standard. She commented
that the determination should be a caseby-case analysis and encouraged the
Department to provide guidance but not
adopt a rigid definition.
Following the hearing, A4A, IATA,
Spirit, USTOA, and PVA filed
supplemental written comments on this
issue. A4A and IATA’s joint comment
emphasizes their position to support a
rule requiring refunds when aircraft
downgrade prevents the transportation
of a passenger’s mobility aid, when an
accessible lavatory is no longer available
on the flight, when an on-board
wheelchair requested by a passenger is
no longer available, or when moveable
armrests are not available on the
aircraft. Spirit commented that a rule
consistent with the Department’s
oversales regulation should be adopted
to require a refund for the amenity not
provided, but not a refund for the full
fare. USTOA comments that, in addition
to its written comment on the NPRM, it
continues to strongly oppose the
proposal as it believes that consistency
and predictability are necessary and
crucial elements in a final rule which
would be lacking if the Department
adopts the proposed standard. USTOA
adds that public interest will not be
served by adopting the proposal that
introduces further confusion into the
ticket refund process and leaves sellers
of travel to grapple with case-by-case
determinations. PVA’s comment urges
the Department to establish a clear
definition to include downgrades of
amenities and travel experiences for
passengers using mobility devices. PVA
further provided examples of
downgrades that affect these passengers,
including circumstances in which the
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mobility aids will not fit in the cargo
compartment or in-cabin stowage, loss
of lavatory access and/or on-board
wheelchair, and loss of movable
armrests.
DOT Responses: After carefully
considering all the comments, the
Department has determined that
adopting the proposal to include in the
definition for ‘‘significant change of
flight itinerary’’ any aircraft change that
leads to ‘‘significant downgrade of
available amenities or travel
experiences’’ applicable to all
passengers is not practical and
workable, and as a result, we are
modifying the proposal to cover specific
passengers who are categorically
protected and would be affected by this
‘‘significant change.’’ The Department
recognizes the ambiguity and
subjectivity of the proposed term
‘‘significant downgrade of available
amenities and travel experience’’ and
has determined that adopting this term
and requiring airlines and ticket agents
to conduct a case-by-case analysis will
lead to tremendous confusion among
consumers, airlines, and ticket agents,
who would incur significant
administrative costs when disputes
arise. The Department also believes that
outside of accessibility features, most
discomfort and inconvenience caused
by aircraft substitution-related changes
can be addressed between airlines or
ticket agents and their customers
without a regulatory mandate on ticket
refunds. In another part of this final
rule, the Department is adopting the
proposal to require airlines to provide
refunds for any ancillary service fees
when the services that consumers paid
for are not provided. The Department
believes that this strikes a good balance
between ensuring that consumers
receive a refund of the ancillary service
fees for services that they did not
receive, including due to aircraft
substitution, and avoiding the major
administrative complication related to
determining what amenities or ancillary
services are so significant to a passenger
that their loss warrants a refund of the
entire ticket.
On the other hand, the Department
strongly agrees with the disability rights
organizations that any change of aircraft
that leads to the unavailability of an
accessible feature needed by a passenger
with a disability is a significant change
and should entitle the passenger to a
refund. We recognize that for persons
with disabilities, a downgrade of
onboard amenities or travel experiences
from aircraft substitution may have
serious negative implications on the
passengers’ health and safety and may
fundamentally change these passengers’
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decision about travel. As such, the
Department determines that aircraft
substitution leading to an accessibility
feature being unavailable to a passenger
with a disability who needs the feature
is categorically a ‘‘significant change’’
for that passenger. The Department
notes that comments from airlines focus
on a change involving the inability to
transport a wheelchair in the cargo
compartment, which is an example
provided in the NPRM. The
Department’s final rule, however, is
broader than that example. Under this
final rule, airlines and ticket agents are
required to refund to a passenger with
a disability who no longer wishes to
travel if an aircraft change leads to the
loss of one or more accessibility feature
needed by that passenger. Such features
would include, but are not limited to,
in-cabin stowage of assistive devices, a
movable armrest, accessible lavatories,
on-board wheelchairs, and cargo
stowage of mobility aids. The
Department is also requiring airlines
and ticket agents to provide refunds to
other individuals traveling with the
passenger with a disability in the same
reservation, if the passenger with a
disability no longer wishes to travel due
to a significant change impacting
accessibility. Details of this requirement
will be discussed in Section B below.
The Department also notes that
although the rule does not specifically
require airlines to provide refunds to
passengers who are affected by aircraft
substitution outside of the disability
accommodation grounds, we expect that
airlines will continue to assess the
impact of aircraft substitution on each
passenger based on the passenger’s
situation and consider providing
refunds when appropriate.
(v) Downgrade in the Class of Service
The NPRM: The NPRM proposed that
a carrier-initiated downgrade in the
class of service is a ‘‘significant change
of flight itinerary’’ and would entitle a
passenger to a refund if the passenger
decides not to continue travel. The
NPRM noted that under the
Department’s oversales regulation, when
a passenger on an oversold flight is
offered accommodation or is seated in a
section of the aircraft for which a lower
fare is charged, the passenger is not
entitled to be denied boarding
compensation but is entitled to an
appropriate refund for the fare
difference, assuming the passenger
traveled on the flight in the downgraded
class of service.38 Here, the NPRM
proposed that when a passenger is
downgraded to a lower class of service,
38 See
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either on the originally booked flight or
on an alternative flight offered by the
carrier, and the passenger declines to
take the downgraded flight, a refund of
the entire unused portion of the ticket
must be offered. The NPRM explained
that the Department views a downgrade
in the class of service as significantly
changing the passenger’s ticket value
and travel experience and entitling the
consumer to a refund of the ticket price
and any unused ancillary services if the
consumer does not travel. The NPRM
further clarified that the proposal is not
limited to situations where the entire
flight or the class of service the
passenger was initially booked on was
oversold. Downgrade of a passenger’s
class of service could occur for other
reasons such as weight and balance or
change of aircraft. The NPRM asked
whether the Department should require
airlines to provide a refund of only the
ticket price difference, and not mandate
a full refund if the passenger does not
accept the downgrade, similar to the
existing oversales regulation.
Comments Received: Airline
representatives opposed the
Department’s proposal of considering a
downgrade of the class of service a
significant change, arguing that it would
disincentivize carriers from rebooking
affected passengers on the same aircraft
but in a lower class of service. They
expressed their belief that a downgrade
to a lower class of service should only
result in a refund of the fare differences
because the passenger would be
provided with the flight as scheduled.
IATA stated that if this proposal is
adopted, minors and companions
traveling with the downgraded
passenger should not be eligible for a
refund if they were not downgraded as
well. This position was supported by
Qatar Airways. IATA further requested
that the Department define a change in
‘‘class of service’’ as a change of cabin
to avoid any confusion. Air Canada
suggested that the proposal, if adopted,
would conflict with certain provisions
of EC 261/2004, which requires
compensation as opposed to refunds for
certain downgrades. SATA suggested
that the Department should adopt a
similar requirement as EC 261/2004 that
requires a percentage of refund
according to the amount of fare paid and
the flight distance.
DOT Responses: The Department has
carefully considered this issue and
determined that although not all
passengers view a downgrade to a lower
class of service so significantly that they
would prefer to not travel on the flight,
there are a substantial number of
passengers who would be impacted
significantly by a downgrade and would
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prefer a refund. The Department
believes that affected passengers should
be given the choice of either accepting
the change and continuing to travel or
receiving a refund. The Department
notes that many passengers with
disabilities select a certain class of
service when booking tickets for reasons
related to their disabilities. For example,
a higher class of service may provide
extra legroom needed by passengers
with a mobility impairment or traveling
with service animals. Besides
passengers with disabilities, other
passengers may find a downgrade not
acceptable because it substantially
affects their travel experiences. For
instance, a passenger of size being
downgraded to a lower class of service
may no longer wish to travel because of
the discomfort associated with the
reduced seat pitch and width, and this
is particularly a concern for these
passengers on long flights.
The Department is not convinced that
this requirement would disincentivize
airlines and ticket agents from offering
to rebook passengers in a lower class of
service, either on the original flight or
another flight. As in all the other
scenarios involving significant changes,
carriers and ticket agents are free to offer
a variety of other options to affected
consumers so long as they are informed
about their right to a refund. Consumers
can choose the option that best meets
their needs, including traveling in a
lower class of service. Carriers and
ticket agents are incentivized to make
these offers to passengers to fill vacant
seats on aircraft.
The Department clarifies that this
final rule requiring carriers and ticket
agents to provide a refund to passengers
who choose to not travel when being
downgraded to a lower class of service
does not negate carriers’ and ticket
agents’ obligation to refund the fare
differences when passengers choose to
travel in a lower class of service. This
will continue to be the requirement
regardless of whether the downgrade
was due to an oversales situation or any
other situation.
The Department does not believe that
requiring airlines and ticket agents to
provide a refund to passengers who are
downgraded to a lower class of service
conflicts with the laws of other
jurisdictions, including EC261. Like the
Department’s oversales rule that
requires carriers to refund the fare
differences to passengers who are
continuing to travel on a lower class of
service, EC261 requires that carriers
refund between 30% to 75% of the
ticket price, depending on the distance
of the flight, to a downgraded passenger
who is continuing the flight. In contrast,
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this final rule simply addresses the
situation in which the passenger
chooses not to travel on the original or
rebooked flight in a lower class of
service, a situation that is not directly
addressed in EC261.
As suggested by IATA, the
Department is also adopting a definition
of class of service in the final rule to
avoid any confusion. A class of service
is defined as seating in the same cabin
class such as First, Business, Premium
Economy, or Economy class, based on
seat location in the aircraft and seat
characteristics such as width, seat
recline angles, or pitch (including the
amount of legroom). Premium Economy
would be considered a different class of
service from standard Economy, while
Basic Economy would not. Basic
Economy seats do not differ in pitch
size or legroom from standard Economy.
In situations where a group of
passengers are traveling under the same
reservation, the Department generally is
not requiring airlines to offer refunds to
all passengers in the group if not all
passengers are affected by a downgrade
of class of service, except when the
affected passenger is a qualified
individual with a disability and the
downgrade of class of service affects an
accessibility feature needed by that
passenger, in which case refunds must
be offered to all passengers in the group
upon notification by the passenger with
a disability or someone authorized to act
on behalf of the passenger with a
disability that the person with a
disability does not intend to continue
travel on that flight.
B. Individuals Entitled to Refunds When
a Significant Change Impacts
Accessibility
The Department agrees with
comments received from disability
rights organizations and is requiring a
refund to a passenger with a disability
and other passengers on the same
reservation who choose not to fly
because the person with a disability
does not accept a significant change of
flight itinerary resulting from a change
in aircraft or class of service that results
in the unavailability of one or more
accessibility features needed by the
person with a disability. The
Department is also requiring a refund to
person with a disability and others on
the same reservation who do not wish
to continue to travel because the person
with a disability does not accept a
significant change in flight itinerary
resulting from a change in connecting
airport. The Department believes that a
change in the flight itinerary that
reduces the accessibility of the air travel
to a person with a disability must entitle
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not only that individual to a refund but
also all other individuals on the same
reservation.
The Department notes that being a
qualified individual with a disability
alone may not necessarily entitle travel
companions to refunds. This final rule
requires carriers to provide passengers
with a disability affected by a change in
aircraft or downgrade of a class of
service a refund if they do not continue
travel. That refund is limited to the
individual being downgraded, however,
unless the downgrade results in the
unavailability of one or more
accessibility features needed by the
person with a disability. In that case,
individuals who are not directly
affected by the downgrade of class of
service are also entitled to a refund. For
example, if a passenger with a hearing
impairment was downgraded to a lower
class of service and it is determined that
the downgrade does not impact any
accessibility feature needed by that
passenger, that passenger is entitled to
a refund if he or she does not accept the
downgrade, but airlines and ticket
agents are not required to extend the
refund offer to other persons in the same
reservation who are not downgraded.
Conversely, if a passenger needing extra
legroom to accommodate a disability
was downgraded and the extra legroom
is no longer available as a result, that
passenger is entitled to a refund and so
are any other persons in the same
reservation. For an aircraft change to
entitle travel companions of a person
with a disability to a refund, the aircraft
change must result in the unavailability
of one or more accessibility features
needed by the person with a disability
and that person with a disability must
reject the significant change.
The Department believes that
extending refund eligibility to travel
companions of passengers with
disabilities whose ability to travel
comfortably or safely is significantly
impacted by a flight itinerary change
that affects accessibility is appropriate
because family members or other
individuals with whom the person with
a disability is traveling may not wish to
continue travel without that person.
Also, the person with a disability may
be traveling with a personal care
assistant. The requirement that refunds
must be offered to all passengers in the
same reservation is intended to provide
flexibility for passengers to determine
whether the group wants to travel
together, decline travel and receive
refunds together, or split up with some
continuing to travel and some
(including the passenger with a
disability) canceling travel and
receiving refunds. Airlines and ticket
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agents may not mandate that all
members of the group make the same
decision about refunds but may refuse
refunds if the only passengers
requesting refunds are those who would
not have qualified for a refund but for
traveling with the passenger with a
disability.
The Table below summarizes the
rights to a refund by individuals with
32779
disabilities and their travel companions
on the same reservations under certain
significant changes that may impact
accessibility.
TABLE 1—RIGHTS TO A REFUND BY INDIVIDUALS WITH DISABILITIES AND TRAVEL COMPANIONS
Aircraft Substitution:
Impacts an accessibility feature needed
disability.
Does NOT impact an accessibility feature
with a disability.
Downgrade in Class of Service:
Impacts an accessibility feature needed
disability.
Does NOT impact an accessibility feature
with a disability.
by a passenger with a
Yes .................................................
Yes.
needed by a passenger
No ..................................................
No.
by a passenger with a
Yes .................................................
Yes.
needed by a passenger
Yes .................................................
(NOTE: any passenger downgraded is entitled to refund irrespective of disability).
No.
(NOTE: if travel companion is
downgraded then that individual
would be entitled to refund).
Yes .................................................
Yes.
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Change of Connecting Airport:
Does not require analysis of impact on accessibility .......................
The Department acknowledges that
the disability organizations also
requested that the rule impose a
requirement on airlines and ticket
agents to rebook passengers with
disabilities and their travel companions
on another flight or ground
transportation that would accommodate
the disability without additional cost.
The Department is examining the issue
further in its rulemaking on Ensuring
Safe Accommodations for Air Travelers
with Disabilities Using Wheelchairs.39
The Department is committed to
continuing its efforts to protect the
rights of air travelers with disabilities
and is further exploring how to
accommodate their needs during flight
disruptions in this separate rulemaking.
The Department recognizes that the
special considerations given to
passengers with disabilities and their
travel companions due to a significant
change of flight itinerary impacting
disability accommodations may lead to
some passengers falsely claiming that
they have a disability that was impacted
by a change of connecting airport or an
aircraft substitution, as well as to an
entire travel group requesting refunds
based on a false claim that one
passenger in the group has a disability
the accommodation of which was
affected by a significant flight itinerary
change. Consistent with the
Department’s Air Carrier Access Act
regulation, when conducting inquiries
regarding how a passenger’s disability
accommodation needs are impacted by
39 See
89 FR 17766 (Mar. 12, 2024).
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Are travel companions on the
same reservation entitled to a
refund if an individual with a
disability rejects change?
Is an individual with a disability
entitled to a refund?
Significant change
a significant change, carriers should
never ask about the nature or the extent
of a passenger’s disability. Carriers can
ask questions about an individual’s
ability to perform specific air travelrelated functions that may be impacted
by the change. For example, carriers
should not ask ‘‘what is your
disability?’’ but may ask ‘‘what is the
accessibility feature that is needed that
is no longer available because of the
aircraft substitution or change in class of
service?’’ Also, the Department notes
that an advance request for disability
accommodation recorded in the
passenger’s reservation before the
significant change occurred can serve as
evidence that the passenger is a
qualified individual with a disability
and the significant change indeed
impacts the accommodation for that
disability. However, some individuals
with disabilities may not request
assistance in advance, but a significant
change of flight itinerary may
nonetheless impact an accessibility
feature that they need, resulting in them
no longer wishing to travel. As such, the
Department cautions that lack of such a
notation is not sufficient on its own as
proof that the individual is not a person
with a disability.
5. Entities Responsible for Refunds
The NPRM: The NPRM described the
significant volume of refund complaints
against ticket agents received by the
Department during the COVID–19
pandemic and states that this is an
indicator that strengthening protections
for consumers purchasing air
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transportation from ticket agents is
needed. These complaints also
illustrated the difficulty that consumers
sometimes encounter in obtaining a
refund for a ticket purchased through a
ticket agent when consumers do not
have the means to determine whether
the airline or ticket agent needs to take
action to process the refunds and which
entity is in possession of the consumers’
money. To address this difficulty, the
NPRM proposed that ticket agents who
‘‘sold’’ the tickets would be responsible
for issuing refunds when they are due.
It further explained that a ticket agent
would be considered to have ‘‘sold’’ the
ticket at issue if the ticket agent is the
entity shown in the consumer’s
financial charge statements such as
debit or credit card charge statements
(commonly known as the ‘‘merchant of
record’’). Under the proposal, a ticket
agent obligated to provide a refund
under this standard would be required
to issue refunds promptly irrespective of
which entity has possession of the
funds. In the NPRM, the Department
shared that it considered placing the
obligation of providing the refund on
the entity that is in the possession of the
funds but did not propose this approach
because which entity is in possession of
the funds would not necessarily be clear
to the consumer because multiple
entities may be involved in the
transaction process.
With respect to airlines’ obligations to
provide refunds in codeshare and
interline situations, the NPRM proposed
that the marketing carrier of an itinerary
involving codeshare or interline flights
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would be responsible for providing the
refund, regardless of whether the
marketing carrier is also the operating
carrier of the flight(s) affected by a
cancellation or a significant change or
whether the marketing carrier is the
carrier that cancelled or made a
significant change to the flight itinerary.
The NPRM explained that this approach
benefits consumers by streamlining the
process to obtain refunds and expects
that carriers will be able to develop a
system with their codeshare and
interline partners to ensure that refunds
are provided in a timely manner. The
NPRM sought comments on the costs
associated with establishing such a
system for interline and codeshare
partners to process refunds according to
this proposal and whether there are
technical obstacles that should be
considered.
Comments Received: Airline
commenters agreed that the refund
requirement should apply to ticket
agents when they are the merchants of
record for the ticket sales or have
otherwise paid for the ticket on behalf
of the passenger. In supporting this
position, airlines argued that they are
incapable of issuing refunds for tickets
purchased through ticket agents or other
third parties because airlines may not be
in possession of the passenger’s
payment information and/or personal
contact information and airlines often
do not have full visibility of the prices
paid by consumers, especially in
situations where ticket agents purchase
bulk fares from airlines to resell to
consumers. IATA commented that when
consumer funds collected by ticket
agents are processed through IATA’s
settlement system, the Billing and
Settlement Plan (BSP), ticket agents are
responsible for filing for reimbursement
from airlines via the settlement system,
and the airlines determine refund
eligibility. A4A supported the proposed
standard to hold ticket agents
responsible for refunds when the ticket
agents are the merchants of record, or
the consumer has paid by cash or check
to the ticket agent. A4A stated that it is
the standard practice today and should
be codified in the Department’s
regulation. Both A4A and IATA as well
as several airline commenters supported
applying the refund requirement to
ticket agents globally who sell tickets for
covered flights. Several consumer
commenters expressed their support to
hold ticket agents responsible for
refunds, describing their frustrations in
chasing refunds between the airline and
the ticket agent.
Ticket agents and their trade
representatives voiced strong opposition
to the proposal that requires ticket
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agents who are the merchants of record
to provide refunds irrespective of
whether they are in possession of
consumer funds. Many ticket agent
commenters acknowledged that in the
vast majority of transactions involving
ticket agents, airlines are the merchants
of record.40 They argued, however, that
although ticket agents have the
technical ability to issue refunds when
they are the merchants of record, they
should not be required to do so because
the consumer’s funds were often
remitted to airlines through the
settlement systems immediately or
shortly after ticket booking, and
requiring ticket agents to refund before
they receive the funds back from
airlines would significantly impact the
cashflow of ticket agents, especially
ticket agents that qualify as small
businesses.41 Many commenters opined
that such a requirement is
fundamentally unfair because ticket
agents have no control over airlines’
cancellation or change of flights, nor do
they have any control over the
determination on whether a consumer is
eligible for a refund. Ticket agents also
argued that the process of returning
funds from airlines to ticket agents
through intermediary settlement
systems such as the Airline Reporting
Corporation (ARC) system typically
takes much longer than seven days.
Hundreds of small business ticket agent
commenters further argue that the
impact of such a requirement on ticket
agents is so profound that many of them
would consider stopping offering airline
tickets booking services, which has the
potential consequence of disrupting a
major airline tickets distribution
channel and causing consumers to lose
the valuable travel advisory services
offered by ticket agents.
Additionally, several ticket agents
trade associations contended that ticket
agents lack information regarding
consumers’ refund eligibility and any
alternative transportation or
compensation offered by airlines and
accepted by consumers. They argued
that airlines should have the sole
responsibility to determine refund
eligibility and timely communicate such
information to ticket agents. Further,
ASTA stated that to process a refund
40 For example, according to American Society of
Travel Advisors (ASTA), it estimates that between
five and eight percent of all airline ticket
transactions by credit cards facilitated by its
members have the ticket agents appear as the
merchants of record, with the majority of which
involving group bookings, air-inclusive tour
packages, or resale of consolidated fares.
41 ASTA states that its data indicates that 98% of
travel agencies qualify as ‘‘small businesses’’ under
the Small Business Administration (SBA) size
standards.
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through settlement systems such as
ARC, ticket agents must first receive an
Electronic Authorization Code directly
from airlines, confirming the flight
coupon has been changed to a refund
status, which minimizes duplicate
refunds and prevents fraud. Ticket agent
commenters suggested that the
Department should revise its proposal
and require ticket agents who are the
merchants of record to issue refunds
only when they receive confirmation of
refund eligibility and funds from the
airlines, and that the Department should
not impose refund deadlines on ticket
agents until all these conditions are met.
ASTA also expressed concerns about
how to determine which entity is the
merchant of record, commenting that
consumers may not know which entity
is the merchant of record by looking at
the credit card statement. ASTA stated
that some credit card issuers would
identify both the airline and the ticket
agent on the consumers’ credit card
statements to reduce the likelihood that
consumers mistakenly dispute the
charges because they did not recognize
the transactions. ASTA also asked the
Department to clarify that when a ticket
agent appears on a consumer’s credit
card statement as the merchant of record
for charging a service fee, it would not
trigger the ticket refund requirement.
ASTA further stated that more clarity is
needed on how to determine which
entity is the merchant of record when
tickets are not paid by credit cards or
debit cards.
The ACPAC also discussed the issue
of ticket agents’ responsibility to refund
and heard from numerous ticket agent
representatives about the potential
impact on their businesses should the
Department adopt the proposal. The
ACPAC recommended that the
Department adopt the proposed
standard to hold ticket agents
responsible for refunds when they
‘‘sold’’ the tickets. Further, in
recognition of the potential financial
impact on small businesses, the ACPAC
recommended that the Department
revise the proposal to provide some
relief for ticket agents.42 Specifically,
the ACPAC recommended that the
Department impose a requirement on
airlines to return the consumer funds to
ticket agents within seven days of
receiving the refund requests, and that
ticket agents that qualify as ‘‘small
businesses’’ under the standard set forth
42 Among the four members of ACPAC, three
members voted in support of this recommendation
and the member representing airlines abstained,
expressing concerns about whether the
recommendation regarding refund timeline is
consistent with other Federal regulations, i.e.,
Regulation Z.
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by the Small Business Administration
(SBA) be given up to 14 days, instead
of seven days, to issue refunds.
On entities responsible for refunds for
codeshare or interline itineraries, IATA
indicated that it supports the proposal
to require the marketing carriers be
responsible for issuing refunds for
codeshare flights. IATA further
commented that the Department should
require the operating carriers to refund
any portion of the fare or fees paid by
the marketing carrier in the event a
refund is due to passengers.
DOT Response: Sales by ticket agents
constitute a major airline ticket
distribution channel. According to
anecdotal data from the Airline
Reporting Corporation published in
2019, travel agencies generated 44% of
air segment sales.43 During the COVID–
19 pandemic, the unprecedented
number of consumer complaints on
refunds included a significant number
of complaints against ticket agents and
tour operators. In those complaints,
consumers expressed frustration at
being sent back and forth between the
ticket agent and the airline when trying
to obtain their refunds. As many
commenters from the industry have
illustrated, in a typical airline ticket
transaction involving ticket agents as
the merchant of record, the consumer
funds are transferred through various
entities including intermediary
settlement systems. It is the
Department’s understanding that for
those ticket sales, the refund process
reverses the flow of money among the
entities involved. Thus, focusing on
which entity is in possession of the
funds when assigning a refund
obligation is impractical and
unworkable from a consumer’s
perspective because consumers do not
know which entity is in possession of
the funds at any given time. The
Department continues to view such
uncertainty as a main driving force
leading to additional costs, delay, and
confusion to consumers. Given this
concern, the Department declines to
adopt the suggestion to assign refund
obligation based on which entity is in
possession of consumer funds, and
instead, adopts the proposed standard to
hold retail ticket agents responsible for
refunds when they ‘‘sold’’ the tickets to
consumers as the merchants of record.
This requirement would cover retail
ticket agents of all sizes that conduct
business online or via brick-and-mortar
stores that transact directly with
43 Phocuswright White Paper—Air Sales and the
Travel Agency Distribution Channel, Airline
Reporting Corporation, April 2019. https://
www.phocuswright.com/Free-Travel-Research/AirSales-and-the-Travel-Agency-Distribution-Channel.
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consumers. The Department believes
that this bright line standard is the most
effective way to address the potential
consumer confusion and frustration
when there is more than one entity
involved in the selling of airline tickets.
The Department also agrees with airline
commenters that holding ticket agents
who sold the tickets responsible for
refunds addresses the issues that arise
when airlines do not have the
consumers’ payment and/or contact
information, or visibility of how much
consumers paid for the tickets when
tickets are sold as consolidated fare or
bulk fare, all of which are necessary for
processing refunds promptly and
accurately.
The refund requirements for ticket
agents apply to airfare or airfareinclusive travel package transactions in
which the ticket agents are the
merchants of record for the transactions
irrespective of whether the ticket agent
is in possession of the consumer funds
at the time when the refund is due. The
Department defines ‘‘merchant of
record’’ as an entity that processes
consumer payments for airfare or airline
ancillary service fees and whose name
appears on the consumer’s bank or
similar transaction statement. Regarding
ASTA’s comment that some credit card
statements will list both the airline and
the ticket agent for the transaction, the
Department understands that this is
done by credit card issuers with the
intention to ensure that consumers
recognize the charges. As there is
always one merchant processing the
card payment, consumers can contact
their credit card issuers and ask which
entity is the merchant of record who
imposed the charge. For transactions
paid by a payment other than credit
cards or debit cards, the transaction
receipt provided to consumers should
list the entity that is responsible. In that
regard, if the consumer purchased the
ticket with cash or check, the entity that
issued the receipt should be responsible
for refunds.
The Department appreciates the
information from the industry regarding
the flow of funds in ticket agentinvolved airline ticket transactions. It is
the Department’s understanding that
ticket agents’ main concern is not about
taking on the obligation to refund when
they are the merchants of record. It
seems that their concern, instead, is the
obligation to refund according to the
refund timelines even when the funds
have not been returned to them by the
airlines. Ticket agents emphasized that
imposing this obligation regardless of
whether they have possession of the
funds will place a significant burden on
their cashflow, particularly on ticket
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agents that are small businesses.
Accordingly, many commenters asked
that, should the Department adopt the
merchant of record standard to hold
ticket agents responsible for refunds,
ticket agents should be required to
provide refunds only when they receive
the funds returned by airlines.
The Department disagrees with the
approach proposed by ticket agents that
they would not be required to refund
consumers until they receive the funds
from airlines because it would harm
consumers should airlines, who are not
directly responsible for refunds, not
timely return the funds to ticket agents.
The result of the ticket agents’ proposed
approach is that consumers would have
no meaningful timeline within which
they can expect to receive refunds. The
Department has considered the
ACPAC’s recommendation that there be
an affirmative obligation on airlines to
return consumer funds back to ticket
agents within seven days of receiving a
refund request from a ticket agent when
the airlines are not the merchants of
record for the ticket sales. While the
Department agrees that airlines should
return consumer funds to ticket agents
promptly in these situations, it is not
persuaded that DOT intervention into
airlines’ and ticket agents’ business and
contractual arrangements is necessary at
this time. The Department’s authority to
prohibit unfair or deceptive practices in
49 U.S.C. 41712 is intended to protect
consumers. The Department expects
that airlines and ticket agents both have
the interest to negotiate, form, and
adhere to a standard procedure in
handling consumer funds to ensure that
ticket transactions and refunds are
processed smoothly to the benefit of
consumers, as well as the businesses
involved.
Although the Department does not
believe that ticket agents’ obligation to
refund should be dependent upon
receiving the return of the funds from
airlines, we acknowledge that before
issuing the refund, the ticket agent may
need further information to verify
whether a refund is due under the
Department’s regulation. The NPRM
states that in most situations involving
cancellations or significant changes,
there would be sufficient information
(e.g., airlines’ publications on
cancellations or flight itinerary change
notifications sent to consumers) to
confirm refund eligibility without
contacting airlines; however, after
reviewing comments, we realize that
even in those situations, ticket agents
may need airlines’ confirmation that the
affected consumers did not accept
alternative transportation or other
compensation in lieu of refunds.
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Comments submitted by ticket agents
also state that airline ticket settlement
systems often incorporate a process
under which airlines need to issue
refund authorization codes to prevent
duplicate refunds and fraud. To ensure
that refunds to consumers are not
unreasonably delayed because ticket
agents are waiting on airlines’
confirmation of refund eligibility, we
are requiring airlines to determine
whether consumers are eligible for
refunds and if so, inform ticket agents
of the refund eligibility without delay
upon receiving the refund request from
the ticket agent. The Department’s
Office of Aviation Consumer Protection
will determine the timeliness of airlines’
response based on the totality of the
circumstances, including how quickly
the airline took steps upon receiving the
ticket agent’s refund request to
determine refund eligibility and
whether the airline informed the ticket
agent of the refund eligibility as soon as
it has confirmed it. The Department
expects airlines and ticket agents to
work together to develop and enhance
channels of communication to ensure
that information regarding passengers’
refund requests and eligibility are
transmitted in an effective, accurate,
and efficient manner.
This final rule makes it an unfair
practice for airlines to fail to timely
confirm refund eligibility and
communicate that eligibility to ticket
agents. Airlines not confirming refund
eligibility in a timely manner slow the
refund process and cause substantial
harm to consumers. This harm is not
reasonably avoidable by consumers, as
they have no control over how soon
airlines inform ticket agents that a
refund is due so the ticket agents can
begin to process the refund. The
Department also sees no benefits to
consumers and competition from this
conduct. On the contrary, the
Department views that not imposing
this requirement on airlines would
allow airlines or ticket agents to keep
money that is due to consumers
indefinitely, which in turn harms
consumers and competition by
penalizing good customer service and
rewarding dilatory behavior.
For codeshare or interline itineraries
sold by a carrier, the Department is
requiring the carrier that ‘‘sold’’ the
airline ticket (i.e., the merchant of
record for the ticket transaction) to
provide the refunds, as this is the most
straightforward standard from
consumers’ perspective. Consistent with
the rationale for the ‘‘merchant of
record’’ approach that we adopted in
determining ticket agents’ refund
obligation, we believe the carriers who
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are the merchants of record for the ticket
transactions are in the best position to
process and issue refunds as they have
direct visibility of the passengers’
payment instruments information and
the total amounts paid for the
itineraries. The Department further
notes that in most codeshare or interline
itineraries, the marketing carriers are the
merchants of record. The Department’s
focus is on making consumers whole
when their flights are cancelled or
significantly changed, and we decline to
regulate how airlines manage the
transfer and the return of funds among
themselves in the event of ticket
refunds, as we expect that airlines
engaging in codeshare or interline
arrangements will work together on
contractual agreements to ensure that
account settlements are conducted
through the normal course of business
dealing following refunds provided to
consumers.
6. Timing of Refunds
The NPRM: As explained in the
NPRM, the Department’s current refund
timeframes are based on the form of
payment used for the ticket purchase,
i.e., seven days for credit card purchases
and 20 days for cash and other forms of
payment. 14 CFR part 374 is the
Department’s regulation implementing
the Consumer Credit Protection Act and
its regulations, including Regulation Z
of the Consumer Financial Protection
Bureau (CFPB) regulation, 12 CFR part
1026 (Regulation Z), with respect to
airlines issuing refunds for credit card
purchases. Regulation Z, in relevant
provision under 12 CFR 1026.12(e)(1)
provides that ‘‘when a creditor other
than the card issuer accepts the return
of property or forgives a debt for
services that is to be reflected as a credit
to the consumers’ credit card account,
that creditor shall, within 7 business
days [emphasis added] from accepting
the return or forgiving the debt, transmit
a credit statement to the card issuer
through the card issuers’ normal
channels for credit statements.’’ The
Department’s own regulation in 14 CFR
259.5(b)(5) imposes a refund timeline of
20 days on airlines for purchases made
by cash or check. It also specifies that
the refund timeline starts after airlines
receive the complete refund request.
With respect to ticket agents, the
Department’s regulation in 14 CFR
399.80 requires that they make ‘‘proper
refund promptly’’ when services cannot
be performed as contracted. Because
Regulation Z impacts all consumer
credit, ticket agents are also subject to
the refund requirement of Regulation Z
(12 CFR 1026.12(e)(1)) with respect to
refunds of credit card purchases. Under
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its authority against unfair or deceptive
practices, 49 U.S.C. 41712, the
Department also requires that ticket
agents provide refunds for purchases by
payments other than credit cards within
a reasonable time.
The NPRM’s proposal on ‘‘prompt’’
refunds when they are due requires
airlines to issue refunds ‘‘within 7 days
of a refund request as required by 14
CFR 374.3 for credit card purchases, and
within 20 days after receiving a refund
request for cash or check or other forms
of purchases.’’ 44 Similarly, the
proposed rule on ticket agents defines
‘‘a prompt refund’’ as ‘‘one that is made
within 7 days of receiving a refund
request as required by 12 CFR part 1026
for credit cards purchases, and within
20 days after receiving a refund request
for cash or check or other forms of
purchases.’’ 45 The NPRM sought
comments on whether these timeframes
are appropriate when a carrier has
cancelled or made a significant change
to a scheduled flight to, from, or within
the United States and consumers found
the alternative transportation offered to
be unacceptable.
Comments Received: IATA supported
the 7/20-day refund timelines under
normal circumstances but argued that
during public health emergencies,
airlines should have at least 30 days to
process a refund request. IATA stated
that due to spikes of refund requests,
some airlines facing financial
difficulties had to choose between
delaying refunds or going out of
business. Air Canada argued that
carriers should have no less than 30
days to issue refunds in the original
form of payment, and the refund
timeline should be suspended during
major crises. Air Canada stated that the
proposed timelines are disconnected
from the actual time needed for refund
processing by various parties involved,
and the situation can be more complex
when the original ticket was sold
through a ticket agent. Air Canada
further argued that the refund timelines
should consider situations that trigger
the need for more time, such as the
original form of payment no longer
being valid, and the time needed to
calculate the refund amount when the
ticket is partially used. A4A commented
that the Department should ensure that
the 7/20-day refund timelines are
consistent with longstanding DOT
enforcement precedent and Regulation
Z by clarifying that they are in reference
to business days and not calendar days.
44 See proposed rule text for 14 CFR 259.5(b)(5),
87 FR 51550, 51576.
45 See proposed rule text for 14 CFR 399.80(l), 87
FR 51550, 51579.
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USTOA representing tour operators
commented that the 7/20-day timelines
are reasonable so long as the sellers are
in possession of the funds. It further
elaborated that for ticket agents,
counting of the timelines should not
begin until the ticket agents are in
possession of the funds and have
received refund eligibility confirmation
from airlines.
Ticket agent representatives also
provided comments during the ACPAC
meetings regarding the financial
difficulties they face if they are required
to issue refunds before receiving the
funds back from airlines. In recognition
of the potential financial impact on
small businesses, the ACPAC
recommended that the Department
revise the proposal to provide some
relief for ticket agents. Specifically, the
ACPAC recommended that the
Department impose a requirement on
airlines to return the consumer funds to
ticket agents within seven days of
receiving the refund requests, and that
ticket agents that qualify as ‘‘small
businesses’’ under the standard set forth
by the Small Business Administration
(SBA) be given up to 14 days, instead
of seven days, to issue refunds to
consumers. 46 In a joint comment filed
by A4A and IATA, the carrier
representatives stated that this ACPAC
recommendation conflicts with Federal
Reserve regulation (12 CFR 1026.11) and
the Department’s rule (14 CFR 374.3).
They further commented that the NPRM
did not propose to change the
Department’s refund regulations or
discuss a different refund standard and
therefore adopting a different refund
standard in a final rule would violate
the notice and comment requirements of
the Administrative Procedure Act.
Furthermore, airline commenters
expressed concerns about passengers
not informing carriers of their decisions
to reject the alternative transportation
offered until close to the flight’s
departure, therefore depriving airlines
the opportunity to resell those seats.
IATA and Air Canada argued that
passengers should have the obligation to
take positive steps to inform airlines
within a reasonable time after the
passenger is notified of a significant
change and offered alternative
transportation. During an ACPAC
meeting, the member representing
airlines also expressed similar concerns.
Some consumer commenters urged
the Department to require airlines to
46 Among the four members of ACPAC, three
members voted in support of this recommendation
and the member representing airlines abstained,
stating that he is unclear about whether this
recommendation is consistent with other Federal
regulations, i.e., Regulation Z.
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issue ‘‘automatic’’ refunds. They argued
that airlines have the incentive to adopt
complex refund processes that make
requesting refunds cumbersome and
difficult for consumers, engineered to
dissuade consumers from receiving their
due compensation. Some commenters
provided examples of inefficient and
complex refund request procedures
currently adopted by airlines, including
hidden refund request links on their
websites, excessive data input
requirements from consumers, lengthy
and confusing refund request forms, and
excessive hold time for requesting
refunds over the telephone. In addition,
PVA and United Spinal Associates
commented that when alternative
transportation does not provide the
same or similar accessibility features or
seating arrangements, this deficiency
should prompt an automatic refund
offer.
DOT Responses: Based on the
comments received, the Department is
addressing—(i) the meaning of prompt
refunds, including during public health
emergencies; (ii) automatic refunds as a
way to reduce cumbersome refund
request processes for consumers and
ensure consumers’ rejection of the
alternative transportation offered do not
deprive airlines of the opportunity to
resell those seats; (iii) commencement of
refund deadlines; and (iv) the meaning
of business day for purpose of providing
refunds.
(i) Prompt Refunds
In this final rule, we are requiring that
airlines and ticket agents provide
prompt refunds when due. Prompt is
defined to mean within 7 business days
of refunds becoming due for credit card
purchases, and within 20 calendar days
of refunds becoming due for purchases
by cash, check, or other forms of
payment. To the extent the purchase is
made by a debit card, the Department
has reviewed the relevant definitions in
CFPB’s regulations, including
Regulation Z, and has determined that
a typical debit card does not fall under
the 7-day refund timeline that only
applies to ‘‘credit card’’ and therefore
would be subject to the 20-day
timeline.47
The Department has considered
airlines’ suggestion of additional time to
47 The CFPB regulation defines a ‘‘credit card’’ as
any card, plate, or other single credit device that
may be used from time to time to obtain credit. See
12 CFR 1026.2(a)(15)(i). The term ‘‘credit’’ is
defined as the right to defer payment of debt or to
incur debt and defer its payment. See 12 CFR
1026.2(a)(14). In contrast, ‘‘debit card’’ is defined as
any card, plate, or other single device that may be
used from time to time to access an asset account
other than a prepaid account. See 12 CFR
1026.2(a)(15)(iv).
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provide refunds including one airline’s
request for no less than 30 days to issue
refunds and to suspend the refund
deadlines during major crisis. The
Department believes that maintaining
the 7/20-day refund timeline is
reasonable as airlines and ticket agents
have been required to comply with
these timeframes for decades. The
Department is also not convinced that
extending or suspending the 7-day
timeline for credit card purchases
during large-scale air travel disruptions
is either permissible under Regulation Z
or warranted. Taking the COVID–19
pandemic as an example, although the
Department recognizes the challenges
airlines and ticket agents faced when
dealing with a significant increase of
refund requests, the Department also
recognizes the financial difficulties
average consumers faced during the
pandemic, including the impact of not
receiving timely refunds of airline
tickets they paid for when the service is
cancelled or significantly changed.
During such an event, the Department
considers consumers to be in need of
the regulatory protection afforded by the
prompt refund requirements specified
in this final rule. As discussed earlier,
the Department is adopting the proposal
to hold ticket agents responsible for
refunds when they are the merchants of
record for the ticket transactions. We
have considered comments by
numerous small ticket agents and the
ACPAC’s recommendation to provide
small ticket agents additional times to
issue refunds by credit cards. After a
careful review of Regulation Z and
relevant interpretations by CFPB, we
have determined that the Department
does not have the discretion to extend
the 7-day refund timeline for credit card
purchases, which would contradict
Regulation Z. The Department
acknowledges the concerns of small
ticket agents regarding the financial
burden to issue refunds before receiving
the funds back from airlines. We note
that, as several ticket agent commenters
point out, that less than 10% of ticket
transactions involving air travel have
ticket agents as the merchants of record,
for which they will be obligated to issue
refunds. The Department expects that
outside of a massive disruption to air
transportation on a national or global
scale, ticket refund requests made to
small ticket agents due to airline
cancellation or significant change
should be rare. In addition, the
Department is mandating that airlines
confirm refund eligibility before a
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refund is due by ticket agents.48 We
expect that this requirement, along with
the tolling of the refund timeline
discussed below, will alleviate the
financial burden on small ticket agents.
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(ii) Automatic Refunds
The NPRM proposed that the 7/20day refund timelines start upon airlines
or ticket agents ‘‘receiving a complete
refund request’’ from consumers. After
considering the comments from
consumers and the industry, the
Department has determined that under
certain circumstances where consumers’
rights to refunds and their intention to
receive a refund are unequivocal, using
consumers’ explicit refund requests as
the starting point for computing the
refund timelines is an approach that
imposes an unnecessary burden on
consumers. Consumers in comments
expressed their frustrations about the
cumbersome process to request and
receive a refund following a flight
cancellation or significant change, at
times waiting for hours on the phone,
digging through cumbersome airline
websites to find a link for requesting a
refund, or having to navigate through
extra ‘‘digital paperwork’’ to complete a
refund request form. The Department is
persuaded by consumers that in these
circumstances automatic refunds are
warranted. For example, if a flight is
cancelled and no alternative
transportation or compensation is
offered to the passenger in lieu of a
refund, the carrier must refund the
consumer because the contracted
service was not provided. Similarly, if a
flight is significantly changed and the
consumer rejects the significantly
changed flight and no alternative
transportation or compensation is
offered to the passenger in lieu of a
refund, the carrier must refund the
consumer because the contracted
service was not provided. It is
inefficient and unreasonable for the
carrier to wait to receive an explicit
refund request from the consumer in
48 In an enforcement notice issued by the
Department’s Office of Aviation Consumer
Protection (OACP) on March 12, 2020, the
Department states that it interprets the requirement
for ticket agents to provide refunds to include
providing refunds in any instance when the
following three conditions are met: (1) an airline
cancels or significantly changes a flight, (2) an
airline acknowledges that a consumer is entitled to
a refund, and (3) passenger funds are possessed by
a ticket agent. See, https://www.transportation.gov/
airconsumer/FAQ_refunds_may_12_2020. The
Department has reconsidered this issue and
determined that the final rule appropriately ensures
that consumers receive prompt refunds as required
by the rule and are not caught in the middle
between airlines and ticket agents, but also provides
safeguards for ticket agents in the requirement for
airlines to verify refund eligibility before the refund
timeline starts.
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such situations. Also, if alternative
transportation or a travel credit,
voucher, or other compensation is
offered to a consumer for a canceled
flight or a significantly changed flight
and the consumer rejects the alternative
transportation or compensation offered,
then the carrier should refund the
consumer without further delay because
the contracted service was not provided
and the consumer rejected the
alternative offered. It should not be
necessary for the consumer to separately
request a refund because the rejection of
the alternatives offered is tantamount to
a request for a refund.
The Department acknowledges
airlines’ concerns about consumers not
rejecting a significantly changed flight
or a booked alternative flight itinerary
after being notified of such an offer until
closer to flight operation, thus depriving
airlines the opportunity to sell the seats
for revenue. Under this final rule,
airlines may set a deadline that provides
reasonable time for a consumer to
decide whether to accept the existing
itinerary with a significant change or an
airline’s offer of alternative
transportation in lieu of a refund. To
determine whether a carrier provided
consumers reasonable time to consider
the options and make a decision, the
Department will look primarily at when
the cancellation or significant change
occurred, how soon after the carrier
became aware of the flight cancellation
or significant change that the carrier
notified affected consumers of this event
and made an offer of alternative
transportation, and how close the
consumer notification is to the
scheduled departure date of the
significantly changed flight or the
alternative transportation offered.
The Department recognizes that some
consumers may not respond to a
carrier’s offer of a significantly changed
flight or an alternative flight by the
deadline. To ensure that consumers
understand the potential consequences
of not responding by the deadline, the
Department is also requiring airlines
when notifying affected consumers of a
significantly changed flight or offering
alternative flight to inform consumers
whether the carrier will treat the lack of
response by the deadline as a rejection
(i.e., prompt refund to be provided but
reservation is no longer held for
passenger) or an acceptance (i.e.,
reservation held for passenger but
passenger forfeits right to a refund) of
the offer. A carrier may determine
whether it will treat the lack of response
by the deadline as a rejection or an
acceptance of the offers, but such
determination must be adopted as a
customer service policy applicable
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universally to all passengers of the
carrier. Any change to the policy applies
only to passengers who booked their
tickets after the effective date of the
change. If a carrier chooses not to set a
deadline for the consumer to respond to
the offer, the carrier is essentially giving
the consumer the option to decide until
the date of the significantly changed
flight or the alternative flight as to
whether to accept or decline the offer.
Under these circumstances, the
consumer taking the significantly
changed flight or the alternative flight is
an acceptance of the offer and the
consumer not taking the flight is a
rejection of the offer. Again, if the
consumer has rejected an offer of
alternative transportation (informed
airline of rejection of alternative
transportation, failed to respond within
the timeframe provided by the carrier
after carrier notified passenger that lack
of a response to offer of alternative
transportation would be deemed a
rejection, or did not take the flight when
the carrier did not set a deadline for a
response to an offer of alternative
transportation), there is no need for the
consumer to send a separate request for
a refund.
To ensure consumers have reasonable
time to consider and respond to the
options offered by a carrier, the
Department is requiring carriers to
notify consumers of the options
available to them in a timely manner. It
is an unfair practice for airlines to not
timely notify consumers of their options
yet impose a short deadline to respond.
Such a practice harms consumers by
depriving them of a reasonable time to
consider their options. The failure to
fully inform consumers of the
consequence of not responding by the
deadline (i.e., losing their money paid
for the ticket or losing their seats on the
booked flights) is also an unfair practice.
Such a practice harms consumers by
omitting a material matter in the
notification, and the omission would
negatively affect consumers’ conduct.
Both harms are not reasonably avoidable
by consumers because consumers would
not have known about material matters
unless they were informed. These
practices do not benefit consumers or
competition—rather these practices
would hinder transparency and causes
inefficiency in airlines’ inventory
management. As such, the Department
is requiring carriers to provide timely
notification to affected consumers about
the options available to consumers
when a flight is canceled or significantly
changed, any responsive deadline, and
the consequence of not responding by
the deadline. For carriers that have in
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place notification subscription services,
this notification must be provided
through media that the carriers offer and
the subscribers choose, including
emails, text messages, and push notices
from mobile apps. As the content of the
notification may be over the size limits
of text messages or mobile app push
notices, carriers may include in a text
message or push notice a link to the
consumer’s reservation page on its
website, where the full content of the
notification is displayed.
In addition to notifying affected
consumers, this final rule requires that
carriers provide clear, conspicuous, and
accurate information in their customer
service plan regarding the carriers’
policies and procedures on refunds and
rebooking including when consumers
are non-responsive to carriers’ offers of
significantly changed or alternative
flights. More specifically, the
Department is amending 14 CFR 259.5
to require carriers to incorporate into
their Customer Service Plans a
commitment to disclose relevant refund
and cancellation policies as provided in
14 CFR part 260, including policies
related to consumers’ right to a refund
due to airline-initiated cancellations or
significant changes, consumers’ right to
‘‘automatic refunds’’ under certain
circumstances, consumers’ right to
refunds and rebooking when consumers
are non-responsive to carriers’ offers of
significantly changed or alternative
transportation. This information is
intended to better inform consumers
about their rights before purchasing
tickets and whenever questions arise
later. The Department considers any
misrepresentation or omission of
material matters regarding a consumer’s
rights when airlines and ticket agents
publish their refund polices or notify
consumers affected by a canceled or
significantly changed flight to constitute
an unfair practice in violation of 49
U.S.C. 41712. Consumers who are not
provided complete and accurate
information about their rights are not
likely to choose the options that best
suit their needs. For example,
consumers who are offered alternative
transportation but not notified of the
need to respond before an airlineimposed deadline may lose their rights
to a refund or lose the flight reservations
that they intend to keep. This is a
substantial harm that cannot be
reasonably avoided by consumers
because consumers have no way to fully
understand their rights without being
notified by airlines or ticket agents.
Airlines or ticket agents not providing
clear, accurate, and complete
notifications to consumers harms
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competition because it hinders the
development of open and fair
competition that maximizes consumer
choices based on information
transparency. The Department further
views such misrepresentation or
omission as a deceptive practice
because misrepresenting or omitting a
material fact relating to a consumer’s
right to a refund or other options
available in lieu of a refund in the
carrier’s customer service plan is likely
to deprive that consumer of important
information that could impact which
carrier the consumer selects for the air
transportation and similar
misrepresentation or omission in
notifications provided to consumers
affected by significant change and
cancellation could impact the choice
that the consumer makes between a
refund and another option.
(iii) Commencement of Refund
Timelines
The Department’s existing refund
regulation requires that a refund must
be provided within the required
timelines after receiving a ‘‘complete
refund request.’’ The Department did
not use this language in the proposed
rule but ‘‘acknowledge[d] that for
transactions in which a ticket agent
would be responsible for issuing a
refund if due, before issuing the refund,
the ticket agent may need further
information to verify whether a refund
is due under the Department’s
regulation.’’ 49 After carefully reviewing
the comments received, the Department
is of the view that the obligation of a
ticket agent to provide refunds should
begin when the ticket agent receives
confirmation about the passengers’
refund eligibility from airlines. Under
this final rule, the 7/20-day refund
timelines start at the time the ticket
agent receives the eligibility
confirmation from the airline. For
example, if an airline confirms that the
passenger is eligible for a refund on day
3, the 7 or 20-day refund timeline for
the ticket agent starts on day 3. Airlines
and ticket agents are encouraged to
establish effective communication
channels and airlines are expected to
work expeditiously to confirm refund
eligibility. The Department does not
view tolling the refund timelines for
lack of essential information needed for
refunds to be contradictory to
Regulation Z, as Regulations Z’s 7-day
refund timeline starts from the time a
‘‘creditor other than the card issuer’’
‘‘accepting the return [of property] or
forgiving the debt.’’ In the Department’s
view, an airline or ticket agent should
49 87
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not be expected to accept the return of
property or forgive the debt until it can
be confirmed that the consumer is
eligible.
(iv) Business Days
In this final rule, the Department is
requiring refunds be provided within
seven business days of when it is due
for credit card purchases and within 20
calendar days of when it is due for cash
and other forms of payment. The
Department agrees with A4A’s comment
that the 7-day refund timeline should be
consistent with CFPB’s Regulation Z.
The CFPB regulation defines ‘‘business
days’’ as a day on which the creditor’s
offices are open to the public for
carrying on substantially all of its
business functions.50 CFPB’s Official
Interpretation of its definition explains
that ‘‘[a]ctivities that indicate that the
creditor is not open for substantially all
of its business functions include a
retailer’s merely accepting credit cards
for purchases. . . .’’ 51 CFPB also
explains that ‘‘activities that indicate
that the creditor is open for
substantially all of its business
functions include the availability of
personnel to make loan disbursements,
to open new accounts, and to handle
credit transaction inquiries.’’ 52
Based on CFPB’s Official
Interpretation of its definition, the
Department has decided not to use the
days that airlines and ticket agents
accept credit cards for purchases of
airline tickets and related services to
determine business day. Instead, the
Department is focusing on the days on
which the offices of airlines and ticket
agents are typically open to process
refund requests and defining business
day to be Monday through Friday,
excluding Federal holidays in the
United States. By defining business day
in this simplified manner, the
Department is providing regulatory
clarity to airlines and ticket agents
regarding their obligations to provide
prompt refunds. Importantly, consumers
can also easily understand their rights
and advocate for themselves when
regulations are defied or disregarded.
The Department expects that this
clarification regarding refund timeline
for credit card payment refunds will
enhance transparency and consistency
in the airline ticket refund process but
will revisit this issue in the future
should it be necessary.
The Department notes that the CFPB
regulation is not applicable to the DOT
50 12
CFR 1026.2(a)(6).
51 https://www.consumerfinance.gov/rules-policy/
regulations/1026/interp-2/#2-a-4-Interp-3.
52 Id.
FR 51550, 51563.
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requirement concerning providing
refunds within 20 days for purchases
paid by a payment other than a credit
card. As is the case currently, the
Department is continuing to require
airlines and ticket agents to provide
refunds for non-credit card purchases
within 20 calendar days. The
Department has amended the regulation
text accordingly.
ddrumheller on DSK120RN23PROD with RULES3
7. Amount and Form of Refunds
The NPRM: Under the NPRM, when
ticket refunds are due because of a
significantly changed or canceled flight,
a passenger would be entitled to receive
a full refund equal to the ticket purchase
price including government-imposed
taxes and fees and carrier-imposed fees
and surcharges (such as fuel
surcharges), minus the value of any air
transportation that is already used by
the passenger. To calculate the value of
any used portion of the air
transportation when determining the
amount of refunds, the Department
suggested that airlines rely on
established industry practices and
guidelines.
On the form of refunds, the NPRM
explained that the Department intends
to explore ways to provide consumers,
carriers, and ticket agents more
flexibility in issuing and receiving
refunds. As such, the NPRM proposed
to allow airlines and ticket agents to
choose whether to refund passengers by
returning the money in the original form
of payment or by providing the refund
in cash or a form of cash equivalent,
including prepaid cards, electronic fund
transfers to passengers’ bank accounts,
or digital payment methods such as
PayPal or Venmo. The NPRM stated that
a carrier- or ticket agent-issued travel
credit or voucher or a store gift card is
not considered a cash equivalent form of
payment because these forms of
compensation are not widely accepted
in commerce. Further, the Department
considered that when a carrier or ticket
agent issues a prepaid card, any
maintenance or usage related fees
should be prepaid into the card by the
issuer in addition to the full amount of
refund that is due. The NPRM asked
whether this proposal would be
beneficial to consumers, carriers, and
ticket agents as intended and whether
there are any unintended negative
impacts.
Comments Received: Airlines
generally did not object to the proposal
to require a refund of the full ticket
price including taxes and fees. However,
A4A and IATA commented that the
refund amount should exclude any
government taxes and fees that are non-
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refundable. This position was supported
by the U.S. Chamber of Commerce.
FlyersRights argues that amount of
refunds for cancelled or significantly
changed flights should include a
premium if the cancellation or
significant change occurs close to the
scheduled departure date as consumers
will likely have to pay a much higher
price for another ticket. Also, hundreds
of consumer commenters stated that a
refund of the ticket is inadequate to
address the costs and inconvenience to
passengers when a flight cancellation or
significant change occurs mid-journey.
PVA stated that a refund by itself is
useless when a passenger with a
disability is stranded.
On the form of refunds, most airlines
commenters supported the proposal to
allow carriers and ticket agents to
choose between the original form of
ticket payment and another form that is
cash-equivalent, stating that this would
provide flexibility to carriers, ticket
agents, and consumers. Spirit Airlines
argued that refunds should be in the
original form of payment, expressing
concerns about the privacy of cash
equivalent payments that potentially
expose consumers to scam and
confusion. Qatar Airways also
supported the position that the default
refund form should be in the original
form of payment and stated that only
when the original form of payment
service declines the refund should
another form of payment be used. Travel
Management Coalition also favored the
refund being issued in the original form
of payment and added that if the
Department directs another form of
refund, the refund timeframe should be
extended. Global Business Travel
Association commented that refunds
should be directed back through the
original form of payment for business
travelers to ensure that the business, not
the traveler, is refunded.
DOT Response: After carefully
considering the comments, the
Department is finalizing the proposal to
require airlines and ticket agents to
provide full refunds to eligible
passengers of the ticket purchase price,
minus the value of any portion of
transportation already used. The
refunds must include all governmentimposed taxes and fees and airlineimposed fees, regardless of whether the
taxes or fees are refundable to airlines.
The Department disagrees with the
airlines’ position that consumers should
bear the burden of any non-refundable
government taxes and fees when
consumers have not initiated, caused, or
contributed to the cancellation or
significant changes to their flight
itineraries.
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Regarding how best to calculate the
value of any portion of transportation
already used, the Department
emphasizes that carriers are expected to
adhere to established industry practice
and treat consumers fairly. The
Department will view any arbitrary
deviation from industry practice in
calculating the value of the unused
portion to the detriment of the
consumer to be indicative of an unfair
practice. Further, any assigned value to
a used or unused segment that is
significantly disproportionate to the
distance covered by that segment (e.g.,
assigning 10% of the total ticket value
to the unused segment that covers 50%
of the total travel distance) will be
viewed as a prima facie unfair practice
unless carriers can justify the
assignment with established and
verifiable industry practice.
Although the final rule requires
carriers to refund only unused portion
of the ticket price if a passenger has
used a part of the ticket, the Department
acknowledges the comment from a
consumer organization regarding
consumers having to pay a premium to
purchase a new ticket when their flights
are cancelled or significantly changed
close to the scheduled departure date, as
well as comments that flight
cancellations or significant changes
impact consumers more significantly
when they have already traveled a
portion of the itineraries, particularly
persons with disabilities. Consumers
stranded at a connecting airport by a
cancellation or significant change face
not only the challenge of limited
choices for continuing travel or
returning to their origination airport, but
also increased cost of food, lodging and
other expenses. These comments reflect
consumers’ concern that simply
refunding the ticket price may not
adequately compensate the actual cost
to consumers from airline cancellations
or significant changes. The
Department’s rulemaking on Rights of
Airline Passengers When There Are
Controllable Flight Delays or
Cancellations 53 intends to examine how
best to ensure passengers’ needs are
addressed beyond refunds including
essential services such as meals,
rebooking, and hotel as well as
compensation to mitigate passenger
inconveniences when there is a
controllable cancellation or delay.
To reduce the likelihood of
consumers embarking on a journey
without knowledge of a downstream
cancellation or significant change, the
Department reminds carriers of their
obligation under 14 CFR 259.8 to
53 See
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promptly provide to passengers who are
ticketed or hold reservations, and to the
public, information about a change in
the status of the flight within 30
minutes after the carrier becomes aware
of a change in the status of a flight.
These notifications are important to
ensure that consumers are aware of any
known flight itinerary or schedule
changes and cancellation that would
affect their travel downstream before
they begin the journey to avoid being
stranded mid-travel and facing difficult
choices. Also, the Department reminds
carriers of their obligation under 14 CFR
259.8 to identify and adhere to the
services that it promises to provide
consumers in their customer service
plan to mitigate passenger
inconveniences resulting from flight
disruptions. Beginning in September
2022, the large U.S. carriers have made
significant changes to their customer
service plans to improve services
provided to passengers when their
flights are canceled or delayed because
of an airline issue (i.e., controllable
cancelations and delays). As a result,
many U.S. customers impacted by
controllable cancellations and delays
are entitled today to receive
reimbursements for expenses such as
meals, hotels, and ground
transportation.54 On the form of
refunds, the Department is convinced by
commenters that the best approach is to
require that refunds be in the original
form of ticket purchase, and allow
airlines and ticket agents to offer, in
addition to the original form of
payment, other cash-equivalent
payments. The Department views that
making the original form of payment the
default refund form has several benefits.
First, it ensures that all passengers, as a
minimum, can receive their money back
in the same way they paid for the
tickets, therefore avoiding the situations
where consumers are forced to accept an
alternative payment form through which
they have no way to access cash
directly. Second, it expedites and
streamlines the process of refunds in
most situations by simply reversing the
ticket purchasing process using the
payment information already available
to airlines or ticket agents. Thirdly, it
avoids complications in business travel
by ensuring that businesses, as opposed
to travelers, receive the refunds. The
Department notes that under this final
rule, all airlines and ticket agents are
required to provide refunds in the
original form of payment, unless the
54 See https://www.transportation.gov/
airconsumer/airline-customer-service-dashboard,
an easy-to-use dashboard that displays airlines’
commitments.
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passenger has agreed to a different form
of payment. Airlines and ticket agents
are permitted, but not required, to offer
other forms of refunds that are
equivalent to cash, but only if it is made
clear to the customer that they have the
right to receive a refund in the original
form of payment. Having received no
comments on the proposed definition
for ‘‘cash equivalent,’’ the Department is
adopting the definition as proposed,
including the prohibition on requiring
consumers to bear the burden for
maintenance fees, usage fees, or
transaction fees related to a cash
equivalent payment method.
8. Offers of Travel Vouchers, Credits
and Other Compensation and
Notification to Consumers of Their Right
to a Refund
The NPRM: The Department proposed
to allow airlines and ticket agents to
offer but not require other compensation
choices such as travel credits or
vouchers and store gift cards in lieu of
refunds. The NPRM recognized that
while a refund in the original form of
payment or cash or a cash equivalent
form of payment would be preferred by
many passengers, some passengers may
prefer receiving travel credits or
vouchers or store gift cards. The
proposal would allow airlines and ticket
agents the flexibility, at their discretion,
to work with passengers by offering
more choices of compensation for
interrupted travel plans.
To ensure consumers know their right
to a refund, the Department also
proposed to require carriers and ticket
agents inform consumers that they are
entitled to a refund if that is the case
before making an offer for travel credits,
vouchers, or other compensation in lieu
of refunds. Further, under the
Department’s proposal, the option for
carriers and ticket agents to offer
compensation other than refund of cash
or cash equivalent when a carrier
cancels or makes a significant change to
a flight itinerary must not be misleading
with respect to the passengers’ rights to
receive a refund. Under the proposal,
airlines and ticket agents must clearly
disclose any material restrictions,
conditions, and limitations on the
compensation they offer, so consumers
can make informed choices about which
types of compensation and refunds
would best suit their needs.
Comments Received: FlyersRights and
several consumer commenters
expressed their support for the proposal
to require airlines to notify consumers
of their rights to a refund before offering
other compensation. Some commenters
also stated that such disclosure should
be in clear language, using terms that
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32787
ordinary individuals would understand.
All airline commenters who commented
on non-cash equivalent compensation
supported the proposal to allow airlines
and ticket agents to offer these types of
compensation to consumers who are
eligible for refunds. IATA and SATA
also commented that the Department
should allow carriers to offer refunds
when travel credits or vouchers are
required by the regulation. National
Consumers League supported the
proposal to allow airlines and ticket
agents to offer non-cash equivalent
compensation but argues that any travel
credits or vouchers offered should never
expire.
DOT Response: This final rule is
requiring airlines and ticket agents to
inform passengers entitled to receive a
refund of their right to a refund before
making an offer for travel credits,
vouchers, or other compensation in lieu
of refunds. The Department is
persuaded by comments of the
importance of disclosing to consumers
their rights to a refund up front in plain
language. Passengers lacking this
information may not be able to make an
informed decision as to whether to
obtain a refund or accept other
compensation. For similar reasons, the
Department is also requiring airlines
and ticket agents to inform passengers of
their rights to a refund, if this is the
case, when offering a significantly
changed flight or alternative
transportation for a significantly
changed or cancelled flight.
To provide more flexibilities and
choices to consumers, the Department is
allowing airlines and ticket agents to
offer, in addition to refunds, other
compensation to eligible consumers.
The Department emphasizes the
importance of carriers and ticket agents
providing clear, prominent, and
accurate disclosures to consumers of
their rights to refunds when offering
these options, and of any material
restrictions, limitations, and conditions
on any compensation offered as an
alternative to refunds. The Department
views any misrepresentation or
omission of these matters to be unfair
and deceptive practices in violation of
49 U.S.C. 41712. A consumer’s
entitlement to a refund and restrictions,
limitations, and conditions on
alternatives offered such as travel
credits and vouchers in lieu of a refund
are material matters that are likely to
affect consumers’ decisions with respect
to whether they accept the offered
voucher or credit. The Department
views misrepresenting or omitting the
consumer’s right to a refund or the
restrictions, limitations, and conditions
that apply on the compensation offered
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as an alternative to refunds to be a
deceptive practice because it deprives
that consumer of important information
that could impact the choice that the
consumer makes between a refund and
another option. During the COVID–19
pandemic, the Department became
aware of many consumers who accepted
travel credits and vouchers from airlines
for canceled or significantly changed
flights because they were not aware of
their right to a refund or because they
were not aware of the restrictions that
applied on their travel credits and
vouchers. This conduct is also an unfair
practice because it causes substantial
consumer harm by depriving consumers
of the knowledge that they are entitled
to a refund, which is not reasonably
avoidable by consumers as they are
unable to obtain this knowledge unless
they are informed by the airlines or
ticket agents. This conduct also harms
competition because, by avoiding
issuing refunds to consumer, entities
engaging in this conduct gain unfair
advantages over entities providing full
disclosure to consumers about their
right to a refund.
9. Service Charges
The NPRM: The NPRM proposed that
airlines may not charge a fee when
issuing a refund following a carrierinitiated cancellation or significant
change and that the terms or conditions
in airline contracts of carriage should be
consistent with the proposed regulation.
With respect to refunds issued by ticket
agents, the NPRM proposed that ticket
agents are permitted to retain the service
fee they charged for ticket issuance at
the time of purchase in recognition that
ticket agents are providing a service
apart from airfare purchase and that
service has been completed regardless of
whether the passenger took the flight.
The NPRM further proposed that ticket
agents may also charge a fee for issuing
refunds, reasoning that, unlike airlines,
ticket agents do not initiate the
cancellation or significant changes that
result in a refund being due, nor do the
ticket agents have any control over the
cancellation or significant changes to a
flight itinerary. The NPRM emphasized
that the amount of the ticket issuance
service fee or refund processing fee that
ticket agents may retain must be on a
per-passenger basis and the existence of
the fee must be clearly and prominently
disclosed to consumers at the time they
purchased the airfare.
Comments Received: The Department
received comments from consumers,
ticket agents, and airlines regarding
service fees. Several consumers opposed
allowing refund processing fees charged
by airlines. One commenter noted that
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if airlines are allowed to charge such a
fee, there is nothing to prevent them
from charging $100 or more. The same
commenter added that processing
refunds is computerized and can be
done with a few keystrokes. Qatar
Airways asserted that airlines should be
permitted to collect service fees,
including fees for processing refunds.
Ticket agent representatives supported
the proposal to allow ticket agents to
retain the ticket issuance service charge
and refund service fee, agreeing with the
Department’s rationale that issuing
tickets and processing refunds are
separate services provided by ticket
agents independent of the value of the
ticket. Travel Management Coalition
commented that when additional
paperwork is involved to verify refund
eligibility, ticket agents should be
allowed to charge a service fee and it
would be disclosed in a client
agreement.
DOT Response: The Department
reaffirms its belief that ticket agents
offer valuable services to the traveling
public apart from booking airfare, such
as providing specialized knowledge of
suitable travel options in accordance
with consumers’ wants and capabilities,
offering access to limited availability
fares or tools to comparison shop across
various airlines to find the best value for
consumers, and researching and
booking activities at consumers’
destinations (e.g., sightseeing tours,
events). The Department is of the view
that, even in situations where the
consumer did not travel because of a
canceled or significantly changed flight,
it is reasonable for ticket agents to retain
service charges related to issuing the
original tickets to the extent the service
charge is not simply for processing
payment for a flight that the consumer
found. The Department views this
service as being independent of the
value of the ticket. Also, regardless of
whether the passenger travels, the fee
represents the cost of service already
provided by ticket agents. Under this
final rule, ticket agents may retain this
type of service charge even if the
passenger did not travel due to an
airline cancellation or significant
change so long as the nature and
amount of these fees are clearly and
prominently disclosed to consumers
when they purchase the tickets, and
they are assessed on a per-passenger
basis.
The Department’s Office of Aviation
Consumer Protection would consider
undisclosed fees to be a deceptive
practice in violation of 49 U.S.C. 41712.
Pursuant to 14 CFR 399.79, a practice is
‘‘deceptive,’’ within the meaning of 49
U.S.C. 41712, to consumers if it is likely
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to mislead a consumer, acting
reasonably under the circumstances,
with respect to a material matter. A
matter is material if it is likely to have
affected the consumer’s conduct or
decision with respect to a product or
service. A ticket agent’s failure to
disclose that the service fee charged at
the time of reservation is nonrefundable
should a ticket refund be due would
likely mislead a consumer to reasonably
conclude that the entire amount paid for
the ticket is refundable when a ticket
refund is due. Similarly, a ticket agent’s
failure to disclose the existence and the
amount of a fee for issuing a refund is
likely to mislead a consumer to
reasonably believe that no such fee
would apply when a ticket refund is
due. Failing to provide either disclosure
would be an omission of material
information that may affect the
consumer’s purchase decision because a
consumer might choose not to purchase
the ticket if the consumer was aware
that if a refund is due the amount of the
refund would be for less than the
purchase price.
The Department does not address in
this final rule whether a ticket agent can
retain a booking fee (i.e., a fee for
processing payment for a flight that the
consumer found) when processing a
refund for an airline ticket because the
passenger’s flight was canceled or
significantly changed and the passenger
no longer wishes to travel. The
Department notes that it is addressing
the issue of whether carriers can charge
a booking fee separately from the ticket
price as part of another rulemaking.55
While that rulemaking is pending, the
Department’s Office of Aviation
Consumer Protection will focus on
whether the nature and amount of the
booking fee was clearly and
prominently disclosed to a consumer at
time of ticket purchase in determining
if an airline or ticket agent engaged in
an unfair or deceptive practice in
violation of 49 U.S.C. 41712.56
Regarding the issue of whether
airlines or ticket agents can retain a fee
for processing refunds, the Department
remains of the view that airlines must
refund the entire ticket price and not be
permitted to retain a fee for processing
55 In that rulemaking, the Department is
examining whether fees for basic airline services
such as booking a ticket should be included in the
advertised fare and prohibited as a separate charge.
See https://www.reginfo.gov/public/do/eAgenda
ViewRule?pubId=202310&RIN=2105-AF15.
56 The Department’s full-fare advertising rule
requires all mandatory fees to be paid by the
customer to the carrier, or agent, for air
transportation to be included in the advertised fare.
See 14 CFR 399.84. To the extent that a booking fee
is not avoidable and is a mandatory fee, it must be
included in the advertised fare.
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refunds when airlines cancel or
significantly change a flight and the
passenger no longer wishes to travel.
The Department received consumer
comments objecting to refund
processing fees by airlines for flights
that the airlines cancel or significantly
change, and limited industry comment
in support of allowing such fees. In the
Department’s view, airlines charging a
service fee for processing refunds
caused by an airline-initiated
cancellation or significant change is an
unfair practice in violation of section
41712. Consumers are substantially
harmed by having to pay a fee to receive
their money back after services they
paid for were not provided. This harm
is not reasonably avoidable by
consumers because consumers have no
control over the cancellation, significant
change, or the issuance of the refund,
with or without a fee. The Department
further views that allowing airlines to
charge a refund processing fee harms
competition and consumers because it
reduces the incentives for airlines to
minimize cancellations and significant
changes, based on which refunds are
due to consumers.
As for ticket agents, the Department is
concerned that permitting a ticket agent
to charge a fee for processing refunds
may be unfair to consumers. While the
Department recognizes that ticket agents
do not initiate the cancellation or
significant changes that result in a
refund being due, neither does a
consumer. The Department plans to
explore this issue further at a later time,
including through its rulemaking 57
pursuant to a requirement by 49 U.S.C.
42301 note prec. to issue a rule
requiring ticket agents with an annual
revenue of at least $100 million to adopt
minimum customer service standards.
32789
In the meantime, the Department’s
Office of Aviation Consumer Protection
will focus on whether the nature and
amount of the refund processing fee was
clearly and prominently disclosed to a
consumer in determining whether,
when a refund is due, a ticket agent
engaged in an unfair or deceptive
practice by charging a refund processing
fee that was not properly disclosed at
the time of ticket purchase. Also, if the
Department determines that ticket
agents’ processing fees appear to
circumvent the intent behind the
requirement for consumers to receive a
meaningful refund, the Department will
consider whether further action is
appropriate.
The Table below summarizes whether
airlines or ticket agents can retain
certain fees when processing refunds.
TABLE 2—FEES CHARGED BY AIRLINES AND TICKET AGENTS WHEN PROCESSING REFUNDS
Types of service fees
Are airlines allowed to retain fee when
processing refunds?
Booking Fee (for processing payment for flight
that the consumer found).
Service Fee Related to Issuing Original Ticket
(for services provided beyond processing
payment for flight that the consumer found).
Processing Fee for Required Refunds ...............
No .....................................................................
II. Refunding Fees for Significantly
Delayed Bags
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1. Covered Entities and Flights
The NPRM: In the NPRM, the
Department proposed to mandate U.S.
and foreign air carriers provide refunds
to consumers for the fees charged to
transport checked bags on scheduled
flights to, from, or within the United
States using aircraft of any size if the
bags are significantly delayed. The
Department explained that the proposed
requirement is based on a mandate in 49
U.S.C. 41704 note for the Department to
promulgate a regulation requiring U.S.
and foreign air carriers refund bag fees
to consumers when carriers fail to
deliver checked bags to them within a
specified time of their arrival on a
domestic or international flight. In the
NPRM, the Department acknowledged
that the proposed requirement would
apply to some small carriers but
explained that it does not expect it to
have a significant economic impact on
a substantial number of small entities
because many small carriers operate
57 Information on the rulemaking titled ‘‘Air
Transportation Consumer Protection Requirements
for Ticket Agents’’ (RIN 2015–AE57) is available in
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N/A (DOT is not aware of airlines that charge
these types of service fees).
No .....................................................................
Are ticket agents allowed to retain fee when
processing refunds?
N/A (DOT is not aware of ticket agents that
charge this type of booking fees).
Yes, subject to required disclosures.
No determination in this final rule—DOT will
continue to examine issue.
flights under codeshare arrangements
with larger carriers, with the larger
carriers responsible for collecting and
refunding baggage fees.
With respect to ticket agents, the
Department did not propose to apply
the baggage refund requirements to
ticket agents. The Department stated in
the NPRM that the Department has
independent authority under 49 U.S.C.
41712, which prohibits ticket agents
from engaging in unfair or deceptive
practices in air transportation, to
include ticket agents in the regulation if
deemed appropriate. The Department
stated, however, that it is required by 49
U.S.C. 42301 note prec. to issue a rule
requiring ticket agents with an annual
revenue of at least $100 million to adopt
minimum customer service standards,
and the Department intends to address
this requirement through that separate
rulemaking. In addition, the Department
noted that a ticket agent’s failure or
refusal to make proper refunds promptly
when service cannot be performed as
contracted or a ticket agent’s
representation that such refunds are
obtainable only at some other point
violates 14 CFR 399.80(l) and
constitutes an unfair or deceptive
practice. This requirement does not,
however, directly address whether
ticket agents that collect baggage fees
from passengers must provide refunds
of the fees when checked bags are
significantly delayed. DOT sought
comments on whether the proposed
refund requirement for delayed checked
bags should apply to ticket agents who
engage in the transaction of baggage
fees.
Comments Received: The Department
received no comments regarding the
proposed scope of carriers that would be
required to refund fees to consumers for
significantly delayed bags on their
domestic or international flights. The
Department did receive comments on
whether, as a policy matter, the
Department should require ticket agents
to refund baggage fees that they
collected when the bags were
significantly delayed. A4A, IATA, RAA,
and Qatar Airways all supported
holding ticket agents responsible for
the Fall 2023 Unified Agenda of Regulatory and
Deregulatory Action at https://www.reginfo.gov/
public/do/eAgendaViewRule?pubId=202310&
RIN=2105-AE57.
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refunds if they collected the baggage
fees. Spirit also commented that ticket
agents should be required to refund
baggage fees, arguing that the
Department has existing regulation
requiring ticket agents to make ‘‘proper’’
ticket refunds when contracted services
are not provided, and it is arbitrary,
inconsistent, and unfair to not require
ticket agents to refund baggage fees.
Travelers United commented that
whether the ticket was purchased from
airlines or ticket agents, airlines should
ultimately be responsible for refunds of
baggage fees and other ancillary fees.
Similarly, ASTA and Travel Tech both
argued that ticket agents should not be
required to refund baggage fees. They
pointed out that the statute directs the
Department to issue a rule specifically
requiring airlines to refund baggage fees.
They argued that where ticket agents
collect the fees, they are authorized by
airlines to do so as agents of airlines.
They noted that depending on the
payment settlement system used, ticket
agents can facilitate the issuance of
baggage fee refunds, but each airline
determines whether it would allow
ticket agents to issue refunds. They
further commented that any fees
collected by ticket agents under airlines’
authorization are promptly remitted to
airlines.
DOT Response: In this final rule, the
Department requires U.S. and foreign
carriers that operate scheduled
passenger service to, within, and from
the U.S. to provide a refund to
passengers of fees charged for
transporting a significantly delayed
checked bag. The Department is
applying this requirement to carriers
regardless of the aircraft size that the
carriers operate. DOT continues to
believe that it is important to not
exclude aircraft designed to have a
maximum passenger capacity of 60 seats
or fewer, which are considered small
aircraft,58 because a significant number
of passengers travel on such aircraft.59
With regard to applying the proposed
baggage refund requirements to ticket
agents, the Department does not adopt
58 An air carrier is a small business if it provides
air transportation only with small aircraft (i.e.,
aircraft with up to 60 seats/18,000-pound payload
capacity). See 14 CFR 399.73.
59 According to data from the Department’s
Bureau of Transportation Statistics (BTS), a total of
760,159,634 domestic passengers were transported
in 2022. While most of these passengers
(734,090,772 passengers or 96.6%) were on flights
using aircraft of more than 60 seats, a significant
number (26,068,862 passengers or 3.4%) were on
flights using aircraft with 60 seats or fewer. See
Bureau of Transportation Statistics ‘‘T–100
Domestic Segment Data (World Area Code)’’,
https://www.bts.gov/browse-statistical-productsand-data/bts-publications/data-bank-28ds-t-100domestic-segment-data.
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in this final rule a specific requirement
for ticket agents to provide refunds of
baggage fees for significantly delayed
bags even if ticket agents collect the bag
fees. The NPRM sought information on
ticket agents’ involvement in collecting
baggage fees from passengers, either as
a carrier’s agent or as a principal. It is
the Department’s understanding, based
on comments from both ASTA and
Travel Tech, that ticket agents’
involvement in collecting baggage fees
is minimal and the collections are
generally authorized by airlines as their
agents. Also, the Department believes
that tracing mishandled baggage and
ensuring delivery as soon as possible is
best handled by carriers through direct
communication with passengers. The
Department is concerned that placing
the obligation to refund baggage fees for
delayed bags on ticket agents may cause
unnecessary delays by removing some
of the incentives for airlines to recover
the bags as quickly as possible. It would
also necessarily require that ticket
agents determine whether refunds for
significantly delayed bags are due,
which the ticket agents cannot
determine on their own. Further, 49
U.S.C. 41704 note directs the
Department to promulgate a regulation
requiring airlines to provide refunds for
baggage fees. For all these reasons, the
Department is not requiring ticket
agents to provide refunds of baggage
fees for significantly delayed bags in
this final rule. The Department will
continue to monitor the transactions of
baggage fees and other ancillary service
fees conducted by ticket agents and
intends to revisit the issue in its
rulemaking requiring ticket agents with
an annual revenue of at least $100
million to adopt minimum customer
service standards, as required by 49
U.S.C. 42301 note prec.60
2. Length of Delay Triggering Baggage
Fee Refund Requirement
The NPRM: The Department proposed
to require an airline refund the fee paid
by a passenger for a checked bag if the
airline fails to deliver the bag to the
passenger within 12 hours of arrival for
domestic flights and within 25 hours of
arrival for international flights. 49
U.S.C. 41704 note prescribes the
minimum lengths of baggage delivery
delay that would trigger the refund
requirement as not later than 12 hours
after arrival for domestic flights and not
later than 15 hours after arrival for
international flights. It also provides the
Department the flexibility to modify
these timeframes to up to 18 hours for
domestic flights and up to 30 hours for
60 See
PO 00000
fn. 55, supra.
Frm 00032
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international flights if the Department
determines that the 12-hour or 15-hour
standards are infeasible and would
‘‘adversely affect consumers in certain
cases.’’ The Department explained that
it proposed 12 hours for domestic flights
because airlines have tracking systems
in place to identify the location of bags
and airlines should be able to place
delayed bags on the next available
flight, often resulting in bags being
delivered within 12 hours for domestic
flights. With respect to international
flights, the Department proposed to
allow carriers up to 25 hours (an
extension of the statutory default
standard of 15 hours) to deliver checked
bags without having to issue a refund,
reasoning that many international longhaul flights are scheduled once a day
which makes recovery and delivery of a
delayed checked bag within the
minimum length delay of 15 hours
prescribed in the statute extremely
challenging for carriers. The Department
stated that consumers may be negatively
impacted if the Department were to
impose a 15-hour deadline because
carriers may have less incentive to
deliver the delayed bag on the next
flight when flights are scheduled once a
day. The NPRM solicited comment on
whether it has adequately considered
the impact on consumers and airlines of
the proposed 25-hour deadline for
international flights and whether the
proposed 12-hour deadline for domestic
flights is reasonable, particularly for
ULCCs that may operate scheduled
flights in a lower frequency and lack
interline agreements with other carriers.
Additionally, the NPRM discussed a
tiered standard where the maximum
number of delay hours that would
trigger a refund would vary based on
domestic versus international flights,
the length or frequency of the flights, or
other variables. The Department
tentatively determined to not propose a
tiered standard based on flights’
frequency or length because carriers
would have to implement a costly
system of sorting and prioritizing
delivery of delayed bags based on the
length or frequency of each individual
flight. It proposed instead a tiered
standard based on domestic and
international flights because it would be
easier for carriers to implement and for
consumers to understand. For
international itineraries that include
domestic segments, the NPRM proposed
that the international standard for bag
delay would apply.
Comments Received: Most airline
commenters generally supported
adopting the maximum length of
timeframes permitted by the statute, i.e.,
18-hour delay for domestic itineraries
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and 30-hour delay for international
itineraries, while AAPA opposed a
blanket timeframe by regulation and
Kuwait Airways suggested a 72-hour
timeframe. A4A stated that carriers
cannot meet the proposed 12 hours for
domestic and 25 hours for international
standards under certain circumstances,
including itineraries involving routes
for which airlines do not operate daily
flights, passengers traveling on the last
flight of the day out of a remotely
located airport, and passengers
continuing travel on cruise or ground
transportation preventing timely
delivery of bags. A4A, IATA, and
multiple international carriers also
commented that special considerations
should be given to international
operation complexities such as airport
congestion preventing offloading bags,
weather impact on ground operations,
the impact of a positive bag match
requirement, and customs and security
inspections. RAA urged the Department
to consider that many carriers serving
remote markets under the Essential Air
Service program or serving international
markets may only operate one flight a
day and not every day. NACA,
Allegiant, and Spirit commented that
from the ULCC perspective, operating
low frequency and the lack of interline
partners makes it difficult to meet the
proposed timeframes. Some of these
commenters believed that adopting the
18/30-hour maximum standards would
at least incentivize ULCCs to seek other
means (e.g., overnight couriers) when
transporting the bag on the next
available flight would not meet the
deadlines. Air New Zealand, Emirates,
Kuwait Airways, and Qatar Airways
indicated that the Department should
give special consideration to ultra-longhaul international operations, arguing
that the length of flight operations and
the low frequency would prohibit their
ability to meet the 25-hour deadline.
Airline commenters supported the
proposal to apply the international
delay standard to domestic segments of
international itineraries.
Among consumer rights advocacy
groups, Travelers United, Business
Travel Coalition et al.,61 and
FlyersRights commented that checked
bags should be deemed late when they
are not on the same flight as passengers.
Business Travel Coalition et al. argued
that the Department has its own
authority under 49 U.S.C. 41712 to
61 The joint comments by Business Travel
Coalition et al. were signed by Business Travel
Coalition, Consumer Action, the Consumer
Federation of America, Consumer Reports, Ed
Perkins of EdOnTravel.com, FlyersRights.org,
National Consumers League, Travel Fairness Now,
and U.S. PIRG.
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impose such a requirement without
contradicting 49 U.S.C. 41704, note.
Travelers United argued that refunds of
bag fees should be issued automatically
if the bags do not arrive within 60
minutes of the passengers’ arrival.
Business Travel Coalition et al. argued
that the Department should require
airlines to enter into interline
agreements for baggage delivery.
FlyersRights commented that by
proposing a 25-hour standard for
international flights, the Department has
considered that international long-haul
operations that operate one daily flight
can still meet the deadline by placing
the bag on the next flight. In that regard,
FlyersRights questioned why the
Department does not simply require that
the bag be transported on the next flight.
FlyersRights also stated that the 25-hour
deadline would harm consumers on
international flights that are operated
more than once a day because bags that
could have been transported within a
shorter time now can be delayed for up
to 25 hours.
ASTA, representing ticket agents,
commented that the Department should
adopt the 12/15-hour minimum
standards set by the statute. It argued
that while the proposed 25-hour
standard acknowledges long-haul flights
operated once a day, it does not
recognize many international flights that
are short in duration and operated
multiple times a day. ASTA further
stated that it disagrees with the
Department’s belief that imposing the
15-hour deadline for international
flights would result in carriers having
less incentive to recover the bags
because the deadline has already
passed. It argued that keeping the bag
fees is not the airlines’ sole or primary
purpose when considering recovering
delayed bags.
The Colorado Attorney General
(Colorado AG) also provided comments
in support of the Department’s tentative
decision to not adopt a tiered standard
for the length of a delay triggering a
refund based on flights’ frequency,
length, or other variables. The Colorado
AG stated that a simplified system is
certainly more accessible to all parties
and is an example of the type of
regulatory clarity that, in effect, protects
consumers by enabling them to
understand their own rights and
advocate for themselves when
regulations are defied or disregarded.
DOT Responses: After fully
considering the comments, the
Department is requiring carriers to
refund the bag fee if a checked bag is
delayed the minimum statutory
standard of 12-hours for domestic flights
as proposed, the minimum statutory
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32791
standard of 15-hours for an international
flight that is 12 hours or less, and the
maximum statutory standard of 30hours for an international flight that is
more than 12 hours. The Department
appreciates consumer rights advocacy
groups’ comments that urge the
Department to adopt a ‘‘zero hour’’
standard for delayed bags. While we
agree that the Department has broad
authority under 49 U.S.C. 41712 to
define unfair or deceptive practices, 49
U.S.C. 41704 note imposes a specific
requirement on the Department with
regard to airlines’ refund of delayed
baggage fees. Specifically, the
Department is directed to require U.S.
and foreign carriers to provide a refund
for any fees paid by a passenger for
checked baggage if the carriers fail to
deliver the bag to passengers within 12
to 18 hours of their arrival from
domestic flights and within 15 to 30
hours of their arrival from international
flights. Although adopting a ‘‘zero hour’’
standard as suggested by a consumer
organization would result in consumers
receiving a refund of baggage fees in all
instances where the bags did not arrive
with the consumers, the Department is
of the view that imposing a strict
liability on airlines would not result in
the maximum consumer benefit because
this approach reduces the incentive for
carriers to recover and return the
delayed bags to consumers as soon as
possible. As such, we are not setting a
‘‘zero hour’’ standard for delayed bags
that would necessitate a refund of the
bag fee.
The Department has carefully
considered the comments received and
is adopting the proposed 12-hour
standard for domestic itineraries.
Airline commenters did not provide
convincing evidence demonstrating that
the 12-hour standard for domestic
itineraries is not feasible and would
‘‘adversely affect consumers in certain
cases,’’ as set forth by the statute.
Further, although the Department
acknowledges the differences between
the legacy carriers and ULCCs in terms
of flight frequencies and the scope of
networks, we continue to believe that
these differences do not warrant
adopting a standard for ULCCs different
from that of the other carriers.
Specifically, the Department notes that
all carriers have the option to transport
the delayed bags through overnight
couriers and still meet the delay
deadline, instead of waiting for the next
available flight. Also, although
compared to the legacy carriers, it is
likely that ULCCs may have to use
courier services more frequently to
recover the delayed bags, this
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disadvantage for the ULCCs is countered
by the reduced likelihood of ULCCs
having delayed bags compared to legacy
carriers because of their point-to-point
operations. Legacy carriers’ hub-andspoke networks means that many of the
bags they transport will be traveling
through connecting itineraries that
statistically have a higher possibility of
being delayed, in comparison to the
ULCCs’ point-to-point operations.
According to a Socie´te´ Internationale de
Te´le´communications Ae´ronautiques
(SITA) Baggage IT Insights report,62
transfer mishandling historically
remains by far the leading cause of bag
delays, which accounted for 42% of
total bag delays in 2022.63
With respect to international
itineraries, the Department has decided
that a ‘‘one-size-fit-all’’ standard may
not be in the best interest of consumers.
We agree with comments suggesting that
the proposed 25-hour standard to return
a bag before the carrier has to refund the
bag fee may be too long when
consumers are traveling on international
routes with shorter durations and/or
more frequencies. At the same time, we
agree with comments asserting that, in
many cases, it may not be feasible for
carriers to return bags within the
proposed 25-hour standard for
consumers traveling on ultra long-haul
flights operated under low frequencies.
This is not only because the carrier’s
next available flight could be 24 hours
or more later, but also because there
could be very limited choices to
transport the bags on rerouted
itineraries, on another carrier’s flight, or
through courier services. The flight
segment duration data on major U.S.
carriers collected by the Bureau of
Transportation Statistics (BTS) shows
that in 2022, the majority of non-stop
flight segments operated by U.S. carriers
to and from the U.S. have a flight
duration of 12 hours or less, including
all flights between the United States and
Canada, Central/South America, and
Europe, 65% of flights between the
United States and Africa, 46% of the
flights between the United States and
Far East, 73% of flights between the
United States and Middle East, and 14%
of the flights between United States and
Australia/Oceania.64 The Department
assumes the duration of flights operated
62 https://www.sita.aero/resources/surveysreports/baggage-it-insights-2023/.
63 As noted in the NPRM, the SITA Baggage IT
Insights report for 2019 states that transfer
mishandling account for 46% of total bag delays in
2018. https://www.sita.aero/resources/surveysreports/baggage-it-insights-2019/.
64 Data is derived from the T–100 Segment report
as filed monthly by major U.S. carriers with BTS.
Flight duration is calculated by dividing minutes
airborne with performed departures.
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by foreign carriers is similar, but BTS
does not collect this data from foreign
air carriers. For these reasons, the
Department is adopting two standards
for international itineraries. For
international itineraries with a non-stop
flight segment to or from the United
States that is 12 hours or less, we are
adopting the minimum statutory
standard of 15 hours. For international
itineraries with a non-stop flight
segment to or from the United States
that is more than 12 hours, we are
allowing carriers to recover the delayed
bags within 30 hours to avoid refunding
the bag fees.
The Department notes that to qualify
for the 30-hour standard, the itinerary
must include an international segment
(i.e. a flight segment between the United
States and a foreign point) that is more
than 12 hours in duration. If the
itinerary includes a segment between
two foreign points that is more than 12
hours and the segment between the
United States and a foreign point is 12hour or less in duration, the 15-hour
delay standard would apply.
The Department disagrees with some
commenters’ suggestion that the rule
should explicitly require that the
delayed bags be transported on the next
available flight. We intend to provide
carriers the maximum flexibility to
recover the delayed bags to the benefit
of passengers, including transporting
the bags on partner airlines’ flights, on
cargo flights, or through commercial
couriers. In addition, the Department
agrees with ASTA’s comment that it is
inappropriate to assume that retaining
the baggage fees is carriers’ sole or
primary goal and that once the deadline
has passed for delivering delayed bags,
carriers will not have the incentive to
recover the bag as quickly as possible.
As ASTA pointed out in its comment,
delivering a delayed bag as soon as
possible is a way to gain custom
satisfaction and goodwill, regardless of
whether carriers must refund the bag
fee. Further, carriers are under the
obligation to compensate consumers for
incidental expenses related to delayed
bags, subject to maximum liability
limits under 14 CFR 257 for domestic
travel and under international treaties
for international travel. The longer the
bag is delayed, the more potential
liability for incidental expenses carriers
will face. The Department believes that
all these factors provide incentives to
carriers to recover the bags regardless of
whether the refund deadline has passed.
Regarding international itineraries
that include a domestic segment, we are
adopting the proposal to apply the
international deadline to such
itineraries. The Department holds the
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view expressed in the NPRM that
mishandled bag incidents occur more
frequently on the international
segments. This is also confirmed by the
aforementioned SITA Baggage IT Insight
report, which states that globally,
mishandling rates on international
routes is 19.3 per thousand passengers,
compared to 2.4 for domestic routes.65
The Department also received no
objection to this proposal and believes
that applying the international
deadlines to such itineraries avoids
consumer confusion and appropriately
takes into account that many delayed
bags traveling on an international
itinerary were likely delayed on the
international portion of the trip.
Also, the Department notes that it is
making an editorial change to the rule
text in 14 CFR 259.5(b)(3). The existing
rule requires carriers to make every
reasonable effort to return mishandled
baggage within twenty-four hours. The
Department is removing the reference to
‘‘twenty-four hours’’ and, instead,
requiring carriers to make every
reasonable effort to return mishandled
baggage within the timeframes set forth
in this final rule for purpose of avoiding
refunding baggage fees.
3. Measuring the Length of Delay in
Delivering a Checked Bag
The NPRM: To calculate the length of
the delay for a carrier to deliver a
checked bag, it is necessary to specify
the start and end of the delay. The
provision at 49 U.S.C. 41704 note states
that the baggage delay clock starts at
‘‘the arrival’’ of a flight and ends when
the carrier ‘‘[delivers] the checked
baggage to the passenger.’’ However,
that provision does not specify what it
meant by the arrival of a flight or
delivery of the checked baggage.
The Department proposed the start of
the delay to be when the passenger
arrives at his or her destination and is
given the opportunity to deplane from
the last flight segment. The Department
reasoned that airlines already track this
information for the purpose of ensuring
compliance with the Department’s
tarmac delay rule in 14 CFR part 259.
Another measure considered in the
NPRM for the start of the delay is the
published scheduled arrival time of a
flight or the ‘‘block-in time,’’ i.e., the
time when a flight has parked at the
arrival gate or another disembarkation
location and blocks were placed in front
of its wheels.
As to when a bag is considered to be
delivered to the passenger for the
65 The Report also noted that in 2022, there was
a considerable surge in the international
mishandling rate, which was at 8.7 during the
previous year.
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purpose of ending the delay in receiving
a checked bag, the Department proposed
that, at the carrier’s discretion, the end
of the delay is: (1) when the bag is
transported to a location agreed to by
the passenger and the carrier, regardless
of whether the passenger is present to
take possession of the bag; (2) when the
bag has arrived at the destination
airport, is available for pickup, and the
carrier has provided notice to the
passenger of the location and
availability of the bag for pick-up; or (3)
if the carrier offers delivery service and
the passenger accepts such service,
when the bag has arrived at the
destination airport, and the carrier has
provided notice to the passenger that
the bag has arrived and will be
delivered to the passenger. The
Department shared in the NPRM that
the three options to determine the end
of the delay are intended to allow
airlines, with less financial risk, to work
with the passengers to transport the bags
to the most convenient location in the
most efficient manner to the passenger.
The NPRM sought comment on whether
this analysis accurately captures
carriers’ incentives to work with
passengers and provide baggage delivery
or if there are other factors that could
cause carriers to engage in different
behaviors in response to the proposed
options. In addition, the NPRM sought
comment on whether allowing carriers
to choose among these three options is
reasonable and effective to achieve the
goal of providing carriers and
passengers the maximum level of
flexibility, promoting efficiency in
delayed baggage recovery, and ensuring
passengers are treated fairly when their
bags are delayed in air transportation.
The Department also solicited specific
comment on the second option, which
stops the delay clock when the bag has
arrived at the destination airport, is
available for pickup, and the carrier has
provided notice to the passenger of the
location and availability of the bag for
pick-up. The NPRM noted that carriers
have the burden of proving that notices
have been provided to passengers prior
to the applicable deadline, invited
comment on sufficient forms of
notifications, and asked what evidence
should a carrier be required to provide
if notification is through a voice call or
message and there is a dispute between
a carrier and a passenger about whether
such a notification was provided.
Comments Received: Regarding the
start of baggage delivery delay, all
airline commenters who commented on
this issue suggested that the delay clock
should start at the time a passenger files
a Mishandled Baggage Report (MBR).
They argue that airlines do not always
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know that a bag is delayed until a
passenger notifies the carrier by filing
an MBR. They further commented that
this notification would allow carriers to
collect necessary information for
searching and delivering the bag, such
as the passenger’s contact information,
the bag’s tag number, and the bag’s
description. Qatar Airway asked if the
Department would consider passengers
using carriers’ online reporting system
to have started the clock.
An individual consumer objected to
the airlines’ approach and argued that
airlines determine how and when an
MBR may be filed and there is obvious
conflict of interest on airlines’ part. This
commenter suggested that a passenger
arriving at 10 p.m. may not file an MBR
until 9 a.m. the next day. This
commenter further indicated that
airlines’ rejections of MBRs would
increase DOT complaint volume.
Regarding the end of the delay, airline
commenters supported the Department’s
proposal to allow airlines to choose one
of the three options, arguing that this
approach would allow carriers the
flexibility to recover bags and work with
passengers for tailored solutions. A4A
commented that for option 2 (bag has
arrived at the destination airport, is
available for pickup, and the carrier has
provided notice to the passenger of the
location and availability of the bag for
pick-up), it is unreasonable to require
carriers’ baggage office to open 24/7 so
the clock should stop at the time of
notification even if the carrier’s baggage
office is closed. A4A, IATA, Spirit, and
Virgin Atlantic further indicated that
the Department should adopt a
performance-based standard for
notifications, taking into account any
future innovations, and the notification
requirement should focus on timeliness
and not the form. A4A and IATA also
stated that the Department should not
prescribe how carriers keep records of
the notifications as carriers use different
systems to record communications with
passengers. A4A further commented
that recording the time of a voice call
should be sufficient as evidence that a
notification by phone call has been
provided.
Travelers United and Business Travel
Coalition et al. opposed the proposal.
Business Travel Coalition et al. argue
that allowing the three options would
result in airlines selecting the option
that is most likely to relieve them from
the obligation of refund baggage fee (i.e.,
option 2) and doing no more than the
minimum necessary to avoid having to
refund. One individual consumer
expressed support for the proposal of
three options and commented that the
flexibility allows carriers to provide the
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32793
service in reasonable time and cost
effectively. Another consumer
commented that the regulation should
not indicate that carriers may use app
push notices to provide notification
because many passengers do not want to
or have mobile apps for various reasons,
including the lack of memory to
download the app, the lack of cellular
data, unwillingness to share location, or
concerns about viruses. The commenter
suggested that consumers should have
the right to receive notifications through
privacy-friendly means such as email or
text message.
ASTA commented that the clock
should stop when the bag is physically
in the passenger’s possession because
passengers continuously experience
inconveniences until reunited with the
bags. ASTA further stated, however, that
it recognizes that it is inequitable to
keep the clock running when a
passenger delays the reclaim of a bag,
and as such, it suggests that the clock
should stop when the bag is delivered
to a location designated by the
passenger and the passenger is notified.
DOT Responses: After carefully
considering the comments provided, the
Department is requiring that the length
of the delay for a carrier to deliver a
checked bag be calculated based on
when the passenger arrives at his or her
destination and is given the opportunity
to deplane from the last flight segment
(start of the delay) and when the carrier
delivers the bag to a mutually agreed
upon location such as a hotel or the
passenger’s home or when the passenger
(or someone authorized to act on behalf
of the passenger) picks up the bag at the
airport (end of the delay). In
determining the start of the delay, the
Department focused on the fact that the
delay started when the bag did not
arrive with the passenger. In
determining the end of the delay, the
Department focused on when the carrier
relinquishes its custody of the bag to the
passenger, which is consistent with the
Department’s position on U.S. airlines
reporting of mishandled baggage.66
Based on carriers’ comments that in
many circumstances carriers may not
know when a bag is delayed until the
passenger files an MBR, and consistent
with the requirement of section 41704
note that passengers must notify carriers
of the baggage delay, the Department is
specifying that filing an MBR is
66 The Technical Directive issued by the
Department’s Bureau of Transportation Statistics
requires that reporting carriers must report the
number of mishandled bags, as reported by or on
behalf of passengers, that were mishandled while in
its custody. https://www.bts.gov/topics/airlinesand-airports/number-30a-technical-directivemishandled-baggage-amended-effective-jan.
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necessary to obtain a refund of the fee
for a significantly delayed checked bag.
Typically, airlines obtain, through the
filing of an MBR, information such as
the passenger’s contact information, the
bag’s tag number, and the bag’s
description which helps them search for
and deliver a bag. The provision in this
final rule that a refund of the bag fee for
a significantly delayed checked bag is
not due until the passenger files an MBR
with the last operating carrier is
consistent with the statute in 49 U.S.C.
41704 note that provides a refund shall
be provided if a carrier fails to meet the
baggage delivery deadline ‘‘and . . . the
passenger has notified the [carrier] of
the lost or delayed checked baggage.’’
The Department considers that a
consumer filing an MBR to be
notification to the carrier of the lost or
delayed checked bag.
Regarding the end of the delay for a
carrier to deliver a checked bag, the
Department had proposed in the NPRM
to allow carriers to consider as end of
the delay, among other things, instances
where the carrier offers delivery service
of the bag and the passenger accepts
such service and the carrier has
provided notice to the passenger that
the bag has arrived and will be
delivered to the passenger. The
Department has determined that this is
not an appropriate end of the delay
because the bag remains under the
carrier’s custody and the passenger is
not reunited with the bag when the
carrier provides notice to the passenger
that the bag has arrived and ‘‘will be’’
delivered. 49 U.S.C. 41704 note states
that the baggage delay clock ends when
the carrier ‘‘[delivers] the checked
baggage to the passenger.’’ Notifying
passengers that the bag will be delivered
is not a form of ‘‘delivery.’’ 67
Similarly, the Department has
determined that its proposal that the
end of the delay includes instances
when the bag arrives at the destination
airport, is available for pickup, and the
carrier has provided notice to the
passenger is inconsistent with 49 U.S.C.
41704 note. Again, notifying the
passenger that the bag is available for
pickup is not a form of delivery.
Further, the Department agrees with
consumer representatives that this
option provides the easiest option for
airlines to stop the clock and may
incentivize carriers to do the bare
minimum to assist passengers in
reuniting with their bags. The
Department is also of the view that
requiring passengers to return to the
67 The Merriam-Webster Dictionary defines
‘‘deliver’’ to mean ‘‘to take and hand over to or
leave for another.’’
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airport to pick up their delayed bags,
after they have already experienced the
inconvenience of leaving the airport
without their checked bags upon arrival,
adds a potentially significant burden to
passengers in terms of their time, effort,
and cost. As such, the Department is
revising this option in the final rule so
the delay clock stops at the time the
passenger or someone authorized to act
on behalf of the passenger are timely
notified of the arrival of the bag and
actually picks up the bag at the airport
instead of when the carrier has provided
notice to the passenger of the location
and availability of the bag for pick-up.
The Department is adopting its
proposal that the end of the delay
include instances when the bag is
transported to a location (e.g.,
passenger’s home, hotel) agreed to by
the passenger and the carrier, regardless
of whether the passenger is present to
take possession of the bag. The
Department agrees with comments that
the clock should stop when the carrier
delivers the bag to a location designated
by the passenger and the passenger is
notified. At this point, the bag is
effectively no longer under the custody
of the airline because the passenger
agreed to delivery of the bag to the
specified location. In this final rule,
airlines have the option to choose as the
end of the delay either (1) when the
carrier delivers the bag to a mutually
agreed upon location; or (2) when the
passenger picks up the bag at the
airport. The Department believes that
these two options provide flexibility for
airlines to work with passengers in
finding the best solution to reunite them
with their bags. If airlines determine
that passengers could or are
purposefully delaying arriving picking
up their bags to receive a refund,
carriers are free to choose option (1).
4. Entities Responsive for Refunds in
Multiple Carrier Itineraries
The NPRM: The Department proposed
that, in a multiple carrier itinerary
where a carrier collected the bag fee, the
carrier that collected the baggage fee be
the entity responsible for refunding the
fee to a passenger should the checked
bag be significantly delayed. The
Department tentatively rejected an ‘‘at
fault’’ approach that assigns the refund
obligation to the carrier that causes the
baggage delay, reasoning that expecting
consumers to track down which airline
caused the bag to be delayed would be
an unreasonable burden on consumers.
The Department also noted that it would
be costly for carriers to determine which
carrier is at fault for causing each bag
delay.
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With respect to multiple-carrier
itineraries for which a ticket agent
collected the bag fee, the NPRM
proposed to hold the carrier that
operated the last flight segment, rather
than the ticket agent, responsible for
issuing the refund when a checked bag
is significantly delayed. There was
discussion in the NPRM of ticket agents
being authorized by carriers to collect
bag fees on the carriers’ behalf. Also,
while the Department acknowledged
that the carrier that operates the last
flight segment may be a fee-for-service
carrier that normally does not handle
baggage fee refunds since these carriers
generally do not sell tickets or ancillary
services, the Department added that
carriers can prorate the cost of refunds
among themselves. The Department
solicited comment on whether, rather
than requiring the carrier that operated
the last flight segment to provide the
refund, the Department should require
the carrier that marketed the last flight
segment to issue the refund when a
ticket agent collects the bag fee.
Comments Received: Most airline
commenters supported requiring the
carrier that collected the baggage fees to
provide refunds for delayed bags in
multiple carrier itineraries. Emirates
agreed that the collecting carrier should
refund but notes that the collecting
carrier may not be the marketing/
ticketing carrier. Virgin Atlantic
commented that the marketing carrier
has the payment information but may
not have the information on the status
of the bag, and the last operating carrier
has the status of the bag but may not
have the payment information. It
suggested that carriers need to
investigate together, and that additional
time is needed. RAA commented that
fee-for-service carriers that operate the
last segments do not conduct
transactions with passengers and are
unable to process refunds. NACA stated
that ULCCs that operate non-scheduled
services often operate on behalf of other
ULCCs for scheduled services. It
contended that these non-scheduled
operating carriers do not collect baggage
fees or take control of bags when
passengers check in, and they should
not be responsible for refunds. A4A
suggested that the ticket agents
collecting baggage fees for multiple
carrier itineraries should refund and the
passenger should be required to notify
the last operating carrier about the bag
delay. ASTA supported not requiring
the carrier at fault of mishandling
baggage to refund when multiple
carriers are involved. It argued that this
approach would result in passengers
being sent back and forth among
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carriers. ASTA also supported requiring
the carrier collecting the fee be
responsible for refunds.
DOT Responses: The Department is
requiring that, in a multiple carrier
itinerary, the carrier that collected the
baggage fee is the entity responsible for
refunding the fee to a passenger should
the checked bag be significantly
delayed. Based on the comments
received, it appears that the carrier that
markets the itinerary may not always be
the carrier that collects the baggage fee.
Regardless of which carrier is marketing
the flight or which carrier is at fault for
the mishandling, the Department
concludes that the most simplified and
straightforward approach, from the
passengers’ perspective, is to hold the
carrier that collected the baggage fee
responsible for the refund because the
collecting carrier already has the
passenger’s payment information for the
baggage fee. The Department considers
the carrier whose name is shown in the
consumer’s financial statements for the
baggage fee transaction such as the debit
or credit card charge statements
(commonly known as the merchant of
record) to be the carrier that collected
the bag fee. As pointed out by
commenters, the Department recognizes
that the carrier that collected payment
may not have information on the status
of the bag. The Department agrees with
Virgin Atlantic’s suggestion that those
carriers need to work together. In
situations where the carrier that
collected the bag fee and the carrier
operating the last flight segment are
different entities, the Department is
requiring that the last operating carrier,
which is the carrier that accepts MBRs,
to determine whether a bag was
significantly delayed and if so, provide
the baggage delay information to the
collecting carrier without delay. The
Department’s Office of Aviation
Consumer Protection will determine the
timeliness of the information provided
by the last operating carrier to the
collecting carrier based on the totality of
the circumstances, including the
operating carrier’s process and
procedures for determining whether the
checked bag is significantly delayed and
whether the last operating carrier
informed the collecting carrier of the
refund eligibility soon after it
determined the bag was significantly
delayed. The collecting carrier remains
responsible for providing the refund.
Under this final rule, the 7/20-day
refund timelines start at the time the
collecting carrier receives information
from the last operating carrier that the
passenger’s bag has been significantly
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delayed and the passenger has filed an
MBR.
This final rule makes it an unfair
practice for the last operating carrier to
fail to timely determine if a bag has been
significantly delayed and communicate
that information to the collecting
carrier. Airlines not providing such
information in a timely manner pause
the refund process and cause substantial
harm to consumers by extending the
timeline for consumers to receive the
money to which they are entitled. This
harm is not reasonably avoidable by
consumers as they have no control over
the airlines’ actions. The Department
also sees no benefits to consumers and
competition from this conduct. Without
this requirement, the money that is due
to consumers could take however long
an airline chooses, which in turn harms
consumers and competition by
penalizing good customer service and
rewarding dilatory behavior. Regarding
multiple-carrier itineraries for which a
ticket agent collected the bag fee (i.e.,
the ticket agent’s name is in the
consumer’s financial statement), the
Department is adopting the NPRM
proposal to require the operating carrier
for the last flight segment to refund the
baggage fee to the passenger when a
checked bag is significantly delayed. In
these situations, neither the marketing
nor the operating carrier may have the
payment information because the ticket
agent collected the fees, but the
operating carrier for the last flight
segment will have information about the
status of the bag. By taking this
approach in the final rule, the
Department is recognizing that when no
carrier has collected the baggage fee,
requiring the last operating carrier to
refund makes sense because the
operating carrier is the one that accepts
and handles the MBRs and has
information about the status of the bag.
In these situations, the operating carrier
may decide to request that the consumer
completing the MBR form identify the
ticket agent that collected the bag fee
and the consumer’s payment
information in case a refund of the
baggage fee should be necessary. Also,
based on comments from both ASTA
and Travel Tech, it is the Department’s
understanding that these types of
situations will be infrequent because
ticket agents’ involvement in collecting
baggage fees is minimal.
With regard to RAA’s comment that
fee-for-service carriers do not transact
with consumers and are unable to issue
refunds, the Department’s
understanding of the industry practice
is that the marketing carriers that
contract and codeshare with fee-forservice carriers are usually the entities
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that handle most aspects of customer
services for these flights, including
accepting MBRs and compensating
passengers for expenses that they may
incur while their bags are delayed.
Under this final rule, although a fee-forservice carrier operating the last flight
segment is ultimately responsible for
issuing refunds of baggage fees for ticket
agent-transacted multi-carrier
itineraries, it is permissible for the
carrier to rely on other entities, such as
their marketing codeshare partner, to
process MBRs and issue refunds to
consumers on its behalf.
5. Refund Mechanism and Passengers’
Responsibility To Notify Carriers About
Bag Delay
The NPRM: The Department proposed
to require that airlines provide refunds
for delayed bags within seven business
days of a refund being due for credit
cards and within 20 days of a refund
being due for payments using cash,
check, vouchers, frequent flyer miles, or
other form of payment. Under the
NPRM, for the refund process to start,
passengers would need to notify the
airline that collected the bag fee about
the delay in receiving the bag. The
Department proposed that, in situations
in which the carrier accepting and
handling an MBR from the passenger is
the same carrier that collected the
baggage fee, the filing of an MBR would
constitute notification from the
passenger to the carrier that the baggage
was delayed for the purpose of receiving
a checked baggage fee refund.
As proposed, if the carrier that
received an MBR about a delayed bag
and the carrier that charged the baggage
fee are different entities, the Department
proposed to require the passenger
inform the carrier that collected the
baggage fee of the lost or delayed bag.
This would mean that the passenger
would need to file an MBR with one
carrier and then contact another carrier
to state that his/her bag was lost or
delayed. In situations in which a ticket
agent collected the bag fee, the
Department proposed that passengers
would need to notify the carrier that
operated the last flight segment about
the delay in receiving the bag. The
NPRM solicited comments on whether,
instead of requiring passengers to notify
the carrier that operated the last flight
segment about the bag delays, the
Department should require passengers
to notify the carrier that marketed the
last flight segment.
The NPRM proposed that baggage fee
refunds would be issued in the same
form of payment as the original baggage
fee payment. Under this proposal, in
addition to credit card, cash, and check
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payments being refunded in their
respective original forms of payment,
baggage fees paid by airline credit/
voucher or frequent flyer miles would
be refunded in their original forms of
payment as well.
Comments Received: Airlines were
generally in support of requiring
passengers to notify the last operating
carrier and, if the last operating carrier
is not the entity that collected the bag
fee, also notify the entity (carrier or
ticket agent) that collected the bag fee.
They reasoned that notifying the last
operating carrier is necessary to
establish MBRs and provide the
passenger’s contact information, and
that notifying the collecting entity is
needed to more effectively determine
liability among various entities.
Contrary to this general position, COPA
commented that notifying the last
operating carrier alone is sufficient and
the last operating carrier should be
responsible for the refunds. Several
airline commenters suggested that the
Department should allow additional
time (e.g., 30 days) to issue refunds,
especially when multiple parties are
involved. A4A stated that the
Department should allow carriers the
maximum flexibility to provide refunds,
with passengers’ consent, in alternative
electronic forms.
Although consumers and their
advocacy groups did not specifically
comment on this subject, ASTA
disagreed with the Department’s
proposal that passengers should
separately notify the collecting carrier if
the last operating carrier is not the
collecting carrier. ASTA commented
that filing an MBR with the last
operating carrier should be sufficient
and requiring passengers to provide two
notifications is unduly burdensome and
may confuse passengers.
ASTA agreed with the proposed
timelines to require the collecting
carrier to issue refunds.
DOT Responses: After carefully
considering the comments received, the
Department has decided that in all
situations, including when the carrier
that received an MBR about a delayed
bag and the carrier or ticket agent that
collected the baggage fee are different
entities, the filing of an MBR constitutes
adequate notification from the passenger
that the baggage was delayed for the
purpose of receiving a checked baggage
fee refund. The Department agrees with
ASTA that requiring passengers to
provide separate notifications to two
entities to obtain a baggage fee refund is
unduly burdensome and may confuse
passengers. Further, 49 U.S.C. 41704
note requires carriers to provide
‘‘prompt’’ and ‘‘automated’’ baggage fee
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refund when the baggage delivery delay
has exceeded the specified delivery
deadline. In this final rule, the
Department is defining an ‘‘automated’’
refund of the bag fee to mean a refund
provided to a consumer for a checked
bag that has been significantly delayed
(i.e., delayed 12 hours or more for
domestic flights, delayed 15 hours or
more for international flight that is 12
hours or less in duration, delayed 30
hours or more for an international flight
that is more than 12 hours in duration)
without action by the passenger beyond
the filing of an MBR.
In situations where the carrier
accepting and handling an MBR from
the passenger is the same carrier that
collected the baggage fee, it should be
simple for the carrier to provide
passengers automated refunds if the
checked bag is significantly delayed
because that carrier has the passenger’s
payment information and knows
whether the checked bag has been
significantly delayed. In situations
where a carrier collected the baggage fee
and a different carrier accepted the
MBR, both carriers are expected to work
together to ensure that a refund is issued
promptly when due, with the carrier
accepting the MBR timely notifying the
collecting carrier of the baggage delay
status and any other information
collected from the passenger necessary
for processing the refund, and the
collecting carrier promptly issuing the
automatic refund when it is notified that
the delay has exceeded the deadline. As
stated earlier, both carriers will be held
responsible when a refund is not issued
promptly. In situations where a ticket
agent collected the bag fee, under this
final rule, the carrier that operated the
last flight segment is both the carrier
accepting and handling an MBR and the
carrier required to provide an automated
refund. As the carrier accepting and
handling the MBR, the carrier knows
whether the consumer’s checked bag
has been significantly delayed entitling
the consumer to a refund of the bag fee.
While that carrier may not know the
identity of the ticket agent that collected
the bag fee or have the consumer’s
payment information should a refund be
necessary, the carrier can obtain such
information from the consumer as part
of the MBR form that the consumer
completes. The carrier may also choose
to use the information that the
consumer provided about the ticket
agent that collected the bag fee to seek
reimbursement.
In all the situations described above,
the Department is requiring that the
refund of the bag fee for a significantly
delayed checked bag be prompt. The
Department is defining a ‘‘prompt’’
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refund of bag fees to mean a refund
issued within 7 business days of the
expiration of the baggage delivery
deadline for tickets purchased with
credit cards or 20 calendar days of the
expiration of the baggage delivery
deadline for tickets purchased with
other payments, unless the consumer
did not file an MBR before the
expiration of the baggage delivery
deadline, in which case the refund is
due within 7 or 20 days of the date
when the MBR was filed. The
Department notes that its requirement
for carriers to refund baggage fees
within 7 business days for credit card
purchases and 20 calendar days for
purchases with other payments is
consistent with the Department’s
existing refund regulation in 14 CFR
259.5 and 14 CFR part 374. The
requirement in part 374, which
implements Regulation Z’s 7-day refund
timeline for credit card payments
applies to all airline transactions for
which refunds are due, not just ticket
refunds. The Department disagrees with
airline commenters that investigations
of refund eligibility involving multiple
carriers warrant additional time beyond
the 7- or 20-day timeframes. As stated
in the NPRM, our understanding is that
the vast majority of travel itineraries
marketed to consumers in the United
States are either itineraries involving
only one carrier or itineraries involving
fee-for-service codeshare operations for
which the operating fee-for-service
carrier works closely with the marketing
carrier on baggage handling and
resolving MBRs. For delayed baggage
claims in those itineraries,
investigations should be a
straightforward process. In other cases,
the Department expects that carriers
engaging in marketing codeshare or
interline arrangements will continue to
improve inter-airline communication
channels to increase the efficiency of
information exchange relating to
customer service, including delivering
delayed bags to passengers as soon as
possible and providing refunds for
baggage fees when appropriate.
6. Other Issues
The NPRM: The NPRM raised a
number of miscellaneous issues relating
to refunding fees for significantly
delayed bags and asked for public
comments. These issues concern: (1)
what types of bags are subject to the
refund requirement, including whether
fees for oversized/overweight bags
should be exempt from refund
requirement; (2) how to determine the
amount of refund if a fee was charged
for multiple bags under an escalated fee
scale and one or some of multiple
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checked bags are delayed, or if a
passenger paid a fixed fee for a baggage
fee subscription program that covers the
passenger’s checked bag fees for a
specified period; (3) whether there are
particular circumstances in which
airlines should not be required to issue
a refund for a significantly delayed bag;
(4) whether a carrier can require waiver
of fees and liability if a passenger
voluntarily agrees to travel without the
checked bag on the same flight; and (5)
how the baggage fee refund requirement
should apply when airlines arrange
alternative transportation or when
passengers choose not to travel on the
scheduled or substituted flight.
With regard to the types of checked
bags subject to the refund requirement,
the Department noted that the statute
requires the rule to cover ‘‘checked
baggage’’ and the Department
interpreted this to include not only bags
checked with carriers at the ticket
counters but also gate-checked bags and
valet bags. The Department added that
the statute makes no distinction or
exception for special items that are
transported as checked bags and
interpreted the statute to also cover
oversized and overweight bags.
As for the amount of baggage fee
refund to be provided if a passenger
paid a lump sum fee for multiple bags
under an escalated fee scale and one or
some of multiple checked bags are
delayed, the Department indicated its
intention to require a carrier to refund
the highest baggage fee per bag if there
is not a unique identifier for each
checked bag that correlates to the fee.
The Department stated that it would
permit the specific fee paid for the
significantly delayed bag to be refunded
if a carrier can identify the specific fee
paid for that delayed bag. For
passengers who paid for a baggage fee
subscription program, the Department
stated that it would require airlines to
provide refunds and solicited comment
on how to determine the amount of
refund to which these passengers
should be entitled. The Department
reasoned that a refund is appropriate
because the subscribers are paying a fee
to transport their bags even if it is not
on a per bag basis.
Another issue that the Department
examined in the NPRM is whether the
mandate for baggage fee refunds should
exempt certain situations. The
Department provided examples of two
instances in which a delay of a bag may
be a result of passenger inaction. The
first example was of a passenger who
fails to comply with the requirement of
U.S. Customs and Border Protection to
pick up a checked bag at the first point
of entry into the United States and
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recheck the bag, causing baggage delay.
The second example was of a passenger
who is traveling with two separate
tickets and the passenger fails to collect
the checked bag at the end of the first
itinerary and check it with the carrier on
the second itinerary. The Department
also asked whether, instead of
specifying particular circumstances in
which airlines are not required to issue
a refund for a lengthy delay in
delivering the bag, a general exception
for checked baggage delays that were a
result of a passenger’s negligence is
preferable. The Department sought
comment on what level of proof, if any,
carriers should be required to provide to
show that a bag delay was caused by the
passenger’s negligent action or inaction.
In addition, the Department analyzed
and solicited comment on whether a
carrier should be allowed to require a
waiver of fee refunds for significantly
delayed checked bags and a waiver of
incidental expenses associated with the
delay from a passenger who voluntarily
agrees to be separated from his or her
checked bags, usually due to late checkin or traveling as a standby passenger.
The Department also asked whether it
should require airlines to retain records
of waivers for a specified time period if
it were to allow such waivers. A related
issue addressed in the NPRM was
whether a baggage fee refund
requirement should apply when
passengers choose not to travel on the
scheduled or substituted flight. In the
NPRM, the Department noted that it has
tentatively determined that when
passengers voluntarily choose not to
travel on the scheduled flight or a
substitute flight offered by the carrier,
either by taking ground transportation
that the passengers arrange on their
own, or by purchasing tickets on flights
of another carrier, the baggage fee
refund requirement should not apply.
The Department stated, however, if it is
the carrier that arranges the alternative
transportation, the bag fee refund
requirement would apply, and the
baggage delay clock would start when
the passenger arrives at his or her
destination in the alternative
transportation provided.
Lastly, the Department stated that
baggage fees included in airfares, or
baggage services provided as a
complementary service due to frequent
flyer status or credit card benefits
should not be included in the refund
requirement.
Comments Received: A4A and AAPA
stated that the refund requirement
should not cover oversized/overweight
bags and other specialty checked bags
such as pets. A4A asserted that
transporting these bags involves
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32797
additional special care and costs, higher
injury risks to employees, and increased
chance of delay due to weight and
balance limits. Both commenters argued
that requiring carriers to refund fees for
these bags would disincentivize carriers
from accepting them for transportation
or cause carriers to increase the price for
transporting these bags. IATA
commented that it supports the proposal
that airlines should assign a specific fee
to each bag if using an escalated fee
scale and the proposal that when no
such assignment was made airlines
should refund the highest fee per bag.
A4A commented that passenger
negligence or failure to meet the
conditions set forth by the carrier’s
contract of carriage that causes bags to
be delayed should exempt carriers from
the refund obligation. It specifically
listed situations that it believes should
qualify for exemptions, including when:
passengers fail to pick up and recheck
bags at the international entry points,
passengers travel to ‘‘hidden cities’’ (i.e.,
passengers book a through fare with
intention to disembark mid-travel but
the bags are checked all the way through
to the final destination), passengers
purchase two separate tickets and then
fail to collect the bag and recheck with
the second carrier, passengers do not
meet the check-in and other contract of
carriage requirements, or passengers
pack prohibited items in bags. A4A also
stated that the exemption should apply
when passengers take an earlier flight as
standby or arrange their own alternative
transportation, in which case carriers
should be allowed to request passengers
sign a waiver. A4A further contended
that third-party actions that cause the
bag delay should also exempt carriers
from refund liability and these
situations include bags being mistakenly
claimed by another passenger, bag
delays due to government actions such
as bags being held by customs or airport
security, bag delays due to airportoperated system failure, negligence by
third-party delivery services that is
beyond carriers’ control, or bag delays
due to carriers’ compliance with
positive bag match requirements.
IATA, AAPA, Qatar Airways, and
Spirit supported the proposal that
carriers may request a waiver from
passengers when passengers arrange
their own alternative transportation or
when passengers choose to voluntarily
separate from their bags. IATA further
supported the proposal that the refund
requirement would apply when carriers
arrange the alternative transportation
but suggests that the clock should start
at the time of MBR filing, as opposed to
the arrival of the alternative
transportation as proposed in the
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NPRM. Spirit and Qatar Airways
supported the proposal that carriers are
not responsible for refunds when
consumers arrange for alternative
ground transportation or travel on
anther carrier’s flight.
On baggage subscription programs,
A4A, IATA, and AAPA argued that
baggage transportation services that are
purchased as part of a baggage fee
subscription service should not be
subject to the refund requirement
proposed in the NPRM. A4A argued that
carriers should be exempted from the
refund requirement because carriers
cannot accurately calculate the cost of
the bag transportation and the amount
of refund due. It further argued that
passengers purchasing the subscription
program are receiving a bargain on
baggage transportation and they
understand the risk of not receiving a
refund when a bag is delayed. A4A
commented that not providing an
exemption to the program will stifle
innovation on dynamic pricing and
comparison marketplaces.
A4A, IATA, and AAPA argued that
baggage transportation services included
as part of the fare or provided free of
charge due to the passenger’s frequent
flyer status or because the passenger
holds a branded credit card from the
airline should not be subject to the
refund requirement. Spirit, on the other
hand, stated that carriers that do not
separately charge a bag fee should be
required to provide partial ticket
refunds when bags are delayed because
these carriers have incorporated the
baggage fee into ticket prices.
Travelers United supported the
proposal to treat oversized/overweight
bags the same as regular checked bags
for the purpose of baggage fee refunds.
It also supported the rule covering gatechecked and valet bags to the extent that
baggage fees are charged. Travelers
United commented that if fees for all
bags are paid in the same transaction,
when one of the bags are delayed,
carriers should refund the highest per
bag fee. On carrier-arranged alternative
transportation, Traveler United
expressed its belief that passengers
should be protected by the same rule
regarding baggage fee refunds. It further
emphasizes that when passengers waive
their rights to baggage fee refunds, they
are not waiving their rights to
compensation related to lost or damaged
baggage. One individual consumer
expressed disagreement with airlines’
suggestion that the rule should exempt
oversized or overweight bags. The
consumer commented that the
suggestion introduces incentives for
airlines to give these bags the lowest
priority.
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The Colorado AG suggested that
instead of adopting a general category of
‘‘passenger negligence’’ that exempts
carriers from the refund obligation, the
Department should specify the
particular circumstances in which
carriers are exempted. The comment
further contended that a vague concept
of ‘‘passenger negligence’’ would likely
post challenges to consumers, carriers,
and the enforcement process, and it
would also invite carriers to deny
refunds more readily and place
consumers in a challenging position.
The comment recommended that the
structure of the rule place the burden on
the airline to establish any exception.
DOT Responses: After careful
consideration of the comments, the
Department is: (1) defining checked bags
subject to the refund requirement to
include gate-checked bags, valet bags,
checked bags that exceed carriers’
normal allowance, oversized/overweight
checked bags, and specialty checked
bags such as sporting equipment and
pets; (2) requiring the highest amount
per bag fee on an escalated fee scale be
refunded if one or some of multiple
checked bags are significantly delayed
without a unique identifier for each
checked bag that correlates to the fee;
and (3) requiring the lowest amount of
baggage fee the carrier charges another
passenger of similar status without the
subscription be refunded to a passenger
who paid a fixed price for a baggage fee
subscription program and a checked bag
is significantly delayed. The Department
is also exempting from the requirement
to refund a fee for significantly delayed
checked bag instances where the delay
is a result of: (1) passengers failing to
comply with the requirement of U.S.
Customs and Border Protection to pick
up a checked bag at the first point of
entry into the United States and recheck
the bag; (2) passengers agreeing to travel
without their checked bag on the same
flight because they checked in late for
the flight or are flying as stand-by
passengers; (3) a third-party delivery
service that is not a contactor or an
agent of the carrier and, instead, is
contracting directly with the passenger
failing to deliver the bag promptly; and
(4) passengers not being present to pick
up a bag that arrived on time at the
passenger’s ticketed final destination.
(i) Types of Bags Covered by the Refund
Requirement
The requirement adopted in this final
rule for airlines to refund baggage fees
when airlines significantly delay
delivery of checked bags does not
distinguish between different types of
checked bags. The Department is
defining checked bags to include gate-
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checked bags, valet bags, checked bags
that exceed carriers’ normal allowances,
oversized/overweight checked bags, and
specialty checked bags such as sporting
equipment and pets. This interpretation
is consistent with the language of
section 41704 note, which refers only to
‘‘checked baggage’’ and does not
distinguish between different types of
checked bags.
The Department acknowledges the
need for special handling for oversized
or overweight bags but notes that
carriers are not required to accept these
bags for transportation and those
carriers that do generally charge a
higher fee. The Department is not
persuaded by the airlines’ argument that
including oversized/overweight bags in
the refund requirement will
disincentivize carriers from accepting
these bags. We view competition the
main incentive for carriers to continue
to accept these bags for transportation,
with the prices of baggage fees
determined by the free market, based on
consumer demands, carriers’ costs and
risk, and the likelihood of timely
delivery.
(ii) Amount of Refund When Multiple
Checked Bags Are Transported Under
Escalated Fee Scale or Passenger Paid
for Baggage Subscription Programs
Having received no objections in the
comments, we are adopting the proposal
that when one of the multiple bags
checked by a passenger was
significantly delayed by a carrier that
adopts an escalated baggage fee scale,
and there is no specific fee assigned to
the delayed bag, the highest per bag fee
should be refunded.
Regarding what the amount of the
refund should be if a passenger paid for
a checked bag through a baggage
subscription program and the checked
bag is significantly delayed, the
Department is requiring that airlines
refund the passenger the amount that is
equal to the lowest amount the carrier
charges another passenger of similar
frequent flyer status without the
subscription. The Department is not
convinced by airlines’ argument that
delayed bags paid through a baggage
subscription program should be
exempted from the refund requirement.
In support of this argument, airlines
comment that passengers purchasing the
subscription are receiving a bargain on
baggage transportation and they
understand the risk of not receiving a
refund when a bag is delayed. We
disagree. Although passengers choosing
to purchase the subscription program
receive a discount on the total cost of
baggage transportation over the
subscription period based on their
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anticipated travel frequencies, they still
paid a fee to airlines to transport their
checked bags. The Department believes
that these passengers should receive a
refund if the bag delay exceeds the
applicable timeline. Because it is
difficult and impractical to determine
the amount of refund due based on the
actual per bag fee charged for the
delayed bag, the Department is requiring
a refund in the amount that is equal to
the lowest amount the carrier charges
another passenger of similar frequent
flyer status without the subscription.
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(iii) Exemptions From the Refund
Requirement
The Department generally agrees with
commenters that when passengers’ own
negligence is the cause of baggage
delivery delay, carriers should be
exempted from the refund requirement.
The Department also shares the
Colorado Attorney General’s concerns
that adopting a general category of
‘‘passenger negligence’’ that exempts
carriers from the refund obligation may
pose challenges to both consumers and
carriers. As a result, the Department
specifies in this final rule the particular
circumstances in which carriers are
exempted.
In the NPRM, the Department
described situations where the baggage
delivery delay was due to a passenger’s
failure to comply with the requirement
of U.S. Customs and Border Protection
to pick up a checked bag at the first
point of entry into the United States and
recheck the bag and a passenger failure
to pick up the bag at the transition point
and recheck the bag with the second
carrier when traveling with two separate
tickets.68 Many other situations were
also cited by the airline commenters as
potentially qualifying for exemptions
because the passengers’ own action of
negligence caused the baggage delivery
delay. Of the various examples
suggested by commenters as potentially
qualifying for an exemption, the
Department agrees that situations where
passengers fail to pick up and recheck
bags at international entry points into
the United States qualify for an
exemption from the refund bag fee
requirement. The Department is also
persuaded that an exemption is
appropriate when passengers are not
present to pick up a bag that arrived on
time at the passenger’s ticketed final
destination whether that is because the
passenger traveled to a ‘‘hidden city,’’
the passenger failed to pick up the bag
before taking a flight on a separate
ticket, or any other reason that is due to
68 86
FR 38423 (July 21, 2021).
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the fault of the passenger if documented
by the carrier.
For different reasons, the Department
has concluded that the other situations
described do not qualify for an
exemption. For example, carriers
suggest that the Department should
exempt carriers from the refund
obligation when the baggage delay was
because passengers packed prohibited
items in their checked bags. However,
based on the Department’s
understanding of the procedures of the
Transportation Security Administration
(TSA), in the vast majority of these
cases, the prohibited items would be
removed from the bags during the
screening process, and the bags would
be allowed to continue their travel.
Based on this understanding, the
Department does not believe it is
appropriate to categorically exempt bags
that are temporarily held by TSA due to
prohibited items being found in the
bags. In addition, a bag is not late when
passengers purchase two separate
tickets and fail to collect the bag and
recheck the bag with the second carrier.
The second carrier could not transport
the bag on the same flight as the
passenger when the bag was never
checked by the passenger, and the first
carrier is exempted for the delay
because the passenger failed to pick up
the bag that arrived on time at the
passenger’s ticketed final destination.
Similarly, a bag is not late when a thirdparty that contracted directly with the
passenger picks it up from the carrier
before 12 hours for domestic flights, 15
hours for international flights of 12
hours or less in duration, and 30 hours
for international flights of over 12 hours
in duration. If the third-party then
caused a delay in the bag reaching the
passenger, the carrier does not owe a
refund of the bag fee to the passenger.
As for the comment that the
Department should exempt carriers from
refund liability when the baggage delay
was a result of third-party actions, the
Department is of the view that an
exemption is not appropriate when the
third-party actions took place while the
bag was in the custody of the airline
before it has been delivered to the
passenger. Airlines in their comments
suggest that the Department should
exempt a list of situations in which
actions by a third-party cause the
baggage deliver delay. The Department’s
view is that a third-party’s action that
directly causes significant bag delivery
delays while the bag is under a carrier’s
custody should not be exempted from
the requirement to refund the bag fee.
Consistent with the Department’s policy
for reporting mishandled baggage by
U.S. carriers, a bag is in the custody of
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32799
a carrier beginning at the point in time
which the passenger hands the bag to
the carrier’s representative or agent, or
leaves the bag at a location as instructed
by the carrier; a carrier’s custody ends
when the passenger, a party acting on
the passenger’s behalf, or another carrier
takes possession of the bag.69 Bag delays
due to third-party actions (e.g., security
authority or Customs holding bags,
airport baggage processing system
failure, or recovery bag delays due to
carriers’ compliance with the positive
passenger-bag match requirement) are
not permissible grounds for exempting
the carriers from the baggage fee refund
obligation because the affected bags are
under carriers’ custody. Also, bag delays
caused by another passenger picking up
the bag by mistake before the passenger
or a party acting on the passenger’s
behalf takes physical possession of the
bag is not exempted because the
passenger provided his or her bag to the
carrier and the bag was not available to
be picked up by that passenger at the
passenger’s final destination.70
Consistent with this approach, the
Department considers baggage delays
caused by a third-party delivery service
to be a ground to exempt the carrier
from refunding baggage fees only if the
third-party is not a contactor or an agent
of the carrier and, instead, is contracting
directly with the passenger. For
example, if a passenger arranges a thirdparty delivery service to pick up the bag
at the passenger’s final destination
airport and transport it to a location
designated by the passenger, the airline
is exempted from refunding baggage fees
if the baggage delivery is delayed by that
third-party, who took possession of the
bag from the carrier on behalf of the
passenger.
(iv) Waiver of Fee Refunds and
Incidental Expenses for Voluntary
Separation
The Department is exempting airlines
from the refund obligation when
passengers voluntarily agree to travel
without their checked bags on the same
flight as a way to make the flight when
they checked in late for the flight or are
flying as stand-by passengers. We agree
with commenters that carriers offering
passengers different travel options that
meet their needs, including the option
of traveling without their bags on the
same flight, benefits consumers. In those
situations where carriers are willing to
accommodate passengers but may not
have adequate time to load the
69 See, Technical Reporting Directive #30A—
Mishandled Baggage and Wheelchairs and Scooters
(Amended), Dec. 21, 2018.
70 Id.
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passengers’ bags onto the same flights,
we believe it is fair to exempt carriers
from the baggage fee refund obligation
provided that carriers clearly disclose to
the passenger that the checked bag may
not arrive promptly. In those
circumstances, carriers are permitted to
require passengers sign a document
waiving their right to a refund of the
baggage fees if the bag delivery is
delayed beyond the regulatory
timelines. The waiver that carriers seek
from passengers in these situations must
be limited to passengers relinquishing
their right to refund of bag fees if
delayed beyond the regulatory
timelines. The waiver should also
include an estimated delivery time and
a delivery location that the carrier and
the passenger agreed upon. The waiver
must not include language suggesting
that the passengers are relinquishing
their right to refund of bag fees if the bag
is lost, their right to compensation for
damaged, lost, or pilfered bags, or their
right to incidental expenses arising from
delayed bags beyond the agreed upon
delivery date/time consistent with the
Department’s regulation in 14 CFR part
254 and applicable international
treaties.
(v) Alternative Transportation
The Department has considered the
comments regarding whether the
baggage fee refund requirements should
apply to significantly delayed bags
when passengers arrange for alternative
transportation. Passengers choosing to
arrange their own alternative
transportation even after already having
handed over their checked bags to
carriers’ custody often do so because
their flight has been canceled or
significantly delayed. As explained later
in this document, if a flight is canceled
or significantly changed and the
passenger chooses not to fly with the
carrier, the passenger is entitled to
receive a refund of the ancillary service
fee, including baggage fee, for a service
that they paid for and did not receive.
Unless the carrier delivers the checked
bag to the passenger at an agreed-upon
location, the checked bag fee must be
refunded.
The Department is also not persuaded
that it should exempt from the
requirement to refund fees for
significantly delayed bags when the
carrier arranges alternative air travel for
its passengers because of a flight
cancellation or significant change by the
carrier. The requirement to refund fees
for significantly delayed bags still
applies when the alternative
transportation that the carrier arranges
is a later flight operated by that carrier
or a flight by another carrier. In those
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situations, the start of the delay when
measuring the length of the delay for a
carrier to deliver a checked bag is when
the passenger arrives at his or her
destination on the alternative air
transportation, consistent with the
Department’s position on start of the
baggage delay when passengers fly on
their original scheduled flight. Because
the statute applies to delays in
transporting bags on flights and not on
ground transportation, however, this
rule requiring carriers to refund fees for
significantly delayed bags does not
apply to the alternative ground
transportation.
As a final matter, the Department is
providing clarification that the refund
requirement of 49 U.S.C. 41704 note
covers ‘‘any ancillary fees paid by the
passenger for checked baggage’’
(emphasis added). It is irrelevant
whether the consumer uses a credit
card, frequent flyer miles/points, travel
vouchers, or something else to pay the
fee for the checked bag. An ancillary fee
is a fee for an optional service that is not
included as part of the fare and includes
baggage fees charged separately from the
ticket price. To the extent that there was
no separate bag fee paid by any form of
payment (e.g., credit card, airline miles)
because the transport of baggage was
included as part of the fare or the
baggage fee was waived due to the
passenger’s airline loyalty program
status or as a benefit of using an airlineassociated credit card, carriers are not
required to provide a refund as the
passenger did not pay an ‘‘ancillary fee’’
for the checked bag.
III. Refunding Ancillary Service Fees
for Services Not Provided
1. Covered Entities and Flights
The NPRM: The Department proposed
to mandate U.S. and foreign air carriers
provide refunds to consumers of the fees
a passenger pays for an ancillary service
related to air travel on a flight to, from,
or within the United States that the
passenger does not receive, including
retaining the existing regulatory
requirement for such refunds due to
oversales and flight cancellations 71 and
other situations when the ancillary
service is not available to the passenger.
The Department is required by 49 U.S.C.
42301 note prec. to cover U.S. and
foreign air carriers that offer ancillary
services for a fee on their domestic and
71 14 CFR 259.5(b)(5) requires carriers to provide
prompt refunds where due, including refunding
fees charged to a passenger for optional services
that the passenger was unable to use due to an
oversale situation or flight cancellation.
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international flights.72 With respect to
ticket agents, similar to the requirement
on refunding baggage fees for
significantly delayed bags, although the
Department is not required by statute to
cover them, the NPRM stated that the
Department has independent authority
under 49 U.S.C. 41712, which prohibits
ticket agents from engaging in unfair or
deceptive practices in air transportation,
to include them in the regulation if
deemed appropriate. As such, in the
NPRM, the Department sought a general
overview of ticket agents’ role in the
transaction and collection ancillary
service fees and the process of how fees
collected by ticket agents are transferred
to carriers. The NPRM stated that this
information would assist the
Department in determining whether its
regulation on ancillary fee refund
should address ticket agents’ role and
the role of other non-carrier entities
involved in the sale of ancillary fees.
Comments Received: The Department
received no comments regarding the
scope of covered flights and covered
carriers. With respect to ticket agents,
IATA indicated that the entity that
collected the ancillary fee should be
responsible for the refund. Spirit also
supported a requirement for ticket
agents to issue refunds if they collected
the fees. Ticket agent representatives’
position on whether they should be
required to refund ancillary service fees
when the services are not provided is
similar to their view on refunding
baggage fees for significantly delayed
bags, which was summarized in that
section. In short, ticket agent
representatives believe that based on the
statutory language of 49 U.S.C. 42301
note prec., which referred only to air
carriers, the infrequency of ticket agenttransacted ancillary fees, and the role of
ticket agents in those transactions (i.e.,
acting as the agents of airlines), ticket
agents should not be required to refund
ancillary service fees.
DOT Responses: The Department is
requiring U.S. and foreign carriers that
operate scheduled passenger service to,
within, and from the U.S. to provide a
refund to passengers of fees charged for
an ancillary service that is paid for but
72 Section 421 of the FAA Reauthorization Act of
2018 (2018 FAA Act), which was codified under 49
U.S.C. 42301 note prec., directs the Department to
promulgate regulations requiring ‘‘each covered air
carrier’’ to provide refunds of ancillary service fees
that a passenger paid for but did not receive.
Section 401 of the 2018 FAA Act defines ‘‘covered
air carrier,’’ as used in Section 421, to mean means
an air carrier or a foreign air carrier as those terms
are defined in section 40102 of title 49, United
States Code. https://www.congress.gov/bill/115thcongress/house-bill/302/text?q=%7B%22
search%22%3A%5B%22FAA+Reauthorization
%22%5D%7D.
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not provided. The Department is
applying this requirement to carriers
regardless of the aircraft size that the
carriers operate. With regard to ticket
agents, the Department is not adopting
in this final rule a specific requirement
for ticket agents to provide refunds of
ancillary service fees even if ticket
agents collect the fees. The Department
believes that whether an ancillary
service paid by a consumer was
provided by an airline is a factual matter
better handled directly by the airline
through direct communication with
passengers. The Department views that
placing responsibility to provide such
refunds on ticket agents may further
complicate the matter and cause
unnecessary delays for consumers to
receive a refund. Further, 49 U.S.C.
42301 note prec. directs the Department
to promulgate regulations requiring
‘‘covered air carriers’’ to provide
refunds for ancillary service fees. For
these reasons, in this final rule, the
Department is placing the responsibility
to provide refunds of ancillary service
fees for services not provided on carriers
rather than ticket agents. The
Department will continue to monitor the
transactions of ancillary service fees
conducted by ticket agents and may
revisit the issue in the future should it
become necessary.
2. Need for Rulemaking
The NPRM: The Department proposed
to require refunds of ancillary service
fees for services paid for but not
provided to implement a statutory
provision of the FAA Reauthorization
Act of 2018 (49 U.S.C. 42301 note prec.),
and to codify the Department’s
longstanding enforcement practice of
viewing any airline practice of not
refunding fees for ancillary services that
passengers paid for but are not provided
as an unfair or deceptive practice in
violation of 49 U.S.C. 41712. The
statutory provision in 49 U.S.C. 42301
note prec., requires the Department to
promulgate a rule that mandates that
airlines promptly provide a refund to a
passenger of any ancillary fees paid for
services related to air travel that the
passenger does not receive, including on
the passenger’s scheduled flight, on a
subsequent replacement itinerary if
there has been a rescheduling, or for a
flight not taken by the passenger.
Currently, the Department’s regulation
in 14 CFR part 259.5(b)(5) explicitly
requires that airlines refund fees
charged to a passenger for optional
services that the passenger was unable
to use due to an oversale situation or
flight cancellation. Under the statutory
authority of 49 U.S.C. 41712, which
authorizes the Department to investigate
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and, if necessary, take action to address
unfair or deceptive practices or unfair
methods of competition by air carriers,
foreign air carriers, or ticket agents, the
Department has a longstanding
enforcement policy that considers any
airline practice of not refunding fees for
ancillary services that passengers paid
for but are not provided to be an unfair
or deceptive practice in violation of 49
U.S.C. 41712, which goes beyond the
situations related to oversales or flight
cancellations. In the NPRM, DOT
proposed to retain the existing
regulatory requirement regarding
ancillary fee refunds arising from flight
oversales or cancellations, and to further
clarify that the refund requirement
would apply to any other situation in
which an airline fails to provide
passengers the ancillary services that
passengers have paid for (e.g.,
passengers paid for using the in-flight
entertainment (IFE) system on a
scheduled flight but the IFE system was
broken and could not be used by the
passengers). DOT stated that the
inclusion of regulatory text requiring
that airlines must refund ancillary fees
for services related to air travel that
passengers did not receive, as provided
in 49 U.S.C. 42301 note prec., would not
impose additional requirements on
airlines as airlines are already providing
refunds of ancillary fees when they fail
to provide services that passengers paid
for, consistent with the Department’s
interpretation of section 41712.
Comments Received: Virtually all
consumers and consumer rights
advocacy groups who submitted
comments expressed their general
support for this rulemaking. The
majority of airlines and airline trade
associations that commented on the
NPRM also supported the Department’s
rulemaking to implement the
Congressional mandate. Among airline
commenters, however, AAPA argued
that it is not necessary to promulgate a
new rule because airlines generally are
already providing refunds for services
not rendered on their initiative. AAPA
also noted that mandating prescriptive
rules such as compulsory refunds for
ancillary services would stifle
innovation and restrict consumers’
freedom of choice as it limits airlines’
ability to offer other methods of
compensation, such as vouchers or
airline miles, which could be more
attractive to the customer. Qatar
Airways commented that it already
offers refunds of ancillary service fees
when there is a flight cancellation. Qatar
also states that the majority of ancillary
products are transferred to the new
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itinerary when a schedule change has
occurred.
DOT Responses: The Department has
concluded that the promulgation of this
regulation not only fulfills a statutory
mandate, but also is necessary to
provide consistency and clarity to the
regulated industry. Although many
airlines are already providing refunds of
fees for various ancillary services that
they did not provide, this final rule
defines the scope of ancillary services
that are subject to this refund
requirement and ensures that all carriers
comply with the mandatory
requirements following a unified
standard with respect to the method and
timeliness of refunds. The Department
rejects AAPA’s argument that having a
compulsory refunds requirement would
stifle innovation as under the
mandatory refund requirement, airlines
continue to have the option to offer
other compensation such as vouchers or
airline miles to consumers who did not
receive the ancillary services they paid
for, as long as carriers clearly inform
consumers that they are entitled to a
refund for the fees at the same time or
before offering vouchers or other noncash compensation.
3. Definition of Ancillary Services
The NPRM: The provision in 49
U.S.C. 42301 note prec. requires that
airlines refund ancillary fees paid for
services ‘‘related to air travel.’’ As stated
in the NPRM, the Department has not
defined ‘‘ancillary services’’ in its
aviation economic regulations and
proposes to adopt a definition that is
substantially identical to the definition
for ‘‘optional services’’ in 14 CFR
399.85(d) 73 which requires U.S. and
foreign air carriers to prominently
disclose on their websites marketing air
transportation to U.S. consumers
information on fees for all optional
services available to a passenger
purchasing air transportation.
Specifically, DOT proposed to define
‘‘ancillary service’’ to mean any service
related to air travel provided by a
covered carrier, for a fee, beyond
passenger air transportation. DOT
specified that such service includes, but
is not limited to, checked or carry-on
baggage, advance seat selection, access
to in-flight entertainment system, inflight beverages, snacks and meals,
pillows and blankets and seat upgrades.
DOT noted that the definition in section
73 ‘‘Optional services’’ is defined as any service
the airline provides, for a fee, beyond passenger air
transportation. Such fees include, but are not
limited to, charges for checked or carry-on baggage,
advance seat selection, inflight beverages, snacks
and meals, pillows and blankets and seat upgrades.
14 CFR 399.85(d).
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399.85(d) does not include fees charged
for services to be provided by entities
other than airlines, such as hotel
accommodations or rental cars, which
are commonly offered by some airlines
as a package during the airfare
reservation process. DOT sought
comments on whether adopting a
definition for ‘‘ancillary service’’ that is
similar to the definition of ‘‘optional
service’’ in section 399.85(d) is
appropriate in the context of ancillary
service fee refunds.
Comments Received: Airline and
consumer commenters supported the
proposed definition for ‘‘ancillary
service.’’ Spirit stated that it supports
the Department’s efforts to harmonize
the definition of ‘‘ancillary services’’
with that of ‘‘optional services.’’ AAPA
commented that an alignment of
definitions is crucial to avoid confusion
for all stakeholders concerned,
including passengers, airlines, and
service providers. A4A noted that
Department should clarify, in the
definition, that ancillary service fees are
not costs included in a fare or as a
prerequisite; and that ‘‘ancillary
services’’ do not include services
provided pursuant to an agreement
directly between the passenger and a
third-party service provider. Among
consumer commenters, Travelers United
expressed its support for the
Department’s proposed definition of
‘‘ancillary services.’’
Panasonic Avionics, a manufacturer
of in-flight entertainment (‘‘IFE’’) and
in-flight connectivity (‘‘IFC’’) systems
and a service provider, commented that
the proposed refund requirement should
apply only to covered carriers when
they enter into a contract directly with
a passenger for the provision of an
ancillary service and process that
passengers’ payment for that ancillary
service. It further stated that the rule
should not be construed to obligate
covered carriers to issue refunds when
a passenger has contracted with a thirdparty service provider for an ancillary
service and made payment to that thirdparty provider because in that case, the
passengers’ right to a refund will be
governed by the terms and conditions of
sale between the third-party provider
and the passenger, with the third-party
provider being governed by the
consumer protection regulations of its
applicable industry. Panasonic
suggested that the Department’s final
rule should clarify in the applicability
section that the regulation ‘‘is not
intended to address services provided
by third-party service providers that
entered into a service contract and/or
terms and conditions directly with the
passenger.’’ Panasonic also suggested
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that the definition of ‘‘ancillary service’’
should clarify that it does not include
services provided by third-party service
providers that entered into a service
contract directly with the passenger.
The Department also received a
comment from the Colorado Attorney
General, who, among other things,
recommended that the Department’s
final rule ensure that consumers paying
additional fees for add-on services truly
receive items of tangible value.
DOT Response: With minor
modifications, the Department is
adopting the NPRM’s proposed scope
and definition for ‘‘ancillary services’’
in this final rule. The Department has
considered A4A’s comment that
ancillary services subject to the refund
requirement should not include services
the costs of which are included in the
airfare. We agree and have modified the
definition of ancillary service by adding
the word ‘‘optional’’ to reflect that the
ancillary services covered under this
rule are services that consumers can
purchase at their discretion, and they do
not include services mandatorily
included in airfares or complimentary
services provided to passengers without
a separate fee.74
The Department has also considered
Panasonic’s and A4A’s comments
regarding the need to expressly clarify
that ‘‘ancillary services’’ in this rule do
not include services provided pursuant
to an agreement directly between the
passenger and a third-party service
provider. The Department’s authority to
prohibit unfair or deceptive practices
under 49 U.S.C. 41712 is limited to
practices by U.S. carriers, foreign air
carriers, and ticket agents in air
transportation or the sale of air
transportation. Also, the Department’s
authority to mandate prompt refund to
a passenger of any ancillary fees paid for
services related to air travel that the
passenger did not receive pursuant to 49
U.S.C. 42301 note prec. is limited to
carriers. The Department does not have
the authority to regulate the practices of
other entities under these statutory
provisions. Accordingly, while not
adopting the suggested rule text
amendments by Panasonic, we are
clarifying that services provided to
74 For passengers who did not receive an ancillary
service because of an airline cancellation or a
significant change of flight itinerary and the cost of
the ancillary service is included in the airfare as a
mandatory charge, carriers are required to refund
the entire amount of airfare (all government taxes
and fees and all mandatory carrier-imposed fees).
See 14 CFR 260.6(a). To the extent that the cost of
the ancillary service is not included in the airfare,
carriers are required to refund the fee when the
ancillary service was not provided because of a
flight cancellation or significant change. See 14 CFR
260.4(a).
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passengers in relation to air travel
pursuant to a contract between
passengers and an independent thirdparty provider that does not act as an
agent or contractor of an airline are not
covered by this refund requirement. The
Department understands that some
independent third-party service
providers may rely on airlines to refer
interested customers to them for service
purchases. In circumstances where an
airline facilitates the purchase of an
ancillary service but is not a direct party
in the service contract, the Department
expects the airline to provide clear
disclaimer regarding the nature of the
service contract and inform consumers
that they should communicate directly
with the service providers for any issues
related to the service.
4. Refund Eligibility and Promptness of
the Refund
The NPRM: The provision at 49 U.S.C.
42301 note prec. requires covered
carriers to refund ancillary service fees
for services that ‘‘a passenger does not
receive, including on the passenger’s
scheduled flight, on a subsequent
replacement itinerary if there has been
a rescheduling, or for a flight not taken
by the passenger.’’ The Department
interpreted the statute to mean that a
passenger would be eligible for a refund
if he or she did not receive the ancillary
service paid for because (1) the service
was not made available to the passenger
on the flight he or she took (either the
original flights or an alternative flight
due to cancellation or schedule changes
made by the airlines or due to an
oversales situation); or (2) if the
passenger did not take any flight due to
the airline canceling the flight or
making a significant change to the flight.
The proposal was focused on whether a
carrier failed to fulfill its obligation to
provide the service, as opposed to
whether the service was utilized by the
passenger. If the service was available
but a passenger did not use the service,
the passenger would not be entitled to
a refund. Also under this proposal, if
the ancillary service is not available
because a flight schedule change
affirmatively made by the passenger or
due to passenger action, carriers are not
required to refund the service fee.
Regarding ‘‘prompt’’ refunds, the
Department proposed to apply the same
standards to ancillary service fees when
refunds are due that is currently
applicable to airline ticket refunds. In
both situations, prompt refund would
mean refunds within seven days for
credit card transactions and 20 days for
transactions involving cash, checks,
vouchers, or frequent flyer miles after
the entity responsible for issuing a
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refund receives a request for a refund
and the documentation necessary for
processing the refund.
Comments Received: Virtually all
airlines and airline trade organizations
that provided comments supported the
Department’s proposal that a passenger
would be entitled to a refund of the
ancillary service fee if the passenger did
not receive the ancillary service. Several
airlines commented that the
Department’s rule should expressly state
that a refund would not be required
when the service was available but was
not used by the passenger, when the
passenger voluntarily changes or
cancels their flight, or when the
passenger violates the check-in
requirements, the contract of carriage, or
related policies. Spirit requested
clarification on how to determine
whether a service ‘‘was not provided’’
and whether a partial provision of the
service would entitle a passenger to a
refund. A4A stated that a refund should
not be required for issues relating to
partial provision of a service or the
quality of the purchased ancillary
service, as it would be impossible for a
carrier to determine when refunds
would be due or the proper amount of
the refund. IATA and AAPA expressed
their support for applying the same
‘‘promptness’’ standards to refunding
ancillary service fees when refunds are
due that is currently applicable to
refunds for tickets, fees for optional
services that could not be used due to
an oversale or flight cancellation, and
fees for lost bags.
A joint comment by Business Travel
Coalition and multiple other consumer
rights advocacy groups 75 stated that the
Department should require carriers to
automatically provide refunds for
ancillary services not provided without
consumers needing to complain. The
consumer advocacy groups further
stated that carriers should be required to
proactively track when ancillary
services paid for by passengers are not
provided and to issue refunds
automatically. They also expressed
concerns that any regulation requiring
passengers to seek out refunds will
result in fewer refunds than consumers
are entitled to receive. Travelers United
stated its support of the Department’s
proposal and opines that passengers
must request any refund of ancillary
fees. Travelers United further suggested
that the Department establish a form
that can be used to notify both the
airline and DOT at the same time
75 Consumer Action, Consumer Federation of
America, Consumer Reports, Edontravel.Com,
Flyersrights.Org, National Consumers League,
Travel Fairness Now, and U.S. PIRG.
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regarding any refund request for
ancillary service not provided.
In relation to its comments regarding
the exclusion of third-party provided
services from the definition of
‘‘ancillary services,’’ Panasonic stated
that in the context of satellite services
it provides, the discussion around
refund eligibility must be left to the
terms and conditions established
between the customer and the service
provider, not the covered carrier.
However, Panasonic suggested that
covered carriers be required to post
information related to contacting the
third-party service providers’ support
centers on carriers’ websites or other
locations.
DOT Response: After carefully
considering the comments received, the
Department has determined that, under
certain circumstances where consumers’
rights to refunds of ancillary services is
undisputed, it is not necessary for
carriers to wait to receive consumers’
refund requests to provide refunds.
More specifically, carriers are required
to automatically refund fees for
ancillary services in instances where the
service was not available for any
passenger who paid for the service, such
as unavailable Wi-Fi for the entire flight.
It should not be necessary for the
consumer to separately request a refund
under these circumstances because the
carrier knows that no one on that flight
received the service.
The Department does not believe an
‘‘automatic’’ refund approach in the
same way is workable if the ancillary
service is only unavailable to an
individual passenger or passengers (e.g.,
seatback entertainment equipment
malfunction). In these situations, the
operating carrier of the flight on which
the paid ancillary service was not
provided will need to be informed of the
issue so they can conduct an
investigation and verify refund
eligibility. In our view, the affected
consumer notifying the operating carrier
when a paid-for service is not received
is the most direct and efficient way to
initiate the refund process. Notifying the
operating carrier about the service not
being provided is implicitly a request
for refund by a consumer. The
Department believes that notifying the
operating carriers about the service
issue should not be a significant burden
to consumers. Carriers should make
information available on their website
on the different avenues available to
customers to report such problems.
Further, to the extent the operating
carrier and the carrier that collected the
ancillary service fee (merchant of
record) are different carriers, the
Department is requiring the operating
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carrier to, without delay, verify the
passenger’s claim about the ancillary
service not being provided and notify
the collecting carrier if this is the case
as described more fully in the next
section, so that the collecting carrier can
provide an automatic refund. The
collecting carrier is responsible for
providing the refund. However, if a
ticket agent collected the ancillary
service fee, then the operating carrier
that failed to provide the ancillary
service is responsible for providing the
automatic refund.
Regarding comments on how to
determine whether a service ‘‘was not
provided’’ and whether a partial
provision of the service would entitle a
passenger to a refund, the Department
interprets the provision of section 42301
note prec. requiring refunds of fees for
services that ‘‘the passenger does not
receive’’ to mean a carrier has failed to
fulfill its obligation to provide the
service as opposed to the quality of the
purchased ancillary service not being up
to the expectation of the passengers. The
Department does consider partial
service such as providing Wi-Fi service
for only a portion of the flight when a
consumer paid for Wi-Fi service to
entitle a consumer to a refund.
The Department generally agrees with
airlines’ comments that a refund should
not be required when the service was
available but was not used by the
passenger. The Department further
recognizes that actions by consumers
may directly result in the pre-paid
ancillary services not being available to
passengers and in these situations,
carriers are not required to provide
refunds for the ancillary service fees.
The actions by passengers that exempt
carriers from the obligation to refund
fees for ancillary services that a
passenger does not receive include the
passenger taking another flight due to
non-compliance with minimum checkin time requirement or passengers being
denied boarding on a flight due to noncompliance with carriers’ contracts of
carriage or governmental requirements.
The Department notes that passengerinitiated cancellations or changes
permitted by the terms of the tickets
should not be a ground for carriers to
refuse refunds of ancillary service fees
that the passengers do not receive. For
example, if a passenger holds a flexible
ticket that allows the passenger to
change flights without charge and the
passenger changes to a new flight where
the ancillary service that the passenger
has paid for is not available, the
passenger is entitled to a refund of the
fee for that ancillary service.
With respect to Panasonic’s comments
on how to determine whether a refund
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is due for services provided by an
independent third-party provider, as
stated in the previous section,
passengers not receiving a service they
purchased directly from a third-party
provider are not eligible to receive a
refund under this rule as this rule
applies to carriers and ticket agents. The
passengers’ refund eligibility will be
governed by the terms and conditions of
the service contract with the third-party
provider and subject to applicable
consumer protection laws. As suggested
by Panasonic, the Department
encourages carriers to provide
consumers information on how to
contact these third-party entities. The
Department also reminds carriers that
when promoting or facilitating the
purchase of ancillary services or
products provided by third-party
entities, carriers may not provide
information that is misleading to
consumers as to which entity is
responsible for providing the service or
issuing refunds to dissatisfied
consumers.
On the timeliness of refunds, the
Department is adopting the same
‘‘promptness’’ standards for refunding
ancillary service fees as proposed. A
‘‘prompt’’ refund of ancillary service
fees means a refund issued within 7
business days for credit card payments
or within 20 calendar days for noncredit card payments. For automatic
refunds, the 7/20-day clock starts when
a consumer’s right to a refund of an
ancillary service fee is clear. For
circumstances where an ‘‘automatic’’
refund approach is not applicable, the
7/20-day clock starts when the
passenger has notified the operating
carrier about the unavailability of the
service. The Department notes that
adopting the 7- and 20-day refund
timelines across the board on various
refund issues provides consistency to
consumers, carriers, and other
stakeholder and streamlines carriers’
customer service procedures, complaint
resolutions, and training.
5. Entity Responsible for Refund
The NPRM: The Department
recognized that for codeshare or
interline itineraries or ticket agentinvolved ancillary service fee
transactions, the entity that collected
the ancillary fee may not necessarily be
the entity that is responsible for
providing the ancillary service. Similar
to the multiple-carrier scenario for
refunding baggage fees for significantly
delayed bags, the Department proposed
to hold the carrier that collected the
ancillary service fee responsible for
issuing a refund when the ancillary
service was not provided. When a ticket
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agent collected the ancillary service fee,
the Department noted its understanding
that the fee collected by a ticket agent
is passed on to the carrier whose ticket
stock is used for issuing the ticket and
proposed to hold that carrier
responsible for issuing the refund. The
Department further noted that 49 U.S.C.
42301 note prec. requires airlines to
refund ancillary fees paid for services
related to air travel. For multiple-carrier
itineraries for which a ticket agent
collected the fee, the Department
proposed that the last operating carrier
issue the refunds, similar to the
proposal for refunding baggage fees for
delayed bags. The Department sought
general information on ticket agents’
role in the transaction and collection of
ancillary service fees.
Comments Received: Comments on
ticket agents’ responsibility to refund
were largely focused on refunding
baggage fees for delayed bags. However,
most comments also mentioned that
their positions on ticket agents’
responsibility to refund baggage fees
should also apply to refunding ancillary
fees for services not provided. In
summary, airline commenters believed
that ticket agents should be responsible
for refunding ancillary service fees if
they collected the fees, especially for
multiple-carrier itineraries. One
consumer rights advocacy group argued
that airlines should ultimately be
responsible for refunds, while two ticket
agent representatives argued that
airlines should be responsible. Details of
these comments are provided in the
comment summary section for
refunding baggage fees for significantly
delayed bags.
DOT Response: For multiple-carrier
itineraries where one of the carriers
collected the ancillary service fees, the
Department is adopting the same
approach as for refunding fees for
delayed bags to require the carrier that
collected the ancillary service fees (i.e.,
merchant of record) to provide refunds
when the services were not provided,
regardless of whether the ancillary
service at issue was not provided on a
flight operated by the collecting carrier.
In the Department’s view, this approach
is the most straightforward way to
initiate and process a refund request
from consumers’ perspectives. The
Department believes that the collecting
carriers are in the best position to
process and issue refunds as they have
direct visibility of the passengers’
selected ancillary services, the total
amounts consumers were charged, and
consumers’ payment information. As
noted in the prior section, automatic
refunds are not required when the
ancillary service is only unavailable to
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an individual passenger or passengers
and under these circumstances
passengers would need to notify the
operating carrier that an ancillary
service that they paid for was not
available to them (e.g., seat upgrade was
not provided or seatback entertainment
equipment malfunction), so carriers can
conduct an investigation to verify
refund eligibility.
In situations where the carrier that
collected the ancillary service fee and
the carrier(s) operating the flights are
different entities, the Department is
requiring the carrier(s) that failed to
provide the passenger the ancillary
service that the passenger paid for to
provide that information to the
collecting carrier without delay. Should
the carrier that failed to provide the
ancillary service not know which entity
collected the ancillary service fee from
the passenger, it can obtain that
information from the passenger. The
Department’s Office of Aviation
Consumer Protection will determine the
timeliness of the information provided
to the collecting carrier based on the
totality of the circumstances, including
how soon after becoming aware of the
lack of service to the passenger did the
carrier that failed to provide the
ancillary service notify the collecting
carrier.
The collecting carrier remains
responsible for providing the refund.
For example, a passenger purchased an
itinerary that has two flight segments,
with the first segment operated by
Carrier A, and the second segment
operated by Carrier B. Carrier A
collected the ancillary service fee
(merchant of record) for a seat upgrade
on the second flight segment but the
service was not provided. As this
ancillary service was unavailable only
to this passenger, automatic refund is
not required. To obtain a refund, the
passenger must inform Carrier B that the
paid for seat upgrade was not provided
on the second segment. Carrier A will be
responsible for issuing the refund
because it is the collecting carrier, and
Carrier B is responsible for informing
Carrier A that the paid for seat upgrade
was not provided. The 7/20-day refund
timeline starts for Carrier A at the time
that it receives information from Carrier
B that the paid for ancillary service was
not provided.
For the same reasons articulated in
the section on refunding baggage fees for
significantly delayed bags, in cases
where ancillary service fees are
collected by a ticket agent for a singlecarrier itinerary, the Department will
hold that carrier responsible for issuing
the refund. The Department notes that
ticket agent representatives stated in
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their comments that when ticket agents
collect ancillary service fees including
baggage fees, they do so primarily with
the authorizations of airlines and act as
airlines’ agents. Airline commenters did
not dispute this assertion. This
approach is also consistent with 49
U.S.C. 42301 note prec., which requires
‘‘each covered carrier’’ to refund
ancillary fees paid for services that are
not provided. Ticket agents are
encouraged to establish effective
communication channels with airlines
that authorize them to transact ancillary
service fees and facilitate the refunds by
providing necessary information to
airlines.
Furthermore, when a ticket agent
collects ancillary service fees for
multiple-carrier itineraries, the
Department is requiring the operating
carrier of the flight on which the paid
ancillary service was not provided to
issue the refund. To the extent that the
carrier that failed to provide the
ancillary service does not know whether
the entity that collected the ancillary
service fee from the passenger is a ticket
agent or a carrier, that information can
be obtained from the consumer. The
Department believes that when no
carrier is the merchant of record, the
operating carrier that failed to provide
the service is in the best position to
issue refunds to the affected consumers.
That carrier would know if a service
was not provided on the entire flight
that it operated or if specific passengers
on that flight did not receive the service.
Because the operating carrier that failed
to provide the service is the entity that
knows or can verify whether the
passenger received the ancillary service
that the passenger paid for when the
service was to be provided on its own
flight, that carrier is the responsible
party for providing a prompt refund
when due. The Department notes that,
to the extent that the carrier that failed
to provide the ancillary service does not
know whether the entity that collected
the ancillary service fee from the
passenger is a ticket agent or a carrier,
that information can be obtained from
the consumer. Although the operating
carrier that failed to provide the
passenger that ancillary service remains
responsible for providing the refund
when a ticket agent collected the fee, a
fee-for-service carrier that fails to
provide the ancillary service may
choose to rely on other entities, such as
their marketing codeshare partner, to
issue refunds to consumers on its
behalf. The Department expects the
parties to work together and develop
effective communication to ensure that
information necessary to process
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passengers’ refunds is transmitted in an
accurate and efficient manner.
This final rule makes it an unfair
practice for carriers that did not provide
the paid for ancillary service to fail to
timely inform the collecting carrier or,
if a ticket agent collected the fee, the last
operating carrier, that the service was
not provided. The failure to provide in
a timely manner information about
ancillary services that have been paid
for but not provided pauses the refund
process and causes substantial harm to
consumers by extending the timeline
under which they are expected to
receive the money they are entitled to.
This harm is not reasonably avoidable
by consumers as they have no control
over how quickly this information is
relayed which is what starts the refund
process. The Department also sees no
benefits to consumers and competition
from this conduct. Without this
requirement, money that is owed to
consumers may be kept by others
indefinitely, which in turn harms
consumers and competition by
penalizing good customer service and
rewarding dilatory behavior.
IV. Providing Travel Vouchers or
Credits to Passengers Due to Concerns
Related to a Serious Communicable
Disease
1. Statutory Authorities
The NPRM: The Department proposed
this rulemaking pursuant to the
authority set forth in 49 U.S.C. 41712 to
take action to address unfair or
deceptive practices or unfair methods of
competition by air carriers, foreign air
carriers, or ticket agents. The
Department also relied on its authority
in 49 U.S.C. 41702 to require air carriers
to provide safe and adequate service in
interstate air transportation. The
Department noted that 49 U.S.C.
40101(a) directs the Department in
carrying out aviation economic
programs, including issuing regulations
under 49 U.S.C. 41702 and 41712, to
consider certain enumerated factors as
being in the public interest and
consistent with public convenience and
necessity. These factors include ‘‘the
availability of a variety of adequate,
economic, efficient, and low-priced
services without unreasonable
discrimination or unfair or deceptive
practices’’ and ‘‘preventing unfair,
deceptive, predatory, or anticompetitive
practices in air transportation,’’ as well
as ‘‘assigning and maintaining safety as
the highest priority in air commerce.’’ In
issuing the NPRM, the Department also
discussed the Airline Deregulation Act
of 1978 (ADA) and noted that the ADA
liberalized airlines’ ability to freely
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price air travel products based on,
among other things, consumer demand,
and how airlines today offer a ‘‘nonrefundable’’ ticket booking class that
restricts passengers’ ability to change or
cancel the reserved flights in exchange
for a lower price than tickets with more
flexibilities for consumers.
Regarding the authority under 49
U.S.C. 41712, the Department stated its
tentative position that it is an ‘‘unfair
practice’’ 76 by an airline or a ticket
agent to not provide non-expiring travel
credits or vouchers to consumers who
are restricted or prohibited from
traveling by a governmental entity due
to a serious communicable disease (e.g.,
as a result of a stay at home order, entry
restriction, or border closure) or are
advised by a medical professional or
determine consistent with public health
guidance (e.g., CDC guidance) not to
travel to protect themselves or others
from a serious communicable disease.
The Department articulated that
consumers are substantially harmed
when they pay money for a service that
they are unable to use because they
were directed or advised by
governmental entities or medical
professionals or determine consistent
with public health guidance not to
travel to protect themselves or others
from a serious communicable disease,
and the airline or ticket agent does not
provide a non-expiring credit or
voucher or a refund. The Department
pointed out that this substantial harm is
not reasonably avoidable because the
only way to avoid it is to disregard
public health guidance or direction from
governmental entities or medical
professionals not to travel and risk
inflicting serious health consequences
on themselves or others. The
Department added that the tangible and
significant harm to consumers of losing
the entire value of their ticket is not
outweighed by potential benefits to
consumers or competition. The
Department expressed concern that, to
avoid financial loss, consumers who
have or may have contracted a serious
communicable disease may choose to
travel even when they have been
advised not to travel, which is not in the
public interest.
The Department further stated that
aside from enhanced protection of
consumers’ financial interests, it
believes that a regulation providing
protection to non-refundable ticket
holders who are unable to travel by air
76 A practice is ‘‘unfair’’ to consumers if it causes
or is likely to cause substantial injury, which is not
reasonably avoidable, and the harm is not
outweighed by benefits to consumers or
competition. Proof of intent is not necessary to
establish unfairness. 14 CFR 399.79.
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due to reasonable concerns related to a
serious communicable disease is needed
to promote and maintain a safe and
adequate aviation transportation system.
Citing 49 U.S.C. 41702, which requires
U.S. carriers to provide safe and
adequate interstate air transportation,
and 49 U.S.C. 40101(a), which directs
the Department to consider certain
enumerated factors including ‘‘assigning
and maintaining safety as the highest
priority in air commerce’’ in carrying
out aviation economic programs, the
Department asserted that the proposals
would encourage certain consumers to
postpone travel and avoid potential
harm to themselves and others in the
aviation system. The Department sought
comments on whether requiring airlines
and ticket agents to issue travel credits
or vouchers to non-refundable ticket
holders in these situations and refunds
when entities receive government
assistance is an appropriate way for the
Department to promote safe and
adequate air transportation.
Comments Received: Airline
commenters stated that the NPRM failed
to establish legal justification for the
proposals relating to communicable
diseases. A4A, RAA, IATA, AAPA, and
Air Canada argued that the proposals
interfere with airlines’ tiered fare
structure and threaten ‘‘the availability
of a variety of adequate, economic,
efficient, and low-priced service’’ and
therefore, are inconsistent with the ADA
and section 40101. They added that the
proposals will result in a smaller pricing
gap between refundable fares and nonrefundable fares, with tickets priced
closer to the higher fare group,
decreasing load factors, and impacting
the commercial viability of marginal
routes and remote markets. A4A and
IATA commented that it is important to
maintain non-refundable fares because
they increase access to air travel by
providing the least expensive form of
travel with a trade-off that consumers
who choose this option may not be able
to change or cancel the tickets. Air
Canada commented that the proposals
violate the pricing freedom principle set
forth in the U.S.—Canada bilateral
agreement.
A4A argued that any consumer harm
stated in the Department’s analysis for
‘‘unfair’’ practice can be mitigated by
readily available market solutions such
as travel insurance, refundable tickets,
or airlines waiving change fees during a
public health emergency. Similarly, two
ticket agent representatives, ABTA and
ASTA, commented that they oppose the
proposal because the harm that the
proposal is intending to address can be
prevented by purchasing insurance or
refundable tickets and is therefore
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reasonably avoidable by consumers.
Furthermore, on the analysis for
‘‘unfair’’ practice, A4A contended that
any harm to consumers during a public
health emergency is not caused by a
‘‘practice’’ by a carrier or a ticket agent.
A4A also commented that the asserted
authorities under sections 41712 and
41702 contradict the conclusion
included in the Regulatory Impact
Analysis (RIA) for the NPRM that states
the proposals would not decrease the
spread of a serious communicable
disease by a measurable amount. Lastly,
A4A commented that the proposal on
travel credits or vouchers is inconsistent
with the Federal Trade Commission
(FTC) and agency practices of other
modes of transportation and other
industries.
FlyersRights commented that the
Department has the clear authority and
responsibility to promulgate the
pandemic related provisions to ensure
airlines ‘‘provide safe and adequate
interstate air transportation.’’ It stated
that the proposals would ensure any
passenger who has a serious
communicable disease, who is
complying with government orders
pertaining to pandemics, or who is
following the advice of governmental
health and safety agencies, is able to
cancel or change their flight reservations
through non-expiring travel credits,
releasing airlines from their obligation
to transport the passengers during a
pandemic or when the passengers are
contagious. FlyersRights further argued
that the Department also has the clear
authority to determine it is an unfair or
deceptive practice for airlines to deny
refunds or non-expiring credits to
passengers who have COVID–19 or
COVID–19 symptoms, who have had
immediate exposure to someone with
COVID–19, or who have health
conditions or fears that made it unsafe
to fly on planes or congregate at
airports.
Regarding airlines’ argument that the
proposal will circumvent the ‘‘nonrefundable’’ feature of the ticket booking
class and result in price increases,
FlyersRights argued that in their view
non-refundable tickets do not provide a
cheaper alternative for passengers.
Regarding airlines’ rationale that
enforcing the ‘‘non-refundable’’ feature
provides needed certainty that
confirmed passengers will actually take
the flights and reduces the risk of
airlines being unable to sell empty seats
closer to flight departure, which in turn
allows airlines to keep price low,
FlyersRights commented that the same
rationale can be applied to passengers
when their flights are cancelled or
changed by airlines closer to departure
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date, at which point passengers are
likely to pay a premium for alternative
transportation. According to
FlyersRights, the airlines’ rationale will
result in the conclusion that passengers
having their flights cancelled or
significantly changed by airlines should
receive a premium of the ticket price in
addition to refunds.
U.S. Travel Association commented
that the proposals relating to serious
communicable disease are problematic
because they are overly broad,
ambiguous, subjective, and outside of
DOT authority. USTOA also opposed
the proposals and argued that the
circumstances triggering the proposed
requirements are beyond airlines’
control and the Department fails to
explain why not complying with the
proposed requirements is an unfair or
deceptive practice. It also supported the
airlines’ argument that there are other
solutions for consumers such as travel
insurance or higher-priced fares with
more flexibility. It stated that the RIA
acknowledges that the proposals would
not be likely to reduce the spread of
disease, therefore weakening the
argument for authority under section
41702. U.S. Chamber of Commerce
stated that the proposals are overly
broad and subject to abuse and the
Department should require vouchers or
credits to be issued only when there is
a public health emergency that inhibits
travel.
DOT Responses: The Department has
carefully considered the comments by
stakeholders regarding the Department’s
stated authorities for imposing
requirements to protect consumers
whose air travel plans are affected by a
serious communicable disease. We have
reached the conclusion that such
protections are consistent with the
Department’s authority to prohibit
unfair or deceptive practices in air
transportation and are necessary to
ensure consumers are treated fairly
when unexpected interruptions arising
from a serious communicable disease
result in them being unable to travel by
air or hesitant to travel by air because
traveling would pose potential harm to
themselves or others. The Department
has further concluded that such
protections will contribute to the
Department’s mission in ensuring safe
and adequate interstate air
transportation through economic
regulations and will not interfere with
airlines’ freedom of pricing as provided
by the ADA and bilateral agreements
between the United States and other
jurisdictions.
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A. Unfair Practice
Airline commenters do not dispute
that consumers suffer a harm if they do
not receive travel credits or vouchers
when they are unable to travel due to a
serious communicable disease. Instead,
airline commenters contended that the
Department failed to demonstrate that
not providing travel credits or vouchers
to consumers is an ‘‘unfair practice’’
pursuant to 49 U.S.C. 41712 because: (1)
the consumer harm articulated in the
NPRM is the result of a communicable
disease outbreak and is not caused by
the ‘‘practices’’ of carriers; (2) the harm
is avoidable by consumers through the
purchase of travel insurance or
refundable tickets; and (3) the harm is
outweighed by countervailing benefits
to consumers or competition. For the
reasons described below, the
Department disagrees with these
assertions.
In the 2020 final rule 77 that codifies
the definition of ‘‘unfair’’ in 14 CFR
399.79, the Department also discussed
the meaning of the term ‘‘practice.’’
While that rule did not adopt a
definition for ‘‘practice,’’ it discussed
how the Department would determine if
an act or omission was a practice. To be
a ‘‘practice’’ in the aviation consumer
protection context, the conduct must
generally be more than a single incident,
however, ‘‘even a single incident may be
indicative of a practice if it reflects
company policy, practice, training, or
lack of training.’’ 78 A carrier policy of
not providing travel credits or vouchers
when consumers are unable to travel
due to a serious communicable disease
is a practice. The fact that the outbreak
of a serious communicable disease is
not the fault of a carrier does not make
carriers’ policies of not providing travel
credits or vouchers any less of a
practice.
The Department is not persuaded by
the argument by airlines and ticket
agents that the proposed requirements
ignore readily available market
solutions that could prevent the
consumer harm. While refundable
tickets and travel insurance are
intended to address uncertainty in
travel, the Department believes that it is
unreasonable to expect consumers to
purchase travel insurance or refundable
tickets to protect their money just in
case a pandemic occurs, or just in case
a government imposes a restriction or
prohibition in relation to a serious
communicable disease when a
pandemic has not been declared. Also,
some travel insurance policies do not
77 Final Rule, Defining Unfair Or Deceptive
Practices, 85 FR 78707, December 7, 2020.
78 See 85 FR 78707, 78710–78711 (Dec. 7, 2020).
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provide protection against cancellations
related to a pandemic. The Department
agrees that persons who purchase
airline tickets after a pandemic has been
declared should know the potential
risks of purchasing a non-refundable
ticket without travel insurance. These
consumers have the option to purchase
refundable tickets or appropriate travel
insurance to avoid financial loss should
they not be able to travel due to a
pandemic-related reason. For consumers
who are advised not to travel to protect
themselves during a public health
emergency or consumers who are
prohibited or required to be quarantined
for a substantial portion of their trip by
a governmental entity, the Department
in this final rule requires airlines to
provide travel credits and vouchers to
individuals who purchased tickets prior
to a public health emergency being
declared or, if there is no declaration of
a public health emergency, before the
government prohibition or restriction
for travel to that region. In addition, the
reason that the individuals are not
traveling must be because they want to
protect themselves from a serious
communicable disease that led to the
declaration of the public health
emergency or their travel is affected by
the government prohibition/restriction
related to a serious communicable
disease.
With respect to consumers who have
or are likely to have contracted a serious
communicable disease, the Department
requires that airlines provide travel
credits or vouchers to them regardless of
whether their travel is during a public
health emergency and regardless of
when they purchased their tickets. It
would not be reasonable to expect a
consumer to purchase a refundable
ticket or travel insurance to ensure that
his or her financial interests are
protected in case the consumer
contracts a serious communicable
disease when a public health emergency
has not been declared. A consumer
could not reasonably avoid the harm of
financial loss under those circumstances
because the consumer likely would not
even think of conducting a risk
assessment of contracting a serious
communicable disease when a public
health emergency has not been declared.
For a consumer who purchased the
ticket while a public health emergency
is ongoing, the Department believes that
this individual could have done a risk
assessment and decided to purchase
travel insurance or a refundable ticket if
the individual wished to not risk
financial harm. This individual
traveling on a flight to avoid financial
harm, however, will cause or is likely to
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cause substantial harm to the health of
the other passengers on the flight. These
other passengers are not reasonably able
to avoid this harm as they have no
control over this individual’s actions
and whether the airline seats them in
close proximity to this individual. The
Department believes that airlines not
providing an incentive for the infected
consumer to postpone travel is likely to
cause significant harm to other
passengers on the same flight by
substantially increasing the likelihood
of these passengers being exposed to the
disease and infected during the flight
and such harm cannot be reasonably
avoided by these passengers as they are
likely to have no knowledge about them
being seated in a close proximity to an
infected passenger. This harm is not
outweighed by benefits to consumers or
competition as suggested by airlines.
The Department is of the view that the
requirement to provide travel credits or
vouchers would not result in the
elimination of nonrefundable fares or in
distorting the difference between a
refundable and non-refundable fare as
some commenters have suggested given
that a public health emergency affecting
travel to, within, and from the United
States on a large scale is infrequent and
this requirement only applies to
consumers who purchased tickets prior
to a public health emergency and are
unable or advised not to travel during a
public health emergency. Further, not
providing vouchers and credits to
consumers who are advised not to travel
during a pandemic could result in some
consumers risking their health or the
health of others to avoid financial loss,
which is not in the public interest. The
Department doesn’t believe there would
be any benefit to consumers or
competition among airlines in infected
or potentially infected travelers possibly
choosing to travel by air and infecting
other passengers.
B. Assertion of Inconsistency With FTC
Policies
Regarding A4A’s comment that the
proposals relating to serious
communicable diseases are inconsistent
with the policies of the FTC, the
practices of other modes of
transportation, other segments of the
travel industry, or other industries, the
Department notes that its unfair or
deceptive practices regulations are
modeled on FTC’s regulations and
policies. To the extent that there are
differences between DOT and FTC
regulations, the Department notes that
when determining its own regulations
and policies, it routinely considers,
among other things, the unique
characteristics of the aviation
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environment and context as well as any
problematic areas, as reflected by
consumer complaints, for which a
regulatory remedy should be
considered. In this instance, the
Department has considered the large
number of consumer complaints it
received during the COVID–19
pandemic regarding the hardships
consumers experienced when
requesting credits from airlines so they
could postpone travel. These hardships
include airlines’ refusal to issue credits
or imposing limitations on the credits
that consumers view as unreasonable. In
the Department’s view, these complaints
are clear evidence that a regulation
pursuant to the Department’s authority
is needed. While the Department views
consistency among Federal consumer
protection regulations as likely to
benefit consumers by reducing
confusion, the Department also
appreciates the importance of
regulations tailored to each regulated
industry.
C. Airline Deregulation Act
The Department disagrees with the
comments that a requirement for
airlines to provide travel credits or
vouchers for passengers unable to travel
due to a serious communicable disease
is inconsistent with the Airline
Deregulation Act of 1978 and 49 U.S.C.
40101(a). These commenters argue that
the proposals interfere with airlines’
freedom of pricing, including the
freedom of offering tiered fare structure
that incorporates different pricing
reflecting the levels of flexibilities for
consumers to cancel or change tickets.
In essence, the commenters argue that
the proposals will largely require more
flexibility for non-refundable tickets,
blurring the lines between refundable
fares and non-refundable fares, resulting
in higher prices for all consumers and
reduced load factors that also, in some
cases, impact the commercial viability
of small and remote markets. IATA and
A4A also note, in their substantive
comments on the Regulatory Impact
Analysis for the proposed rule, that the
proposal to require travel credits and
vouchers may result in airlines
eliminating basic economy fares if
airlines can’t enforce basic economy
change restrictions.
First and foremost, the proposals that
we are finalizing here do not affect the
restrictions applicable to nonrefundable tickets in most cases outside
of the context of a serious
communicable disease outbreak, such as
the COVID–19 pandemic. The
requirements protecting consumers who
are prohibited or restricted from travel
by a government order or consumers
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who are advised not to travel during a
public health emergency to protect
themselves apply only to very specific
cases in which non-refundable ticket
holders are impacted by an
unforeseeable event relating to a serious
communicable disease and, as the result
of the impact of the event, consumers
are either unable or advised not to
travel. Further, the Department is
revising the proposal to enhance
measures airlines and ticket agents may
adopt to prevent fraud and abuse. For
similar reasons, the Department
disagrees with Air Canada’s comment
that the proposals violate the pricing
freedom principle set forth in the
bilateral aviation agreement between the
United States and Canada. Airlines can
fully comply with the consumer
protection requirements finalized in this
rule and continue to exercise freedom of
pricing and offer a variety of air travel
products, including non-refundable
fares with lower prices and more
restrictions, to meet the market
demands for adequate, economic, and
efficient air transportation services.
D. Safe and Adequate Interstate Air
Transportation
With regard to the application of the
legal authority under 49 U.S.C. 41702,
which requires air carriers to provide
safe and adequate interstate air
transportation, airline and ticket agent
commenters argue that the RIA prepared
by the Department concludes that the
proposals would not decrease the
spread of a serious communicable
disease by a measurable amount. The
commenters state that the RIA
conclusion contradicts the NPRM’s
stated purpose of ensuring safe and
adequate interstate air transportation.
We disagree. The Department
acknowledges that the RIA
accompanying the NPRM stated that the
proposals would not have decreased the
spread of serious communicable disease
by a measurable amount. In the RIA
accompanying this final rule, the
Department estimates that 0.7% of
COVID–19 infections were transmitted
on aircraft.79 The Department continues
to believe that the requirement to
provide travel credits or vouchers to
consumers who have or are likely to
have contracted a serious communicable
disease and would pose a direct threat
to the health of others will reduce the
likelihood of passengers contracting
communicable diseases in air travel. As
stated in the NPRM, it is the
79 See, Barnett, A., Fleming, K. Covid-19 Infection
Risk on US Domestic Airlines. July 2, 2022, https://
link.springer.com/article/10.1007/s10729-02209603-6#Sec3.
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Department’s understanding that
airlines in general would allow and
prefer that a passenger with a serious
communicable disease in the contagious
stage not travel, and airlines would
likely grant an exception from the
tickets’ non-refundability to allow the
passenger to reschedule travel. The
Department believes the low COVID–19
transmission rate was influenced by
airlines’ actions of allowing passengers
to reschedule travel. By making the
airlines’ voluntary action mandatory,
this rule would further ensure safe and
adequate interstate air transportation as
passengers would be assured that they
can reschedule travel for when they are
well without facing financial loss.
2. Need for Rulemaking
The NPRM: In the NPRM, the
Department stated its view that a
regulation is needed to ensure
consumers are consistently treated fairly
when they are unable or advised not to
travel due to reasonable concerns
related to a serious communicable
disease. The Department further
explained that the Department’s existing
regulation does not require airlines to
issue refunds or travel credits to
passengers holding non-refundable
tickets when the airline operated the
flight and the passengers do not travel,
regardless of the reason that the
passenger does not travel. The
Department described its goal as
protecting consumers’ financial interests
when the disruptions to their travel
plans were caused by public health
concerns beyond their control. The
Department also shared that it expects
that the financial protection would
further incentivize individuals to
postpone travel when they are advised
by a medical professional or determine
consistent with public health guidance
not to travel because they have or may
have a serious communicable disease
that would pose a threat to others. The
Department described how the COVID–
19 pandemic imposed unprecedented
challenges on air travelers when
numerous consumers were caught off
guard by the sudden events of
government travel restrictions or the
widespread incidence of a serious
communicable disease that impacted
their travel plans. The Department
expressed its view that the need for
regulatory intervention arises when,
despite airlines voluntarily offering
travel credits or vouchers in situations
where a passenger states that he or she
was unable to travel or advised not to
travel due to COVID–19 related reasons,
consumers were frustrated by the short
validity periods of the credits and
vouchers, the strict conditions imposed
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on them, and the difficulties to obtain
and redeem them.
The Department stated its view that
consumers are acting reasonably when
they decide to not travel because they
have or may have contracted a serious
communicable disease that may pose
risks to others during air travel, or
because their own health conditions are
such that traveling during a public
health emergency may put them at
higher risk of harm to their health.
Further, the Department pointed out
that consumers may be unable to travel
due to government travel restrictions
related to the pandemic. In the NPRM,
the Department stated its tentative
position that a regulation is needed to
ensure consumers are consistently
treated fairly when they are unable or
advised not to travel due to reasonable
concerns related to a serious
communicable disease. It further stated
that a regulation defining the baseline of
accommodations to non-refundable
ticket holders and identifying the
specific circumstances that would give
rise to the need to accommodate
passengers when they cancel or
postpone their travel would greatly
enhance consumer protection. The
Department pointed out that without
such requirements, airlines and ticket
agents may have different
interpretations of what types of events
would be sufficient to justify a deviation
from the non-refundable terms of a
ticket, and such different application of
interpretations may result in increased
consumer confusion and frustration, as
well as increased administrative cost to
airlines and ticket agents for handling
customer service requests and
complaints from consumers with
different perspectives.
Comments Received: Most ticket agent
representatives argued that the
proposals may create tremendous
financial burden and disincentivize
airlines from offering non-refundable
fares. Global Business Travel
Association argued that airlines should
have the flexibility to deal with public
health emergency related issues. It
further added that the Department,
airlines, and ticket agents lack public
health expertise to navigate the
proposals.
FlyersRights asserted that without the
proposed protections, consumers would
be forced to forfeit the money they paid
for the tickets or to take a flight against
the orders, recommendations, or
medical advice of government health
agencies or medical professionals,
resulting in some passengers making the
financial decisions to fly while sick,
contagious, or immunocompromised, or
with the strong suspicion of being sick.
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National Consumers League expressed
its view that the Department should
require airlines and ticket agents to
provide travel credits or vouchers to
consumers who cannot fly due to
health-related reasons, regardless of
public health emergency declarations,
public health agency guidance, or
serious risk of communicable disease. It
commented that developing a health
condition that would make air travel
dangerous to the passenger or others
after purchasing the airline ticket is
something beyond the passenger’s
control. It suggested that it is in the
public interest for the passenger to be
protected from losing the ticket
investment. Travelers United also
supported a broader ‘‘airline sick
passenger rule’’ that would require
airlines to allow passengers with
legitimate illnesses to postpone flights
without additional costs. Travelers
United provided examples of inflight
disease outbreaks and argues that
airlines charging change fees for sick
passengers to postpone travel could
result in additional cost to airlines.
U.S. Travel Association asserted that
the proposals affect passengers who
have bought travel insurance policies
because they would have to wait until
the credits or vouchers expire before
they can be reimbursed by the insurance
carrier, and many passengers would not
prefer vouchers. It further stated that the
proposals introduce fraud risk because
some consumers may attempt to file
insurance claims and also receive
credits or vouchers. Travel Tech
supported a rulemaking to address
consumer protection in the context of
communicable disease but argued that
the requirements should exempt ticket
agents.
DOT Responses: The Department
continues to be of the view that a
regulation is needed to ensure
consumers are consistently treated fairly
when they are unable or advised not to
travel due to reasonable concerns
related to a serious communicable
disease. Approximately 20% of the
refund complaints that the Department
received from January 1, 2020 to June
30, 2021, involved instances in which
passengers with non-refundable tickets
chose not to travel because of
considerations related to the COVID–19
pandemic.80 As for U.S. Travel
Association’s comment that insurance
companies require consumers to wait
until credits or vouchers expire before
consumers can be reimbursed, the
Department anticipates that insurance
companies will offer a variety of
80 See Report to the White House Competition
Council, p. 11.
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products that meet consumers’ different
needs to stay competitive after the final
rule takes effect. The Department also
acknowledges the concerns by several
consumer rights advocacy groups
regarding the need for a broader
regulation requiring airlines to allow
passengers with any legitimate illness to
postpone travel without additional cost.
Because the NPRM’s focus is on the
three categories of consumers affected
by a serious communicable disease,
however, and the public did not have
the opportunity to fully consider and
comment on this broader issue, we
decline to address it here.
3. Covered Entities
The NPRM: The Department proposed
to require the entity that ‘‘sold’’ an
airline ticket (i.e., the entity identified
in the consumer’s financial statement,
such as credit card statement), whether
a carrier or a ticket agent, provide travel
credits or vouchers to eligible
consumers affected by a serious
communicable disease. The Department
noted, however, that it is open to
suggestions on whether the entity
obligated to issue credits or vouchers
should be determined based on other
criteria and solicited comment on
whether airlines should solely be
responsible for issuing credits or
vouchers because they are the direct
providers of the air transportation paid
for by consumers and the ultimate
recipients of the consumer funds. The
Department asked how it can best
ensure that credits and vouchers issued
by an airline is prompt if a ticket agent
is the entity that ‘‘sold’’ the ticket. The
Department inquired about what role
and responsibility it should place on
ticket agents that sold airline tickets to
facilitate the issuance of credits or
vouchers by airlines when the ticket
agents are the principals of the
transactions.
Comments Received: A4A supported
the proposal to require ticket agents to
provide travel credits valid for use
within the ticket agent’s system, arguing
that ticket agents cannot issue credits
valid for use on a carrier. National
Consumers League supported the
Department’s proposal as applicable to
airlines and ticket agents. Ticket agent
representatives expressed concerns
about applying the proposals to ticket
agents. USTOA stated that the
Department did not consider the
training and administrative costs for
ticket agents to screen passenger
documentation. It further stated that
such a requirement has never been
placed on ticket agents, only on airlines.
Travel Management Coalition
commented that airlines should issue
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credits to eligible travelers, but that for
business travelers, the corporate clients
would not want the travelers to get
credits that can be used for their
personal travel. It suggested that ticket
agents should be involved in those
situations for the issuance and
management of credits. Travel Tech
provided the following reasons for
which it believes that the proposals
should not apply to ticket agents: (1)
airlines should be the origination of the
credits that are airline instruments
designed for future travel on the airline
on which the consumer originally
scheduled to travel, even when the
ticket agents are the merchants of
record; (2) airline fare rules dictate the
conditions of the credits; (3) ticket
agents may have assisted the issuance of
credits during the COVID–19 pandemic
according to the instructions provided
by airlines; requiring ticket agents to
issue their own credits is
administratively wasteful because ticket
agents will have to work with each
airline and create their own credits; and
(4) requiring ticket agents to issue
credits can be confusing to consumers
because there could be situations in
which the rule empowers both airlines
and ticket agents to evaluate consumer
documentation, which may create
inconsistency.
DOT Responses: The Department is
requiring that airlines are the sole
entities responsible for issuing travel
credits or vouchers to eligible
consumers whose travel is affected by a
serious communicable disease, even if
the original tickets were purchased from
a ticket agent who acted as the merchant
of record. The comments from airlines
and ticket agents noted that ticket agents
cannot issue credits valid for future
travel with a carrier. The Department
also agrees with the comment that it is
a significant burden to create and
manage their own credits or voucher
systems including coordinating with
various airlines to ensure that the
credits or vouchers are usable. The
Department considers this burden to be
particularly substantial for small ticket
agents. In addition, like Travel Tech, the
Department believes having both
airlines and ticket agents issue travel
credits and vouchers could further
increase the likelihood of consumer
confusion. Airlines that are the
merchants of record for the ticket
transactions will be responsible for
issuing the travel credits or vouchers to
eligible consumers. When a ticket agent
is the merchant of record, each
operating carrier is responsible for
issuing a travel credit or voucher to the
consumer. Under this final rule,
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although a fee-for-service carrier
operating the flight is ultimately
responsible for issuing travel credits or
vouchers for ticket agent-transacted
itineraries, it is permissible for the
carrier to rely on other entities, such as
their marketing codeshare partner, to
process and issue travel credits or
vouchers to consumers on its behalf.
This does not mean that ticket agents
don’t have a role to play in the issuance
of travel credits or vouchers. The
Department encourages ticket agents to
assist airlines by providing information
that airlines may need to complete the
issuance of the travel credit or voucher,
such as consumers’ contact information
or the price paid by consumers for the
original tickets.
4. Definition of Serious Communicable
Disease
The NPRM: The Department proposed
to define a serious communicable
disease to mean a communicable
disease as defined in 42 CFR 70.1 81 that
has serious consequences and can be
easily transmitted by casual contact in
an aircraft cabin environment. The
Department did not propose to include
a list of communicable diseases under
the definition. Instead, it stated that the
analysis of whether a communicable
disease is ‘‘serious’’ under the NPRM is
similar to the analysis of ‘‘direct threat’’
under the Department’s Air Carrier
Access Act regulation,82 which
considers the significance of the
consequences of a communicable
disease and the degree to which it can
be readily transmitted by casual contact
in an aircraft cabin environment. The
Department further provided examples
of diseases that do and do not meet the
two-prong analysis under the proposed
definition—readily transmissible in the
aircraft cabin and likely to result in
significant health consequences. For
example, the Department explained that
the common cold is readily
transmissible in an aircraft cabin
environment but does not have severe
health consequences. AIDS has serious
health consequences but is not readily
transmissible in an aircraft cabin
environment. Both the common cold
and AIDS would not be considered
serious communicable diseases. SARS is
readily transmissible in an aircraft cabin
environment and has severe health
consequences. SARS would be
81 42 CFR 70.1 states ‘‘Communicable diseases
means illnesses due to infectious agents or their
toxic products, which may be transmitted from a
reservoir to a susceptible host either directly as
from an infected person or animal or indirectly
through the agency of an intermediate plant or
animal host, vector, or the inanimate environment.’’
82 See 14 CFR 382.21(b)(2).
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considered a serious communicable
disease. The Department asked whether
it is sufficiently clear to the regulated
entities and the public as to which types
of communicable diseases would and
would not be considered serious.
Comments Received: Airline
commenters were concerned about the
proposed definition for ‘‘serious
communicable disease,’’ stating it uses
terms that are too vague. A4A asked for
more clarity on the terms ‘‘easily
transmissible in the aircraft cabin’’ and
‘‘casual contact.’’ IATA further
commented that the term ‘‘serious
consequence’’ in the analysis for serious
communicable disease does not
consider that the consequence of a
disease could differ from person to
person.
Airline commenters also disputed
statements in the NPRM that COVID–19
is easily transmissible in aircraft cabins.
In written comments, IATA and A4A
separately asserted that the NPRM’s
claim that COVID–19 is easily
transmissible in aircraft cabin is
inconsistent with the research that
shows it is not highly transmissible in
aircraft cabin due to the filtration and
air circulation system. During the March
21, 2023 public hearing, however, an
IATA Medical Advisor suggested that
the final rule should highlight only
those diseases that medical consensus
suggests is likely to be spread by
aerosols or droplets in an aircraft
environment as ‘‘serious communicable
diseases,’’ which he stated is likely to
include only respiratory infections that
are highly contagious such as measles or
COVID–19 and perhaps in unusual
cases, gastrointestinal ones such as
Norovirus. He opined that any medical
assessment even by medical
professionals needs to have the
information on what is a ‘‘serious
communicable disease’’ to adequately
determine the risk onboard. The IATA
Medical Advisor also pointed out that
certain diseases that could be
considered communicable in other
locations may be less threatening in
aircraft environment due to cabin
conditioning flow rates, filtration
systems, and other aircraft
characteristics making transmission
significantly less likely than in other
public gathering locations.
DOT Responses: The Department is
adopting the proposed definition for
‘‘serious communicable disease,’’ which
means a communicable disease as
defined in 42 CFR 70.1 that has serious
health consequences and can be easily
transmitted by casual contact in an
aircraft cabin environment. The
Department declines to adopt a
definition with an exclusive list of
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communicable diseases or highlight
only those communicable diseases that
are spread by aerosols or droplets in an
aircraft environment because the
Department does not believe a list based
on currently known diseases would
serve its purpose in the long term. The
definition of serious communicable
disease continues to include the
examples provided in the NPRM to
demonstrate that a ‘‘serious
communicable disease’’ must meet both
prongs of the definition—‘‘serious
health consequence’’ and ‘‘can be easily
transmitted by casual contact in an
aircraft cabin environment.’’
The Department acknowledges that
the consequence of contracting a
communicable disease on an individual
may vary depending on the individual’s
health condition. ‘‘Serious health
consequence’’ is referring to the health
of an average person rather than health
of each individual. For example, the
average person would not have serious
health consequences from a common
cold, though it can be life threatening
for people with weak immune systems,
such as a cancer patient undergoing
treatment.
As for the meaning of ‘‘can be easily
transmitted by casual contact in an
aircraft cabin environment,’’ the
Department has reviewed public health
guidance issued by CDC and WHO,
which find that although modern
aircraft ventilation and air filtration
systems do play an important role in
reducing the likelihood of disease
transmissions, transmissions of
infection may occur 83 between
passengers who are seated in the same
area of an aircraft, usually by contact
with infectious droplets (as a result of
the infected individual coughing or
sneezing) or by touch (direct contact or
touching communal surfaces that other
passengers touch).84 Accordingly, the
Department determines that a
communicable disease that ‘‘can be
easily transmitted by casual contact in
the aircraft cabin environment’’ to mean
a disease that is easily spread to others
in an aircraft cabin through general
activities of passengers such as sitting
next to someone, shaking hands, talking
to someone, or touching communal
surfaces.
83 A study led by MIT scholars estimated that
between June 2020 and February 2021, the
probability of contracting COVID–19 onboard an
average domestic flight was about 1 in 2000. See fn.
75, supra.
84 See, CDC Air Travel Yellow Book 2024, https://
wwwnc.cdc.gov/travel/yellowbook/2024/air-landsea/air-travel#inflight; World Health Organization
Air Travel Advice, https://www.who.int/newsroom/questions-and-answers/item/air-travel-advice.
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5. Passengers Who Are Advised by a
Medical Professional Not To Travel To
Protect Themselves During a Public
Health Emergency
The NPRM: The Department proposed
that, when there is a public health
emergency, airlines and ticket agents
must provide non-expiring travel credits
or vouchers to non-refundable ticket
holders who are advised by a medical
professional or determine consistent
with public health guidance issued by
the CDC, comparable agencies, or WHO
not to travel by air to protect themselves
from a serious communicable disease.
Under this NPRM, to be eligible for the
travel credits or vouchers, the nonrefundable ticket holder must have
booked the ticket before the beginning
of the public health emergency and the
travel date must be during the public
health emergency. The Department
proposed to define ‘‘public health
emergency’’ based on the U.S.
Department of Health and Human
Services (HHS) regulation addressing
measures taken by CDC to quarantine or
otherwise prevent the spread of
communicable diseases, 42 CFR 70.1.85
The Department sought comments
regarding whether the proposal is
reasonable with respect to the
passengers protected, asking whether
the protection should be extended to
passengers who purchased their tickets
after the public health emergency is
declared but did not develop the
underlying health condition until after
the tickets are purchased. The
Department also sought comments
regarding whether it is reasonable to
extend the proposed requirements to
passengers who sought to defer travel
because they are the caregivers of
85 The definition for public health emergency in
42 CFR 70.1 is: (1) Any communicable disease
event as determined by the Director with either
documented or significant potential for regional,
national, or international communicable disease
spread or that is highly likely to cause death or
serious illness if not properly controlled; or (2) Any
communicable disease event described in a
declaration by the Secretary pursuant to 319(a) of
the Public Health Service Act (42 U.S.C. 247d (a));
or (3) Any communicable disease event the
occurrence of which is notified to the World Health
Organization, in accordance with Articles 6 and 7
of the International Health Regulations, as one that
may constitute a Public Health Emergency of
International Concern; or (4) Any communicable
disease event the occurrence of which is
determined by the Director-General of the World
Health Organization, in accordance with Article 12
of the International Health Regulations, to
constitute a Public Health Emergency of
International Concern; or (5) Any communicable
disease event for which the Director-General of the
World Health Organization, in accordance with
Articles 15 or 16 of the International Health
Regulations, has issued temporary or standing
recommendations for purposes of preventing or
promptly detecting the occurrence or reoccurrence
of the communicable disease.
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persons with a health condition and at
a higher risk, and passengers who
would have difficulty traveling alone
when their travel companion qualifies
for a voucher or refund. The Department
also asked whether there are obstacles
airlines and ticket agents faced when
some of them voluntarily provided
travel vouchers to consumers who
decided not to travel during the COVID–
19 pandemic. The Department also
solicited comment on whether
consumers experienced difficulties in
redeeming credits and vouchers issued
to them and what the Department
should consider in the proposed
regulation to address or resolve these
difficulties.
Comments Received: Airline
commenters stated that the proposal
includes vague and unclear terms and
subjective standards that will cause
substantial consumer and carrier
confusion. A4A commented that the
proposed definition for ‘‘public health
emergency’’ is too broad. It noted that
there are over 100 events during the past
five years that would qualify under the
definition. It further argued that there
needs to be a connection between a
passenger’s travel and the public health
emergency, and that an event in another
country should not be used to protect
domestic passengers. IATA argued that
governments around the world took
different approaches towards COVID–
19, from being very restrictive to
extremely permissive, but the NPRM
presupposes that all governments take a
uniform approach. Both A4A and IATA
also commented that more clarity is
needed on what are ‘‘comparable
agencies in other countries’’ that would
be qualified to issue the public health
guidance. AAPA opined that it is
difficult for airlines to verify the
authenticity of the documentation from
various governments that passengers
may provide airlines to prove their
eligibility for travel credits or vouchers.
Further, A4A and IATA commented that
the term ‘‘medical professional’’ is a
vague term that is not defined. A4A and
IATA both opposed the proposal to
allow passengers to ‘‘determine’’
whether they should travel. A4A argued
that this is a subjective standard and
IATA added that allowing passengers to
self-determine whether they should
travel based on public health guidance
is inconsistent with the rule text that
allows airlines to request medical
documentation.
A4A suggested and IATA supported
that: (1) the requirement cover only a
public health emergency that occurs in
the United States at a national level; (2)
eligible passengers must have purchased
their tickets before the public health
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emergency declaration; (3) the travel
must have been planned to occur during
the public health emergency; and (4) the
reason that an eligible passenger is not
traveling must be because of the public
health emergency. Similar to A4A, U.S.
Chamber of Commerce also suggested
that the Department should limit travel
credits or vouchers to medical situations
when there is a Public Health
Emergency and to situations that inhibit
travel (such as a prohibition by a
government entity). U.S. Chamber of
Commerce commented that the
Department’s proposal would be subject
to abuse by bad actors. SATA opposed
the proposal and stated that when
passengers holding non-refundable
tickets are not comfortable with
traveling and the flight is operated,
airlines offer higher fares with more
flexibilities and airlines should not be
obligated to issue refunds or credits.
Regarding the Department’s inquiry in
the NPRM on whether the credits or
vouchers protection should be extended
to passengers who are the caregivers of
persons with a health condition and at
a higher risk, and passengers who
would have difficulty traveling alone
when their travel companion qualifies
for a voucher, A4A opposed the
expansion of the proposal and argued
that including flight credits to caregivers
will exacerbate the potential for
mistakes, misunderstandings, and fraud
by introducing another undefined and
unclear mandate. IATA also opposed
the expansion of the credits to
caregivers. It further argued that
children should not be eligible for
credits based on the provision of a
credit to their adult companion because
parents concerned about such a
possibility can purchase travel
insurance. AAPA opposed the idea of
providing travel credits or vouchers to
passengers who are caregivers of
individuals with underlying health
conditions, arguing that this is too broad
a scope that would be open to fraud.
USTOA also opposed requiring credits
or voucher to be issued to caregivers of
persons with health conditions, either
though family relationship or
employment.
Many individual consumers
expressed their general support for the
proposals relating to serious
communicable diseases, including the
proposal to provide travel credits and
vouchers to passengers who do not
travel during a public health emergency
because of concerns about their health.
Consumer rights groups commented that
the proposals should be expanded to
cover medical situations beyond public
health emergency or communicable
diseases. The ACPAC voted to support
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the Department’s proposal to protect
travelers affected by a serious
communicable disease, including the
proposal to require airlines and ticket
agents to issue travel credits or vouchers
to passengers who purchased the airline
ticket before a public health emergency
was declared, the consumer is
scheduled to travel during the public
health emergency, and the consumer is
advised by a medical professional or
determines consistent with public
health guidance issued by CDC,
comparable agencies in other countries,
or the WHO not to travel by air to
protect himself or herself from a serious
communicable disease.86 At least one
individual commenter supported
providing regulatory protections for
caregivers.
DOT Responses: After reviewing and
carefully considering the comments, the
Department is requiring airlines to
provide travel credits or vouchers to
passengers who have been advised by
licensed treating medical professionals
not to travel during a public health
emergency to protect themselves from a
serious communicable disease. The
Department is not expanding this
requirement to provide travel credits
and vouchers to cover situations beyond
a public health emergency or serious
communicable diseases as suggested by
consumer groups. The Department
agrees with A4A and U.S. Chamber of
Commerce that the requirement for
travel credits or vouchers should be
limited to medical situations when there
is a public health emergency. Under this
rule, to be eligible for a travel credit or
voucher, the passenger must have
purchased the airline ticket before the
public health emergency was declared,
and the ticket must be for an itinerary
to, from, or within the United States that
involves traveling to or from a point
affected by the public health emergency
during the public health emergency.
The Department does not agree with
the suggestion from airlines to limit the
requirement to provide travel credits or
vouchers to only public health
emergencies that occur in the United
States because an outbreak of a serious
communicable disease in another
country can affect passengers traveling
between the United States and that
country. However, the Department
agrees that there needs to be a
connection between a passenger’s travel
and the public health emergency. For
example, a public health emergency
86 Among the four members of ACPAC, three
members voted in support of this recommendation
and the member representing airlines abstained,
stating that there are many terms in the proposal
that are not clear and may cause more passenger
confusion.
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relating to an outbreak of Ebola in
another country would be grounds for a
passenger to request a travel credit or
voucher only if the passenger’s planned
travel, as reflected in a single itinerary,
is between the United States and that
country. In that regard, if the passenger
booked two separate tickets, one from
the United States to a connecting third
country not subject to the public health
emergency, and the other from the third
country to the outbreak country, the
Department would not require airlines
to issue credits or vouchers based on the
passenger’s health-related concerns
about traveling to the outbreak country.
The Department is persuaded by
comments that its proposal to allow
individuals to self-determine consistent
with public health guidance whether to
travel to protect themselves from a
serious communicable disease is
subjective. Unless otherwise directed by
HHS, this rule allows airlines to require
medical documentation from passengers
who state that they do not wish to travel
during a public health emergency for a
medical reason to protect themselves.
An airline may not require passengers to
provide documentation from a medical
professional if HHS issues public health
guidance declaring that requiring such
medical documentation is not in the
public interest.
The Department further acknowledges
comments from industry seeking clarity
about the meaning of the terms
‘‘medical professional’’ and
‘‘comparable agencies in other
countries.’’ In this final rule, the term
‘‘medical professional,’’ is defined in
the regulation. The Department is
adopting a definition for the term
‘‘licensed treating medical professional’’
to mean an individual, including a
physician, a nurse practitioner, and a
physician’s assistant, who is licensed or
authorized under the law of a State or
territory in the United States or a
comparable jurisdiction in another
country to engage in the practice of
medicine, to diagnose or treat a patient
for a specific physical health condition
that is the reason for the passenger to
request a travel credit or voucher. The
Department is providing further
explanation of this definition in the
section that discusses medical
documentation. The Department no
longer uses the term ‘‘comparable
agencies in other countries’’ when
referencing public health guidance that
the consumers’ licensed treating
medical professionals may rely on or
reference when providing professional
opinions regarding whether the
consumers should travel because that
term is also subjective. In this final rule,
the Department states ‘‘consistent with
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public health guidance issued by the
Centers for Disease Control and
Prevention (CDC) or the World Health
Organization (WHO).’’
Regarding whether caregivers of highrisk passengers should be protected, the
Department is persuaded that extending
the requirement to provide travel credits
or vouchers to caregivers of people who
have health conditions that place them
at a higher risk of contracting a serious
communicable disease may increase the
risk of fraud. The Department also
agrees that the complexity of
appropriately defining this expanded
group and verifying their eligibility can
be burdensome for airlines. While not
expanding the scope of the rule to these
consumers, the Department encourages
carriers to provide good customer
service by offering maximum
flexibilities to consumers who request to
postpone their travel due to a genuine
concern about the health of their
families and others who are dependent
upon them for care.
6. Passengers Who Are Prohibited From
Travel or Required To Quarantine for a
Substantial Portion of Trip by
Government Entity
The NPRM: The Department proposed
to require airlines and ticket agents to
provide travel credits or vouchers to
ticket holders who are unable to travel
because of a U.S. (Federal, State, or
local) or foreign government restriction
or prohibition related to a serious
communicable disease regardless of
whether there is a public health
emergency. Examples of such
government restrictions or prohibitions
include government issued ‘‘stay at
home’’ orders, ‘‘shelter in place’’ orders,
or government-instituted border closure
or entry restrictions because of a serious
communicable disease for certain types
of passengers. The Department further
explained that under the proposal, the
requirement would cover passengers
who can travel under the government
order, but the restriction has rendered
the passenger’s travel ‘‘meaningless.’’
Passengers would not be entitled to a
travel credit or voucher if they simply
failed to exercise due diligence to
ensure that all conditions for travel
imposed by the governments of the
departure, transit, or arrival locations
are met (e.g., negative test result for a
communicable disease). The
Department solicited comments on
whether the proposed requirement for a
non-expiring voucher or credit strikes
the right balance given that the travel
restrictions are out of the airlines’ and
ticket agents’ control and the differential
economic impact of a refund mandate
versus a travel credit or voucher on
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airlines and ticket agents in these
circumstances.
Comments Received: Airlines in
general were concerned about the scope
of the proposal which, in their view, is
too broad and subjective, making it
difficult to determine whether a
passenger is eligible for a travel credit
or voucher. Spirit opposed the proposal,
stating that it shifts the risk of whether
a consumer can fly entirely to airlines
when the restriction is not the fault of
airlines or consumers. It commented
that there should be a reasonable
balance of risks between airlines and
passengers. A4A commented that the
proposal does not explicitly require that
a government order prevent the
passenger from traveling, instead, by
using the term ‘‘restriction’’ it implies
that passengers could be eligible for
credits even if they have partial
discretion to travel. Several airline
commenters argued that determining
whether a passenger is ‘‘unable to
travel’’ or the restriction renders travel
‘‘meaningless’’ requires a case-by-case
analysis looking into the purpose of
each passenger’s travel, subject to
different interpretations. They were also
concerned about significant resources
needed for airlines to determine
whether a passenger has exercised ‘‘due
diligence’’ to comply with each
jurisdiction’s travel requirements. Also,
airlines were concerned about the
proposal’s language that does not limit
the eligible travel to ‘‘air travel.’’ In that
regard, they argued that the Department
is burdening carries with obligations to
provide travel credits when the non-air
portion of the travel, not under the
carrier’s control, may be prohibited by
a government order.
A4A provided several suggestions on
how the proposal should be revised.
First, A4A suggested that the term
‘‘unable to travel’’ should be replaced by
the term ‘‘prohibited from travel by air.’’
Second, A4A recommended that the
Department should remove the
‘‘rendering travel meaningless’’ standard
from the regulation. Third, A4A asked
the Department to include an explicit
list of all scenarios that would
disqualify a passenger for receiving
travel credits. Fourth, A4A suggested
that carriers should be required to issue
travel credits only when the government
order directly and substantially impacts
the origination or destination of the
passenger’s itinerary. Over 1,500
individual consumers expressed their
general support for the proposed
protections for consumers affected by a
serious communicable disease.
Consumer rights advocacy groups did
not specifically comment on the
proposal of requiring airlines and ticket
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agents to issue travel credits or vouchers
to passengers who are unable to travel
due to a government restriction or
prohibition relating to a serious
communicable disease.
Among ticket agent’s representatives,
ASTA, DWHSA, Travel Tech, and
ABTA supported this proposal. ASTA
commented that consumers should be
provided credits or a voucher because
they are prevented from travel by
government actions and failing to so do
meets the standard for unfair practice.
USTOA stated that modifications of the
proposal are needed because ‘‘unable to
travel’’ is too broad and vague and the
term ‘‘prohibited from travel’’ should be
used instead. It also opposed the
inclusion of situations in which travel is
rendered ‘‘meaningless’’ because this
term is too subjective. GBTA
commented that the proposal is
enormously burdensome to airlines and
ticket agents because it would require
them to consider foreign government
orders and public health guidance when
determining passenger’s eligibility to
travel credits or vouchers, and also
consider the timing of these documents’
issuance relative to the ticket purchase
date and the travel date. The ACPAC
voted to support the Department’s
proposal to, regardless of whether there
is a public health emergency, require
airlines and ticket agents to provide
travel credits or vouchers to consumers
who are unable to travel because of a
U.S. (Federal, State or local) or foreign
government restriction or prohibition
(e.g., stay at home order, entry
restriction, or border closure) in relation
to a serious communicable disease that
is issued after the ticket purchase.87
DOT Responses: Having fully
considered the comments, the
Department has decided to adopt a final
rule largely along the lines set forth in
the NPRM, with a few changes to
address comments received from
airlines about the difficulty and cost in
determining which government
restrictions would render travel
‘‘meaningless’’ and whether a passenger
exercised ‘‘due diligence’’ to comply
with each jurisdiction’s travel
requirements. These changes also
further ensure the Department’s actions
are within its statutory authority. In this
final rule, the Department is requiring
airlines to provide travel credit or
vouchers to non-refundable ticket
holders who are prohibited from travel
or required to quarantine for a
87 Among the four members of ACPAC, three
members voted in support of this recommendation
and the member representing A4A voted against the
recommendation, stating that there are many terms
in the proposal that are not clear, and it will cause
more passenger confusion.
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substantial portion of the planned trip
by the U.S. or foreign government in
relation to a serious communicable
disease. The Department has decided to
replace the term ‘‘unable to travel’’ by
the term ‘‘prohibited from travel’’ and to
remove the ‘‘rendering travel
meaningless’’ standard as suggested by
airline commenters. In place of
‘‘rendering travel meaningless,’’ the
Department is specifying that the travel
restriction that would entitle a
consumer to a travel credit or voucher
is a mandatory quarantine for more than
50% of the length of the passenger’s
scheduled trip at the destination
(excluding travel dates) as shown on the
passenger’s itinerary. In addition, the
Department is limiting the requirement
for airlines to provide travel credits and
vouchers to consumers who purchased
the airline ticket before a public health
emergency affecting the passenger’s
origination or destination was declared
or, if there is no declaration of a public
health emergency, before the
government prohibition or restriction
for travel to or from the affected region
is imposed. Passengers cannot
reasonably avoid the harm of financial
loss under these circumstances because
they would have no reason to think
there would be a government
prohibition from travel or mandatory
quarantine requirement at the
passenger’s origination or destination in
relation to a serious communicable
disease when a public health emergency
has not been declared.
Beginning in January 2020,
governments all over the world began
taking various measures to try to curb
the spread of COVID–19, including
government-issued stay-at-home orders,
business closure orders, border entry
limits or quotas, quarantine
requirements for arrivals, and
restrictions or bans for commercial
flights from certain originations. Many
of these government orders impacted air
travelers directly by making travel
impossible through prohibitions from
travel or indirectly by severely limiting
the activities that travelers intended to
engage in at the destinations through
mandatory quarantines. Based on the
comments, it appears that all
stakeholders agree that passengers who
are banned or prohibited from travel by
air should be protected by the proposed
requirement. The Department does not
agree, however, that the scope of the
consumer protection requirement
should be limited to these passengers.
The proposal’s goal is to mitigate the
financial losses suffered by air travelers
during a communicable disease
outbreak so severe that it triggers drastic
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actions by governments to restrict the
movements of people. It is the
Department’s view that consumers who
bought their airline tickets before the
issuance of a public health emergency
or, if there is no declaration of a public
health emergency, before a government
order prohibiting travel or restricting
movement through mandatory
quarantines should have the ability to
retain the value they paid into the
airline tickets.
The Department acknowledges the
concerns about certain language used in
the NPRM that could be construed as
vague and subjective. As such, in
finalizing this proposal, we are
amending the rule text to provide more
clarity. Specifically, the term ‘‘unable to
travel’’ is replaced by ‘‘prohibited from
travel.’’ The Department notes that the
government order does not have to
prohibit air travel. A passenger is
entitled to a travel voucher or credit if
the passenger is prohibited from travel
by a government order (i.e., an order
prohibiting the passenger from traveling
to or from the airport at the origination
or destination) from entering the
destination country/city as show in the
passenger’s itinerary or from boarding
the flight(s). As proof of eligibility,
airlines may require these passengers to
provide the relevant government order
and any appropriate supporting
documentation to show the nexus
between the government order and their
inability to travel. For example, if a
passenger states that he or she is
prohibited from entering the destination
country by a government order because
of the passenger’s nationality, carriers
may require proof of the passenger’s
nationality in addition to the relevant
government order prohibiting
passengers of certain nationalities from
entering.
With respect to government orders
that do not prohibit travel but
substantially restrict travel, the
Department has considered airline
comments that ‘‘the restriction that
renders travel meaningless’’ standard is
subjective and requires a case-by-case
analysis into the purpose of each
passenger’s travel. As a result, the
Department has removed the ‘‘rendering
travel meaningless’’ standard. In the
NPRM, the Department had explained
what it meant by renders travel
meaningless through an example of a
passenger who plans to spend a week at
the vacation destination and the local
government imposes a seven-day
quarantine requirement for all arriving
passengers, which eliminates the
purpose of the travel. Allegiant Air
criticized the Department for picking
the ‘‘low-hanging fruit’’ by providing
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this example and asked that the
Department also opine on whether a
passenger would be eligible for the
proposed protection if only a part of the
time at the destination is lost. The
Department agrees that more clarity is
needed in this respect so that airlines
have more certainty on their obligation
and consumes are treated consistently
from airline to airline.
In place of the ‘‘rendering travel
meaningless’’ standard, the Department
specifies in this final rule that the travel
restriction that would entitle a
consumer to a travel credit or voucher
is a mandatory quarantine at the
passenger’s destination for more than
50% of the length of the passenger’s
planned trip. As proof of eligibility,
airlines may require passengers to
provide the relevant government order
mandating a quarantine which includes
information about the length of the
quarantine and documentation to show
the length of the passenger’s planned
time at the destination, excluding the
travel dates. This amendment should
address carriers’ concern about fraud
and abuse.
7. Passengers Who Are Advised by a
Medical Professional Not To Travel To
Protect the Health of Others
The NPRM: Beyond widespread
infections of a communicable disease
that lead to a ‘‘public health emergency’’
declaration or government orders
restricting or prohibiting travel, the
Department also proposed to require
airlines and ticket agents to issue travel
credits or vouchers to passengers who
are advised or determine not to travel to
protect the health of others because they
have or may have contracted a serious
communicable disease, regardless of
whether there is a public health
emergency. The Department stated that
it believes that airlines in general would
allow and prefer that a passenger with
a serious communicable disease in the
contagious stage not travel, and airlines
would likely grant an exception from
the tickets’ non-refundability to allow
the passenger to reschedule travel. The
Department described airlines’ current
practices in assessing whether a
passenger with a communicable disease
would pose a direct threat to the health
of others such as requesting medical
documentation and in minimizing risk
to other passengers such as taking
precautions to prevent the transmission
of the disease in the cabin while
transporting the passenger, or if
appropriate, denying boarding and
allowing the passenger to reschedule
travel. The Department expressed its
belief that it would be in the interest of
carriers, passengers, and the public at
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large for the travel to be postponed. The
Department noted that this proposal
would cover only passengers who have
or may have contracted a serious
communicable disease and the
consumer’s condition is such that
traveling on a commercial flight would
pose a direct threat to the health of
others based on advice from a medical
professional or the consumer’s
determination consistent with public
health authorities issued by CDC,
comparable agencies in other countries,
or WHO.
The Department noted that using
economic tools as incentives to
discourage passengers who would pose
a risk to the health of others from
traveling is consistent with its mission
to ensure that the air transportation
system is safe and adequate for the
public. It also noted its expectation that
requests for credits or vouchers under
this circumstance should be infrequent
and will likely place minimal burden on
the airlines outside of the context of
public health emergencies. The
Department solicited comment on the
potential for abuse and whether a
documentation requirement is sufficient
to prevent abuse. Further, the
Department asked for suggestions on
alternative methods to protect
consumers who are advised by a
medical professional or determine
consistent with public health guidance
not to travel because they have or may
have a serious communicable disease.
Comments Received: A4A expressed
its concern about this proposal not
being tied to either a public health
emergency or a government-issued
order. It argued that the proposal
allowing passengers to subjectively
determine that they should not travel
‘‘consistent with’’ public health
guidance will cause tremendous
confusion and impose significant costs
to carriers. Like A4A, several other
airline commenters expressed their
concerns about the broad scope of the
proposal that protects not only
passengers advised by a medical
professional not to travel due to
contracting a serious communicable
disease, but also passengers who rely on
public health guidance issued by
governments around the world to
determine that they should not travel.
Airline commenters were generally
concerned about allowing consumers
who ‘‘may have’’ a serious
communicable disease to receive travel
credits or vouchers. Commenters
asserted that this broad scope will
would lead to bad faith actors engaging
in fraud and abuse and good faith
consumers cancelling travel based on
misinformation, creating a huge
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workload for carriers and the
Department to resolve complaints. A4A
also asked the Department to clarify
whether the ‘‘comparable agencies in
other countries’’ whose guidance may
be relied on by consumers include
third-party non-government entities if
these entities’ guidance is relied on by
state or local level governments.
IATA and AAPA stated that airlines
already have policies in place to
accommodate passengers who are not
able to travel due to a communicable
disease, including requiring medical
documentation. They argued that the
Department has offered no evidence to
show that these policies do not work.
NACA stated that it is too broad to
impose the proposal irrespective of a
public health emergency. A4A also
commented that the proposal does not
require that passengers must have
purchased their tickets before
contracting the disease, which could
result in passengers who purchased
tickets while knowing they have a
serious communicable disease to be
eligible for the protection.
Travelers United stated that an airline
‘‘sick-passenger rule’’ would help stop
disease spread and should be enforced
all the time, not just during public
health emergencies. It commented that
airlines’ current ‘‘sick passenger rule,’’
which allows postponing travel but with
a fee, has resulted in sick passengers
deciding to continue travel. On the
other hand, according to Travelers
United, airlines that allow sick
passengers to postpone travel without
charge have reported no problems of
fraud.
Similar to airlines, ticket agent
representatives raised concerns about
the scope and ambiguity of certain terms
used in the proposal. USTOA
commented that requiring credits or
vouchers be issued to passengers who
‘‘may have’’ contracted a serious
communicable disease will invite abuse
and fraud. It stated that the protection
should be tied to a public health
emergency. GBTA asserted that the
NPRM does not define ‘‘serious
communicable disease’’ in an actionable
way and the Department, airlines, and
ticket agents lack the public health
expertise to navigate the requirements of
the proposed definition. It further
commented that the proposal leaves it
open on who would need to verify a
passenger’s health status and what
mechanism would be used to settle
disputes. ABTA suggested that if the
Department moves forward with this
proposal, airlines and ticket agents
should be allowed to require clear
evidential documentations issued by
certificated and qualified medical
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professionals. Travel Tech opined that
instead of the proposed requirement,
airlines should be required to rebook
without charge to accommodate
passengers who have or may have
contracted a serious communicable
disease. The ACPAC discussed this
proposal and recommended to the
Department to adopt a rule that requires
airlines and ticket agents to provide
travel credits or vouchers when a
consumer is advised by a medical
professional or determines consistent
with public health guidance issued by
CDC, comparable agencies in other
countries, or WHO not to travel by air
because the consumer has or may have
contracted a serious communicable
disease, and the consumer’s condition is
such that traveling on a commercial
flight would pose a direct threat to the
health of others. The ACPAC
recommended that the requirement
apply regardless of whether there is a
public health emergency.88
Public Hearing: The March 21, 2023,
public hearing held under the
requirement of 14 CFR 399.75 discussed
the subject of whether a consumer can
make reasonable self-determination
regarding contracting a serious
communicable disease. In the Notice
announcing the hearing, the Department
requested interested parties to provide
information on airlines’ and ticket
agents’ current practice in handling
consumers’ requests to cancel or
postpone travel due to contracting a
serious communicable disease. The
Department further asked for data on the
volume of such requests, the volume of
requests that were considered
fraudulent, and the volume of requests
that were not considered fraudulent but
were rejected because they were deemed
‘‘unreasonable self-determination.’’ The
Department also requested information
on the costs to airlines and ticket agents
to verify consumers’ claims regarding
contracting a serious communicable
disease and the type of diseases being
claimed as a reason to postpone or
cancel travel.
During the March 21 public hearing,
a representative of FlyersRights
commented that consumers can make
reasonable self-determinations regarding
contracting a serious communicable
disease. He specifically mentioned that
during the COVID–19 pandemic, many
passengers avoided flying when they
self-determined that they were COVIDpositive. A representative from National
88 Among the four members of ACPAC, three
members voted in support of this recommendation
and the member representing airlines abstained,
stating that there are many terms in the proposal
that are not clear and may cause more passenger
confusion.
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Consumers League stated that the
Department should not accept the
assumption that consumers cannot
make reasonable self-determinations
and that consumers will abuse this
proposed right. He further argued that
the proposal is consistent with the
CDC’s longstanding approach that
advises people to stay home while they
are sick. On the subject of abuse, he
stated that should an airline determine
that a passenger is serially abusing this
right, nothing would prevent the airline
from refusing service to such a
passenger in the future. On the cost of
the proposal, he commented that the
Department should not accept the
assertion that consumers exercising this
right will significantly increase cost to
airlines. In that regard, he pointed out
that airlines are required to issue
credits, not refunds, which means they
can continue to earn interest from the
money consumers used to purchase the
tickets, until the credits are used. He
further commented that airlines can also
sell the vacated seats, likely for a higher
price because it would be closer to
travel dates.
Several airline representatives
provided comments during the public
hearing. One A4A representative
commented that nearly all the data
sought by the Department in the public
hearing notice does not answer the
question that is the subject of the
hearing because there is no current
standard applied for seeking credits or
refunds for a ‘‘serious communicable
disease’’ and that the information
sought by the Department would have
nothing to do with the reasonableness of
consumers’ self-determinations. Two
representatives from MedAire spoke at
the hearing at the request of A4A and
IATA. One speaker commented that
from his experiences as a medical
doctor for MedAire, he strongly believes
that self-determining a medical
condition regarding communicable
disease is not a simple matter. He
opined that properly trained medical
professionals are the only ones who can
ultimately make these determinations.
He concluded that if the practice of selfdetermination is to be entertained, strict
and specific criteria need to be applied,
and such criteria should be subject to
changes according to prevailing public
health guidance issued by central health
authorities. The other speaker from
MedAire commented that the
Department should analyze the topic
from an operational perspective. He
stated that MedAire trains crew
members on how to handle medical
conditions and how to comply with the
Air Carrier Access Act regulation, 14
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CFR part 382. He stated that there could
be confusion among crew members and
customer service agents regarding the
requirement of this NPRM and the
requirement of Part 382. He expressed
his concern that the terminology
associated with Part 382 and the
terminology proposed in this NPRM,
such as ‘‘direct threat’’ and ‘‘serious
communicable disease,’’ is not aligned
and that the Department should look
into achieving some alignment to avoid
confusion. A doctor from Harvard
medical school also spoke at the request
of A4A and IATA. As an expert in
airborne transmission of disease during
transportation and a lung physician, he
stated that his perspective is to try to
assess the potential for individuals to
judge whether they have a serious
transmissible infection. He indicated
that for diseases such as COVID that can
be tested at home, there is consensus
that an individual who tested positive
should not travel. He commented that,
however, there are a variety of viral
respiratory infections for which there
are no tests. He opined that even erring
on the side of assuming there was a
respiratory infection, particularly when
accompanied by a fever, during a
pandemic or endemic, it is still difficult
for an individual to be sure that they
have a disease that is communicable. He
expressed his concerns about the
accuracy of self-determination as well as
the potential for a reasonable public
health precaution being used by
individuals who change travel plan for
reasons not related to health. He
concluded that it is very difficult to selfdetermine that one has a serious
communicable disease in a way that is
operationally honest and fair to both
sides.
Next, an IATA medical advisor
specializing in occupational and air
space medicine provided comments. He
pointed out that airlines today already
regularly accommodate passengers by
offering travel credits or vouchers to
passengers who have been diagnosed by
a medical doctor as having a
communicable disease that could
threaten the health of other passengers
on an aircraft, and airlines normally
make the determination on the validity
of the passenger’s claim through reviews
of the medical documentation provided
by airline medical advisers, either in
house or contracted by external
organizations such as MedAire. He
stated that he believes a final rule in this
area must provide greater guidance as to
what should or should not be
considered a threat to other passengers
in an aircraft environment. He stated
that the medical system is based on the
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premise that trained medical
professionals are best positioned to
diagnosis diseases, weigh medical risks,
and prescribe appropriate management.
He concluded that any final rule in this
area must require passengers seeking a
refund or voucher to present
documentation verifying that a medical
professional has seen the passenger and
assessed them for a particular serious
communicable disease and that the
presence of that passenger in the aircraft
threatens the safety of other passengers.
In that regard, he urged the Department
to eliminate the self-diagnose option
from any final rule, to provide a short
list of likely conditions of concern, to
require that any definition of
communicable disease recognize the
unique nature of aircraft environment,
and to provide that the airline’s medical
service be given the final determination
in any case of doubt.
Following the March 21 public
hearing, A4A and IATA filed
supplemental comments to reiterate
their positions that consumers cannot
reasonably self-diagnose and medical
professionals are best positioned to
diagnose and proscribe appropriate
treatments. This position is supported
by Spirit. USTOA also supported the
airlines’ position and added that, if the
Department moves forward with this
proposal, it should be limited to
consumers who present a medical
attestation completed by a licensed
physician who is actually treating the
individual.
DOT Responses: After considering all
the comments, the Department is
requiring airlines to provide travel
credits or vouchers to consumers who
are advised by a medical professional
not to travel, irrespective of a public
health emergency, because the
consumers have or are likely to have
contracted a serious communicable
disease and would pose a direct threat
to the health of others. An airline may
require documentation from a passenger
under these circumstances absent a
public health directive or order issued
by HHS stating that requiring medical
documentation is not in the public
interest.
This final rule differs from the
proposal in that it allows airlines to
require documentation from a licensed
medical professional that the passenger
has or is likely to have a serious
communicable disease and the
consumer’s condition is such that
traveling on a commercial flight would
pose a direct threat to the health of
others. Under this final rule, unless
directed otherwise by HHS, airlines are
not required to accept consumers’ selfdiagnosis as evidence that they
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contracted a serious communicable
disease ‘‘consistent with’’ public health
guidance as proposed. The Department
has determined that a documentation
requirement is in the public interest as
it would prevent consumer confusion
on whether they should or shouldn’t
take a flight and minimize likelihood of
fraud or abuse.
In addition to allowing airlines to
require medical documentation, the
Department has made other smaller
changes in response to the comments
received in the docket and at the public
hearing. Regarding covered passengers,
we agree with airline and ticket agent
commenters that the phrase the
consumer ‘‘may have contracted a
serious communicable disease’’ could
potentially be misunderstood should
individuals self-diagnose whether they
have a communicable disease. As stated
in the prior paragraph, under this final
rule, airlines are not required to accept
the assertion by consumers, based on
self-diagnosis, that they contracted or
may have contracted a serious
communicable disease as evidence of
their eligibility for credits or vouchers.
However, the Department disagrees with
some airlines’ suggestion that the
Department eliminate the term ‘‘may
have’’ entirely and only include
passengers who have been clinically
confirmed to have a serious
communicable disease. As medical
professionals indicated during the
public hearing, some communicable
disease cannot be diagnosed with a
simple test that can be administered at
home or at a clinic. Instead, diagnosing
certain serious communicable diseases
would require much more
comprehensive medical procedures.
Also, at the public hearing, a medical
expert stated that during a pandemic or
epidemic when a communicable disease
is known to be widespread, public
health experts may tend to be in favor
of erring on the side of assuming
infection when an individual displays
typical symptoms of a communicable
disease and there is no confirmation of
infection available. Further, requiring a
confirmed diagnosis for a disease,
particularly when readily available
testing is not an option, does not serve
the public interest. Accordingly, instead
of a passenger who ‘‘may have’’
contracted a serious communicable
disease, the final rule uses the term ‘‘is
likely to have’’ contracted a serious
communicable disease and, in absence
of HHS stating that requiring medical
documentation is not in the public
interest, an assertion that a passenger
‘‘has or is likely to have’’ a serious
communicable disease must be
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supported by credible medical
documentation. The Department
believes that this amendment to the
NPRM proposal enhances clarity and
will reduce fraud and abuse, while
ensuring that the rule appropriately
includes passengers who don’t have a
confirmed diagnosis but were
considered likely to have an infection
by a treating medical professional so
they are incentivized to postpone travel
while medically considered to be
potentially contagious.
Also, on the scope of protected
passengers, the final rule clarifies that
when a passenger who has or is likely
to have a serious communicable disease
purchased a ticket is irrelevant to the
passenger’s eligibility for a travel credit
or voucher. As stated in the legal
authority section, the Department
believes that it is unreasonable to expect
a passenger to purchase a refundable
ticket or travel insurance for the
purpose of gaining more flexibility to
postpone travel due to contracting a
serious communicable disease when a
public health emergency has not been
declared. Passengers who purchased
their tickets during a public health
emergency, however, could reasonably
have imagined contracting a serious
communicable disease and could have
purchased a refundable ticket or travel
insurance to avoid risk of financial loss.
Nevertheless, an airline’s practice of not
providing travel credits or vouchers to
those passengers is an unfair practice
because it is likely to cause harm to the
health of other passengers, which they
cannot reasonably avoid if the
potentially infected passengers choose
to continue travel to avoid financial loss
as set forth in section IV.1(i).
Regarding comments to align the
definition of ‘‘direct threat’’ and
‘‘serious communicable disease’’ in this
proposed rule to the definition of those
terms in the Department’s disability
regulation, the Department views that
these terms as used in this final rule to
be consistent with the terms as used in
the disability regulation. The
Department’s regulation implementing
the Air Carrier Access Act, 14 CFR part
382, provides that a ‘‘direct threat’’ is a
significant risk to the health or safety of
others that cannot be eliminated by a
modification of policies, practices, or
procedures, or by the provision of
auxiliary aids or services.89 We note that
the context for the ‘‘direct threat’’
assessment under Part 382 is different
from the context here. In Part 382, the
regulatory goal of requiring carriers to
conduct a ‘‘direct threat’’ assessment is
to ensure that carriers apply reasonable
89 14
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standards to determine that the carriage
of a passenger would pose a direct
threat to others before imposing travel
restrictions on or denying boarding of
the passenger who wishes to travel
despite having contracted a
communicable disease. Here, however,
the goal of the regulation is to ensure
that carriers apply a reasonableness
standard to determine whether the
assertion by the passenger’s treating
medical professional of posing a direct
threat is sufficiently valid to warrant the
issuance of travel credits or vouchers to
a passenger who wishes to postpone
travel. Nonetheless, in both regulations,
the determination of ‘‘direct threat’’ is
based on the same set of objective,
factual, and science-based standards
that looks into the nature of the
communicable disease, the consequence
of the disease, the likelihood of disease
transmission in the aircraft cabin by
casual contact. With respect to the term
‘‘serious communicable disease,’’ as
explained earlier in this document, the
definition of this term as adopted in this
final rule is consistent with that of Part
382.
8. Supporting Documentation
The NPRM: The Department proposed
to allow carriers and ticket agents, as a
condition for issuing travel credits or
vouchers, to require certain
documentation dated within 30 days of
the initial departure date of the affected
flight. For consumers stating an inability
to travel due to a government restriction
or prohibition in relation to a serious
communicable disease, the Department
proposed to allow carriers to require the
government order or other document
demonstrating how the consumer’s
ability to travel is restricted. The
Department explained that a quarantine
isolation order or a border closure
notice or entry restriction issued by a
government would all be acceptable
documents. The Department added that
even a local stay at home order that
restricts local travel would be
reasonable if it impacts the passenger’s
entry or exit of the local vicinity
through air travel. For consumers stating
that they are not traveling because they
have been advised by a medical
professional or have self-determined
consistent with public health guidance
not to travel by air to protect themselves
from a serious communicable disease,
the Department proposed to allow
carriers to require the applicable
guidance or a written statement from a
licensed medical professional attesting
that it is the medical professional’s
opinion that the consumers should not
travel by commercial air transportation
to protect themselves. The Department
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made clear that a general fear about
traveling when there is a public health
emergency declared would not be
sufficient to entitle that passenger to a
travel credit or voucher. For consumers
stating that they have been advised by
a medical professional or selfdetermined consistent with public
health guidance not to travel because
they have or may have contracted a
serious communicable disease that
poses a direct threat to the health of
others, the Department proposed to
allow carriers to require the applicable
guidance or a written statement from a
licensed medical professional attesting
that it is the medical professional’s
opinion that the consumer should not
travel by commercial air transportation
to protect the health of others. Under
the proposal, the type of document that
a carrier could require of consumers
seeking not to travel to protect
themselves or others would be
dependent on whether the consumer
was advised by a medical professional
or making a self-determination based on
public health guidance. To the extent
that a passenger is providing a written
statement from a medical professional,
the Department proposed to permit
airlines and ticket agents to request that
the documentation be current.
The Department asked whether the
types of information that the
Department would allow airlines and
ticket agents to seek from passengers is
adequate; whether there are ways to
reduce or prevent passengers from
falsely claiming that they have a serious
communicable disease without airlines
and ticket agents requesting
documentation from passengers about
their health; whether the Department
should specify that the medical
documentation explain the reason that
the passenger is more susceptible than
others to contracting a serious
communicable disease during air travel
and whether there are any implications
on privacy concerns; and whether the
proposal that medical documentation be
dated within 30 days of the initial
departure date is reasonable and
appropriate.
Comments Received: Several airline
commenters were concerned about the
term ‘‘medical professional,’’ asserting
that the term is too broad and
potentially invites fraud. Commenters
stated that this issue is analogous to the
emotional support animal (ESA)
situation under the Department’s Air
Carrier Access Act rule prior to its
revision in 2020, which required
carriers to accept ESAs as service
animals provided that passengers
present medical documentation from a
licensed mental health professional.
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They further asserted that like the ESA
regulation, the proposed rule here
allows unscrupulous passengers to take
advantage of the undefined term by
seeking documentations from a broad
range of medical professionals who may
have no knowledge about the relevant
information sought, or even purchasing
documentations from online sources
without actual medical treatment or
evaluation.
A4A commented that a more robust
documentation scheme will reduce the
likelihood of travel credits being sought
by ineligible passengers. A4A suggested
that similar to the 2020 service animal
final rule,90 the Department should
prescribe a government form that
includes a warning of the potential
Federal criminal penalty under 18
U.S.C. 1001 for any person to knowingly
or willfully make materially false or
fraudulent statements to obtain travel
credits. A4A further suggested that the
form should be dated within 15 days of
the departure and should require certain
information including the passenger’s
name, date of birth, diagnosis, method
of diagnosis, test result, information
regarding the medical professional
(name, license information, location,
signature), a clear statement that the
passenger should not travel, a statement
regarding when the passenger can travel
again. IATA supported A4A’s
suggestion that the medical
documentation should include a
criminal penalty warning and that the
documentation should be dated within
15 days of departure. IATA further
commented that it does not see any
privacy concerns on requiring medical
attestation from passengers because
passengers are choosing to waive their
rights to privacy to avoid losing the
money invested in the tickets. Allegiant
commented that the proposed
documentation requirement creates
opportunities for abuse when
passengers only need to present a
doctor’s note stating that they may have
a serious communicable disease.
Allegiant opined that this will become
a refuge for passengers who want to
avoid paying ticket change fees.
Air Canada expressed its concerns
about the burden of carriers’ manually
reviewing and assessing
documentations, arguing that different
public health policies adopted by
different countries and subjective
interpretations will create a complex
and ever-changing set of rules that
would greatly interfere with carriers’
ability to sell seats with predictability.
It further suggested that the Department
90 Final Rule, Traveling by Air With Service
Animals, 85 FR 79742, Dec. 10, 2020.
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should remove all documentary
evidence that requires a subjective
assessment of a passenger’s condition or
reason not to travel to avoid the burden
and costs to carriers associated with a
manual review process.
A number of individual commenters
also provided their views on the
proposed documentation requirement.
One individual commenter
recommended that medical
documentation should be required only
when the communicable disease is not
demonstrable via a test result. Another
commenter stated that the ‘‘medical
professionals’’ issuing the
documentation should include not only
physicians, but also other primary care
providers such as nurse practitioners or
physician’s assistants. In contrast,
another individual opined that the
proposal failed to provide guidance
regarding the types of medical
professionals who are qualified to issue
the documentation, resulting in a broad
scope of the type of medical
professionals that is untenable to
airlines. One individual commented
that the scope of the types, formats, and
language of the proposed
documentation requirement is
enormous, and verifying their
authenticity will be burdensome, with a
high possibility of fraud. This
commenter suggested that the
Department consider imposing stricter
requirements to prevent abuse. Another
individual commenter expressed
concerns about fraud and abuse and
argued that consumers should be
required to provide a certification from
a registered medical professional or
positive test result from a professional
third party (as opposed to a home test
kit).
The Department also received
comments from ticket agent
representatives on the issue of
documentation. USTOA agreed with
airline commenters and argued that the
Department should define the scope of
qualifying public health guidance and
medical professionals to ensure clarity
on the required documentation. It
further echoed airlines’ comments that
the Department should prescribe the
medical form that includes a warning of
Federal crime for false statements.
USTOA further commented that ticket
agents should be able to require that
documentation be in English or in any
other language of their choice to avoid
the cost of translation. Travel
Management Coalition stated that it
should be entirely airlines’
responsibility to require health-related
evidentiary documents and that ticket
agents should not be involved in
determining whether passengers are
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entitled to travel credits. In that regard,
it offered that, to limit the number of
parties involved and to protect
passenger privacy, passengers should
provide documentation directly to
airlines even if ticket agents are the
merchants of record for the ticket sales.
The ACPAC discussed the issue of
defining ‘‘medical professional’’ and
recommended to the Department to
replace the term ‘‘medical professional’’
with the term ‘‘treating physician,’’ and
adopt the definition for ‘‘treating
physician’’ as the following:
A ‘‘treating physician’’ means an
individual who is licensed or authorized
under state law to engage in the practice of
medicine or the practice of osteopathic
medicine and surgery, who furnishes a
consultation or treats a patient for a specific
physical or mental health condition, and who
may use the results of a diagnostic test in the
management of the patient’s specific
physical or mental health condition. For
purposes of this rule alone, the term ‘‘treating
physician’’ includes physicians, osteopaths,
nurse practitioners, social workers, licensed
professional counselors, psychiatrists,
physician’s assistants, and other medical
providers who are licensed in the state in
which the treatment is or has been provided
and who are allowed, pursuant to state and
federal licensing regulations, to provide
individualized care to the patient without
medical supervision by another medical
provider.91
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Public Hearing: DOT also addressed
the topic of whether the proposed
documentation requirements (medical
attestation and/or public health
guidance) are sufficient to prevent fraud
in the notice announcing the March 21,
2023, public hearing. In the notice, DOT
asked participants to provide
information on whether medical
attestations currently provided to
airlines from consumers seeking to
cancel or postpone travel are primarily
based on consumers’ self-assessments,
medical professionals’ assessments, or a
combination of both; the types of
medical professionals currently
providing the attestations accepted by
airlines and ticket agents; the types of
public health authority-issued guidance
91 This definition, based on Michigan law and
regulation of Centers for Medicare & Medicaid
Services, is provided by the State Attorney General
of Michigan, who is a member and chair of the
ACPAC. Two additional members representing
consumer rights advocacy groups and airports,
respectively, support this recommendation. The
member representing A4A is against the
recommendation, stating that it includes
practitioners such as social workers and
psychiatrists who would not be treating an
infectious or communicable disease. The member
further reiterated that A4A’s belief that ‘‘treating
physician’’ should be treating the person for the
infectious disease or serious communicable disease
based on which the consumers are seeking flight
credit.
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currently affecting air travel; and
airlines’ validation of medical
attestations, including the procedures,
the volume, and the costs associated
with the validation.
During the hearing, the representative
from FlyersRights and the representative
from National Consumers League both
spoke against airlines’ argument that the
situation of passengers fraudulently
claiming a communicable disease is
analogous to the situation where a small
percentage of passengers fraudulently
obtain paperwork that allows them to
bring a pet animal onboard as an ESA.
They stated that in the matter regarding
ESAs, airlines faced potential injury of
losing revenue for transporting the
animals as a pet as well as potential
safety and health concerns. They
pointed out that in contrast, there is
little incentive for consumers to engage
in fraud here because the appeal of
fraud is to net a monetary gain and there
is no monetary gain in this instance
when a consumer simply avoids a loss
of the money that they already paid by
obtaining a travel credit or a voucher.
They view DOT’s proposed requirement
as sufficient and well-conceived and
urge the Department to disregard the
industry petitioners’ concerns, which
they believe rest on a flawed
assumption that consumers will have
such an incentive to obtain travel
credits under the proposal and that the
cost will outweigh public health and
consumer protection benefits. The
consumer advocates argued that no rule
will completely prevent fraud, and
instances of fraud should be
investigated and punished.
A representative from A4A
commented that the hearing request
initiated by the airline industry on this
issue is broader than the questions
posed by the Department in the hearing
notice. He commented that the data
sought by the Department in the hearing
notice will not answer the questions at
hand. Specifically, he stated that both
the basis of current medical attestations
provided to airlines by consumers, and
the types of medical professionals
currently providing such attestations
have no bearing on the actual adequacy
of the documentation to prevent fraud
under the proposed standards for credits
or refunds, especially when airlines’
current standards differ from those
proposed. He further stated that U.S.
airlines typically don’t provide credits
or refunds when the passenger only may
have a communicable disease or when
the consumer wants to protect him or
herself from a communicable disease.
He noted that Part 382 requires the
medical professional to be, at least, the
passenger’s physician, and even with
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32819
that, the airline can require the
passenger to undergo specific review
under certain circumstances. He also
commented that the types of guidance
‘‘affecting air travel’’ issued by public
health authorities currently has no
bearing on whether providing such
information is adequate to prevent
fraudulent claims. He opined that what
matters is the guidance related to
communicable diseases and whether,
with no other information presented to
the airline, simply providing such
guidance would allow the airline to
determine whether the consumer is
making a fraudulent claim. He
concluded that the proposed
documentation standard will only
confuse consumers into believing that
they can submit unsubstantiated
attestations or public health guidance to
support their claims.
A representative from MedAire,
which provides medical advisory
services to airlines, stated that he was
commenting strictly from a medical
standpoint and without considering the
economic aspects around the question.
From that perspective, the MedAire
medical expert stated that a public
health authority-issued criteria and
guidelines in concert with a properly
trained medical professional to
diagnosis and to attest the presence of
a transmissible disease is the ideal and
the best practice possible to minimize
fraud and abuse to a manageable level.
A representative from A4A
commented that A4A’s concerns
regarding the proposals go beyond fraud
and asserted A4A’s belief that the
proposal is impractical and unworkable
and an example of regulatory overreach
by a transportation regulatory agency
lacking expertise in the area of public
health. He offered that A4A members
that currently accept medical
documentation in connection with
passenger-initiated itinerary changes
typically require the documentation to
be in the form of a medical professional
document issued by a treating
physician, and in cases where
documentation from a non-treating
physician is allowed, the airlines would
require the documentation to be on
official letterhead. He stated that the
current level of fraud is low because
most airlines’ policies would not
contemplate allowing passengers to selfcertify their conditions or produce
public health guidance without
accompanying statement by a treating
physician.
On the Department’s request for
information regarding the types of
public health authorities that issue
guidance affecting air travel, the A4A
representative stated that many airline
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members do not routinely track this
information because, in the current
environment, change and cancellation
fees for most fare types have been
eliminated. He further identified various
aspects of the NPRM that A4A believes
depend on factual issues that are
genuinely in dispute. First, he stated
that DOT assumes in the NPRM that the
medical professional completing the
attestation possesses sufficient
knowledge of not only the
communicable disease but also the
passenger’s current condition. He
asserted that if this medical professional
is not the passenger’s treating physician
and has not examined the passenger, the
reliability of the documentation
becomes highly questionable and the
possibility of fraud is heightened.
Second, he stated that DOT’s finding
that the required production of relevant
public health guidance will reduce
fraud assumes such guidance will be
given due to the person’s condition. He
asserted that, for example, guidance
recommending an individual having
been exposed to serious disease refrain
from travel for a set number of days
would not prevent unscrupulous
individuals who have not had any
exposure from misusing the guidance.
Third, he stated that the NPRM assumes
that the guidance produced by the
passenger will be authentic, yet there’s
no provision in the draft rule text
addressing validation by airlines.
Fourth, he commented that DOT’s
implicit assumption is that airlines have
the ability, if they so choose, to confirm
the authenticity of the documentation
through reasonable inquiry without
external efforts. He offered that this is
not the case, for example, with public
health guidance not widely posted on a
governmental website. Lastly, he
disputed two claims made in the NPRM.
Regarding DOT’s claim that the proposal
will promote public health by
discouraging travel by persons who
have contracted or been exposed to a
communicable disease, he commented
that this is highly questionable given
that there’s little to no correlation
between the non-expiring travel credit
proposal and slowing communicable
disease spread, a point that A4A asserts
the Department’s own regulatory impact
analysis concedes. Regarding DOT’s
claim that it will benefit consumers by
protecting their financial interests and
expenditures made on tickets, he
commented that any such benefit may
be eliminated by the proposal’s longerterm impact on ticket pricing. He
elaborated that airlines will not be able
to resell seats suddenly returned to
inventory because of passengers who
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have availed themselves of the nonexpiring travel option. He stated that to
recoup their losses and account for the
longer-term liability of non-expiring
travel credit, airlines may have to
increase fares, and, in some cases, that
means routes may be rendered
uneconomical, potentially leading to
service cuts.
An economist from A4A spoke on
data aggregated by A4A on significant
fraud associated with customers who
claim that their pets were ESAs, arguing
that the topic of ESA is relevant to this
hearing because it demonstrates why
carriers are concerned about the
potential fraud that will result from this
rulemaking. He commented that the
ESA issue also demonstrated that fraud
occurs when a regulation fails to define
or loosely defines terms and allows
passengers to make suggestive
interpretations that carriers are
prevented from disputing, questioning,
or validating. He stated that the ESA
data clearly demonstrates that fraud was
extensive and substantial. According to
the speaker, from 2016 to 2019, the
number of ESAs traveled had more than
doubled, skyrocketing from 540,000 in
2016 to 1.13 million in 2019. He stated
that DOT ultimately changed the
definition of a service animal to exclude
ESAs. He commented that this
rulemaking similarly creates new,
ambiguous, and inconsistent standards,
including medical related standards
unknown to Federal health agencies
regarding ‘‘serious communicable
disease.’’ Next, he commented that U.S.
airlines have been and remain
responsive to refund requests and
frequently exceed DOT
recommendations regarding consumer
protections. He provided that the annual
cash refunds in 2021 and 2022 exceeded
pre-pandemic 2019 level and in 2022,
the 11 largest U.S. carriers issued $11.2
billion in refunds. He noted that DOT
received less than one complaint about
refunds for every 100,000 passengers.
He concluded his presentation by
stating that there is no evidence of a
market failure or unfair or deceptive
practice in this area.
DOT Responses: The Department is
continuing to allow airlines, as a
condition for issuing travel credits or
vouchers, to require certain
documentation. This final rule differs
from the proposal in that it allows
airlines to require current medical
documentation from consumers as
evidence that they are not traveling to
protect themselves or others from a
serious communicable disease. Airlines
are not required to accept consumers’
self-diagnoses that they contracted or
may have contracted a serious
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communicable disease ‘‘consistent
with’’ public health guidance and
providing the applicable guidance as
proposed. An airline’s ability to require
medical documentation from a
passenger under these circumstances is
conditioned on the absence of a public
health directive or order issued by HHS
stating that requiring medical
documentation is not in the public
interest. For consumers stating an
inability to travel due to a government
restriction or prohibition in relation to
a serious communicable disease, the
Department has not changed the
documentation allowed from what was
proposed at the NPRM stage but
specifies that the documentation must
be current. This final rule permits
carriers to require passengers provide a
current government order or other
document demonstrating how the
consumer’s ability to travel is restricted.
A government order is current if it is
valid for the planned travel date.
After carefully reviewing the
comments provided, as well as the
ACPAC recommendation, the
Department has decided to specify that
the medical documentation must be
from a licensed treating medical
professional and define that term. The
Department is adopting a definition for
‘‘licensed treating medical
professional,’’ to mean an individual,
including a physician, a nurse
practitioner, a physician’s assistant, or
other medical provider, who is licensed
or authorized under the law of a State
or territory in the United States or a
comparable jurisdiction in another
country to engage in the practice of
medicine, to diagnose or treat a patient
for a specific physical health condition
that is the reason for the passenger to
request a travel credit or voucher. The
Department believes that limiting the
medical professionals to those who
provide or have recently provided
diagnoses or treatment to passengers for
the specific health condition that is the
reason for requesting the travel credits
or vouchers will better ensure
passengers do not rely on persons who
have no medical knowledge about their
health conditions. The Department
notes that the licensed treating medical
professional may provide in-person
medical diagnosis and treatment as well
as virtual diagnosis and treatment, as
deemed appropriate by common
medical practice. The Department also
notes that treating medical professionals
may include a primary care provider or
a specialist that treats the passenger on
a regular basis, as well as medical
professionals that the passenger sees on
an ad hoc basis, such as care providers
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from a walk-in clinic, an emergency care
facility, or a medical facility that the
passenger visits while away from home.
Regarding the treating medical
professional’s license, the definition
requires that the medical professional be
licensed in a State or territory of the
United States or a comparable
jurisdiction in another country. In that
regard, the rule allows carriers to
require that the documentation be on
the medical professional’s letterhead
and include information on the type and
date of the medical professional’s
license, the license number, and the
state or other jurisdiction in which it
was issued. The Department interprets
‘‘comparable jurisdiction in another
country’’ to mean the appropriate
governing body in a foreign country that
oversees the issuance of medical
licenses, either at a national or state
level.
For medical documentation provided
by passengers who seek travel credits or
vouchers due to an underlying health
condition, the rule allows carriers to
require that the medical documentation
be current, specify that the passenger
has an underlying health condition that
is being treated or has recently been
treated by the medical professional, and
that based on the licensed treating
medical professional’s opinion,
including references to relevant public
health guidance if available and
applicable, the passenger should not
travel on a commercial flight during a
public health emergency to protect his
or her own health. To protect
passengers’ privacy, carriers may not
insist that the documentation specify
what the underlying health condition is.
Further, because this medical
documentation specifically concerns the
passenger’s planned travel during a
public health emergency, to ensure that
the medical documentation is ‘‘current’’
with respect to the passenger’s medical
condition, carriers may require that it be
dated after the declaration of the public
health emergency but be within one
year of the scheduled travel date.
For medical documentation provided
by passengers seeking travel credits or
vouchers because the passenger has
contracted or is likely to have
contracted a serious communicable
disease, the rule allows carriers to
require that the documentation be
current, specify that the medical
professional has recently diagnosed
and/or provided medical care to the
passenger with regard to a serious
communicable disease, and be based on
the licensed treating medical
professional’s opinion, including
reference to relevant public health
guidance if available and applicable,
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that the passenger has contracted or is
likely to have contracted a serious
communicable disease and should not
travel on commercial flights to protect
the health of others on the flights. The
carriers may further require the medical
documentation provide a medically
reasonable timeframe during which the
passenger is advised against travel. The
purpose of the medical documentation
under this rule is to attest that it is the
medical professional’s opinion, based
on current medical knowledge about the
serious communicable disease at issue
and the passenger’s current health
condition, that the passenger should not
travel to protect others from that serious
communicable disease. This rule allows
carriers to apply a reasonable standard
to determine whether medical
documentation is current. For example,
if according to public health guidance
on a particular communicable disease,
an individual would normally remain
contagious for 15 days from the date of
diagnose or onset symptom, it would be
reasonable for carriers to interpret that
‘‘current’’ medical documentation
means the documentation is dated
within 15 days of the scheduled
departure. The Department believes that
this flexibility serves the public interest
by allowing carriers to tailor the medical
documentation’s validity period based
on objective and scientific information,
i.e., the common contagious period of a
particular communicable disease,
therefore screening out passengers who
would generally have passed the
contagious period on the travel date
while ensuring that passengers who are
likely to pose a direct threat during
travel will not be unduly burdened to
seek medical documentation very close
to the travel date.
In addition to addressing the date of
the supporting documentations that
must be ‘‘current,’’ the Department has
considered the timing of passengers
providing the current documentation to
airlines when requesting a travel credit
or vouchers. Although it is conceivable
that passengers requesting travel credits
or vouchers based on a government
travel restriction would have the ability
to provide the documentation right
away because the government orders are
readily available to the public,
passengers requesting travel credits or
vouchers based on a health condition
may need additional time to schedule a
visit with a medical professional and
obtain the documentation. The
Department is concerned that the rule
would not effectively protect consumers
as intended if airlines are permitted to
require that the medical documentation
must be provided before the planned
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travel date. For example, if a public
health emergency was declared right
before a passenger’s travel date, and the
passenger has an underlying health
condition that would put the passenger
at risk during travel, the passenger
would be deprived the required credit
or voucher because there is no time to
obtain a medical documentation before
the travel date. Further, passengers
could be infected with a serious
communicable disease very close to the
travel date but there is not enough time
to seek an appointment with a treating
medical professional and obtain a
medical documentation before the
scheduled travel date. In such
situations, the final rule requires that
carriers allow a reasonable time for the
passenger to provide relevant medical
documentation after the scheduled
travel date as long as the passenger
notifies the carrier before the flight’s
departure about the illness. The carrier
may wait to issue the travel credit or
voucher until receiving current medical
documentation within that time period.
The Department notes that, although the
medical documentation may be dated
after the scheduled travel date, carriers
may require that the documentation
specify that based on the licensed
treating medical professional’s opinion,
including reference to relevant public
health guidance if available and
applicable, the passenger has contracted
or is likely to have contracted a serious
communicable disease and should not
travel by air on the scheduled travel
date to protect the health of others on
the flight. The Department believes that
requiring airlines to provide a
reasonable time for passengers who
suffer acute illness close to travel dates
to submit medical documentation
allows passengers to seek medical
diagnoses and obtain written
documentation to prove their eligibility
for travel credits or vouchers and avoid
the situation that passengers choose to
travel while feeling ill for fear of losing
the money paid for the tickets,
potentially endangering others on the
flight.
The Department has also decided
against creating a Federal medical form
that includes a criminal penalty
warning for false statements, as some
carriers and ticket agents have
suggested. We do not agree that a DOT
form is the best format to incorporate all
the information permitted by the rule.
Each passenger’s health condition
(including the underlying heath
condition increasing their risk level
while traveling during a public health
emergency or their personal medical
history of a serious communicable
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disease infection) may be different,
which warrants more flexibilities for
medical professionals to customize
content in the medical documentations
that they prepare. The Department has
also taken into account consumer rights
advocacy groups’ view that consumers
in situations discussed here may be less
likely to commit fraud or abuse the
regulatory protection in comparison to
situations related to ESAs as suggested
by carriers because consumers
requesting travel credits or vouchers
due to a serious communicable disease
have already paid airlines for their
travel and the potential net gain of
abusing the consumer protection
requirement is simply avoiding paying a
ticket change fee. The Department also
agrees with consumer rights advocacy
groups that airlines have effective tools
to investigate and pursue punitive
actions against serial offenders who
repeatedly engage in fraudulent actions
to receive travel credits or vouchers,
including banning the individual from
traveling on their flights. In conclusion,
the Department is confident that the
criteria for the documentations listed in
the rule that carriers may request and
carriers’ own deterrence tools would
place adequate safeguards against fraud
and abuse.
9. Travel Credits or Voucher
The NPRM: In the NPRM, the
Department addressed various issues
regarding the travel credits and
vouchers to be provided to passengers
due to government restrictions or health
concerns related to a serious
communicable disease. These issues
concern: (1) the appropriate validity
period of the credits or vouchers
provided to consumers, including
whether an indefinite validity period for
credits or vouchers issued under this
proposal is reasonable (2) the
transferability of the travel credits or
vouchers to others; (3) the value of the
travel credits or vouchers, including
establishing a minimum value of equal
to or greater than the airfare and
allowing a deduction from the credit or
voucher for service charges by ticket
agents when issuing the original ticket
and credit/voucher processing fees by
airlines and ticket agents; and (4) the
disclosure of any material restrictions,
limitations, or conditions on the use of
the credits and vouchers. More
specifically, the Department proposed to
require airlines and ticket agents
provide covered passengers nonexpiring credits or vouchers for future
travel and invited comment on requiring
that the travel credits or vouchers be
transferrable at the consumers’
discretion. The Department also
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proposed that the travel credits or
vouchers issued to these consumers be
‘‘a value equal to or greater than the fare
(including government-imposed taxes
and fees and carrier-imposed fees and
surcharges).’’ Further, the Department
proposed to allow airlines and ticket
agents to charge a processing fee for the
issuance of credits or vouchers and
sought comment on whether allowing
ticket agents to retain the service fees
charged when issuing the original ticket
is reasonable and appropriate.
(1) Validity Period and Transferability
The Department proposed to require
that airlines and ticket agents provide
non-expiring credits or vouchers for
future travel to qualifying consumers.
The Department sought comments on
whether an indefinite validity period for
credits or vouchers issued under this
proposal is reasonable, and if not, why
and what a reasonable minimum
validity period should be. Commenters
were encouraged to provide information
on what challenges airlines and ticket
agents may face when accommodating
the redemptions of travel credits and
vouchers that have no expiration dates.
Also, the Department sought comments
on whether it should require that the
travel credit or voucher be transferrable
at the consumers’ discretion. The
Department explained that
transferability would ensure that
eligible consumers who spent money on
tickets that they no longer need
wouldn’t completely lose the value of
the tickets.
(2) Value of Tickets and Processing Fees
To Issue Travel Credits and Vouchers
The Department proposed that the
travel credits or vouchers issued to
qualified consumers be ‘‘a value equal
to or greater than the fare (including
government-imposed taxes and fees and
carrier-imposed fees and surcharges).’’
The Department also proposed that the
credits or vouchers include any
prepayment of unused ancillary services
such as baggage fees or seat selection
fees as those services have not been
provided by the carrier.92 The
Department asked whether airlines
should be required to offer an option to
consumers in which consumers may
choose to receive the travel credit or
voucher redeemable for the same
itinerary as the original ticket,
92 The Department’s rulemaking on Refunding
Fees for Delayed Checked Bags and Ancillary
Services That Are Not Provided proposes that
airlines must refund any ancillary service fees when
a passenger traveled on the scheduled or an
alternative flight and the service was not provided.
See 81 FR 75347. That proposal is discussed and
finalized in Section III of this rule.
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regardless of what the ticket cost is at
the time of redemption, noting that as
airfare fluctuates, some consumers may
benefit from and prefer this option if
they plan to travel on the same itinerary
in the future without worrying about
price increases, while airlines may
benefit when the redeemed tickets are
priced less than the original purchase
price of the ticket.
Based on the Department’s view that
neither the airline or ticket agent
initiated the communicable diseaserelated change that is resulting in the
need for a credit or voucher, we
proposed to allow airlines and ticket
agents to charge a processing fee for the
issuance of credits or vouchers to nonrefundable ticket holders when
consumers’ travel plans are affected by
concerns related to a serious
communicable disease, provided that
the fee is on a per passenger basis and
appropriate disclosures were made to
the consumer prior to the consumer
purchasing the airline tickets. The
Department sought comments on
whether it is reasonable to permit
airlines and ticket agents to charge a
processing fee for the issuance of travel
credits or vouchers, and if so, what type
and manner of disclosure would be
sufficient to avoid consumer confusion
for fees applicable for these specific
circumstances.
(3) Restrictions and Disclosures
The Department proposed to prohibit
conditions, limitations, and restrictions
imposed on the credits and vouchers
that are unreasonable and would
materially reduce the value of the
credits and vouchers to consumers as
compared to the original purchase
prices of the airline tickets. The
Department provided a list of examples
that would be deemed unreasonable
under the proposal. These examples
included a credit or voucher that: would
severely restrict bookings with respect
to travel date, time, or routes; can only
be used on one booking and voids any
residual value; or would impose a
booking fee for a new ticket that reduces
the value of the voucher or credit
available to be used on the new ticket.
With regard to material restrictions,
limitation, and conditions on the use of
the credits and vouchers that are not
deemed unreasonable, the Department
proposed to require airlines and ticket
agents provide full disclosure. The
Department sought comments on
whether regulating the terms and
conditions of the credits or voucher in
this specific context is reasonable and
what other steps the Department should
consider ensuring that passengers
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receiving credits and vouchers for future
travel are adequately protected.
Comments Received: The Department
received comments on these issues from
airlines, ticket agents, and consumer
rights advocates with the validity period
for the travel credits and vouchers being
the most controversial.
(1) Validity Period and Transferability
A4A expressed strong concerns about
the proposal requiring that the credits or
vouchers be non-expiring, arguing that
such requirement would lead to
rampant fraud and abuse, exposing
carriers to significant financial and
accounting liabilities. A4A commented
that the requirement would (1) impose
financial hardship on carriers by
building up significant liability on their
accounting books that materially harm
credit ratings; (2) impose administrative
costs to carriers by requiring permanent
record retention and data access on
ticket and voucher records; (3) cause
technical issues to distribution systems
as those systems need an expiration date
populated to function; (4) raise tax
issues because airlines have to absorb
taxes remitted to governments that
cannot be refunded and repurposed if
consumers elect to not travel within a
reasonably short timeframe; and (5)
raise legal compliance issues under
State escheat laws, if they are not
preempted by the Department’s
authority. For these reasons, A4A
recommended that the Department
should not mandate the validity period
of credits or vouchers longer than one
year, and if the credits or vouchers are
issued during a public health emergency
and that emergency lasts beyond one
year, the Department would require that
the airlines extend the validity period
by one year at a time. A4A’s position
was supported by IATA, RAA, Spirit,
Qatar Airways, and SATA. These
commenters also were against requiring
the travel credits or vouchers be
transferable, arguing that it would create
a second-hand market that could lead to
fraud.
The ACPAC discussed this issue and
voted to recommend that the final rule
require the travel credits or vouchers be
non-expiring and transferrable.93
Travelers United also supported the
proposal to require the credits or
vouchers to be non-expiring, stating that
they should be treated as a store credit
93 Three members representing consumer rights
advocacy groups, State Attorneys General, and
airports, respectively, voted for the
recommendation. The member representing A4A
voted against the recommendation, stating that the
issue of transferability has not been analyzed and
that requiring transferrable credits may result in
fraud and abuse.
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with no restrictions on booking and
transferability. It further argued that the
current airline credit rules are different
from airline to airline and the
Department should adopt a uniform and
clear rule for credits and vouchers.
Most ticket agent representatives,
including Travel Management Coalition,
ABTA, USTOA, and Travel Tech,
opposed requiring credits or vouchers
be non-expiring. They argued that the
non-expiring requirement creates
uncertainties and long-term liability for
airlines and ticket agents and
unreasonable administrative and
reporting burdens to them. DWHSA, on
the other hand, supported the proposal
to require credits or vouchers be nonexpiring, arguing that if some airlines
are currently offering non-expiring
credits, all airlines should be able to do
so.
(2) Value of Tickets and Processing Fees
To Issue Travel Credits and Vouchers
On the value of the credits or
vouchers, A4A commented that the
Department should allow airlines to
adjust the amount to reflect nonrefundable foreign taxes. Several airline
commenters expressed their support for
the proposal to allow airlines and ticket
agents to charge a service fee for the
issuance of the credits or vouchers, and
some commenters also support the
disclosure requirement in relation to the
service charge. On booking restrictions,
A4A opined that DOT should not
regulate specific terms and conditions of
the credits or vouchers. Qatar Airways
suggested that clarity is needed on the
term ‘‘severe restriction.’’ A4A and
IATA commented that the Department
should let the market determine
whether the credits or vouchers can be
used for booking with one carrier or
others. Qatar Airways, on the other
hand, stated that the credits or vouchers
should only be redeemed with the
issuing airline.
Travelers United commented that all
credits or vouchers issued under the
proposals should be uniform and clear
to passengers and the Department
should ensure that any residual values
after one booking be available to
consumers. It further stated that the
only limitation on the credits or
vouchers should be that they must be
used on the issuing airline. Travelers
United also provided examples of
existing restrictions that it believes to be
unreasonable, including the
requirement that the credits or vouchers
cannot be used to pay ancillary service
fees and the requirement that the credits
or vouchers issued for a business class
ticket can only be used to book another
business class ticket.
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32823
As for processing fees, IATA, Spirit,
AAPA, and Qatar Airways supported
the proposal to allow airlines and ticket
agents to charge a processing fee for
issuing credits or vouchers. Several
ticket agent representatives also
supported the proposal. Two individual
consumers commented that if airlines
are allowed to charge a processing fee,
there should be a cap or clearly defined
limit to these fees. This individual
opined that if airlines are given too
much leeway to determine the amount
of the fee, consumers may end up
paying the fee that is the majority of the
cost. Another individual commented
that allowing airlines to charge a
processing fee for vouchers would result
in airlines charging a high fee, removing
the consumer protection provided by
the rule. Another individual commented
that it is inconsistent for the Department
to propose that the credits or vouchers
be ‘‘a value equal to or greater than the
fare’’ yet allow airlines to charge a
processing fee.
(3) Restrictions and Disclosures
On booking restrictions, A4A opined
that DOT should not regulate specific
terms and conditions of the credits or
vouchers. Qatar Airways suggested that
clarity is needed on the term ‘‘severe
restriction.’’ A4A and IATA commented
that the Department should let the
market determine whether the credits or
vouchers can be used for booking with
one carrier or others. Qatar Airways, on
the other hand, stated that the credits or
vouchers should only be redeemed with
the issuing airline.
Travelers United commented that all
credits or vouchers issued under the
proposals should be uniform and clear
to passengers and the Department
should ensure that any residual values
after one booking be available to
consumers. It further stated that the
only limitation on the credits or
vouchers should be that they must be
used on the issuing airline. Travelers
United also provided examples of
existing restrictions that it believed to
be unreasonable, including the
requirement that the credits or vouchers
cannot be used to pay ancillary service
fees and the requirement that the credits
or vouchers issued for a business class
ticket can only be used to book another
business class ticket.
ABTA opposed imposing a blanket
requirement on what restrictions are
permissible for the credits or vouchers,
stating that these decisions should be
made by each business on a case-by-case
basis. USTOA also commented that the
Department should not dictate the
contractual terms of credits or vouchers.
DOT Responses:
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(1) Validity Period and Transferability
The Department has considered
airlines’ arguments against requiring
non-expiring travel credits and vouchers
and is convinced that although the nonexpiring feature would provide
consumers the maximum flexibility to
use the credits or vouchers, the
difficulty for airlines to manage and
track these technically perpetual
liabilities is not trivial. The Department,
however, disagrees with airlines’
suggestion that a one-year validity
period is adequate to ensure that
consumers have sufficient time to use
the credits and vouchers. Although
airlines suggest that the one-year period
can be extended if a public health
emergency extends beyond a year, the
Department believes that the extension
of travel credits or vouchers imposes
administrative burdens to airlines and
potential confusion and uncertainty to
consumers. As such, we are adopting a
final rule requiring that the travel
credits or vouchers issued under the
conditions related to a serious
communicable disease be valid for at
least five years from the date of the
issuance. The Department views a fiveyear validity period to be a sufficient
timeframe to ensure passengers who are
affected by a serious communicable
disease can use the credits or vouchers
for future travel while not imposing
undue burdens on airlines. The
Department also notes that the five-year
validity period is consistent with the
Credit Card Accountability
Responsibility and Disclosure Act of
2009 (CARD Act) 94 and the CFPB
regulation implementing the CARD Act,
12 CFR 1005.20, which require that the
expiration date of a store gift card or gift
certificate cannot be earlier than 5 years
after the date on which the gift
certificate was issued. Although the
travel credits or vouchers issued
pursuant to this final rule are not ‘‘gift
certificates’’ or ‘‘store gift cards’’ that are
subject to the CARD Act and the CFPB
rule,95 the Department views that
adopting a similar restriction on the
validity period as the CARD Act and its
implementing rule benefits consumers
by avoiding potential confusions arising
from different regulatory entities’
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94 Public
Law 111–24, May 22, 2009.
CARD Act and the CFPB implementing
rule definitions for ‘‘gift certificate’’ and ‘‘store gift
card’’ require that the instruments must be
purchased or issued ‘‘on a prepaid basis’’ ‘‘in
exchange for payment.’’ As the travel credits or
vouchers under this final rule are not purchased or
issued on a prepaid basis in exchange for payment,
they are not considered ‘‘gift certificate’’ or ‘‘store
gift card’’ that are subject to the CARD Act and the
CFPB rule in 12 CFR 1005.20.
95 The
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regulations on electronic financial
documents issued by businesses.
Further, the Department is requiring
that the credits or vouchers issued
under this final rule be transferrable to
address concerns from numerous
consumers regarding the situations
relating to a serious communicable
disease that make them unable able to
use the travel credit or voucher due to
their age, health condition, or other
reasons. For example, in complaints
received by the Department during the
COVID–19 pandemic, some elderly
passengers with a severe underlying
health condition expressed that given
their ages and the medical conditions
they have, air travel will not be an
activity that they would consider in the
future even with the COVID–19 public
health emergency coming to an end.
Also, infrequent travelers who booked
travel for a specific event that was
canceled due to a serious communicable
disease expressed concerns that they
have no use for the credits or vouchers
because they are not likely to have the
need to travel in the foreseeable future.
The Department views these concerns as
reasonable grounds for requiring the
travel credits or vouchers be
transferrable so the air transportation
that these consumers invested their
money in can be utilized by others of
their choosing before expiring.
The Department is not convinced by
the airlines’ arguments that
transferability will invite and increase
fraud. The initial issuance of the credits
and vouchers under this rule are subject
to conditions airlines are permitted to
impose, including documentation proof
for eligibility. Once they are issued to
eligible consumers, whether the eligible
consumers choose to redeem the credits
or vouchers on their own or transfer to
another individual would not make a
difference to the airlines financially. We
are also not troubled by a secondary
market made possible by the
transferability feature of the credits or
vouchers in which consumers who
obtained the credits or vouchers on
legitimate grounds can trade them with
other consumers in order to recoup the
value, or the partial value, they paid
into the airline tickets. To comply with
the transferability requirement, airlines
may simply eliminate the requirement
that only the passengers in the original
bookings may use the credits or
vouchers, similar to a store gift card that
can be redeemed by anyone.
(2) Value of Credits and Vouchers and
Service Fee for Processing Credits and
Vouchers
The Department is adopting the
proposal to require airlines to issue
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credits or vouchers in a value equal to
or greater than the fare, including
carrier-imposed fees and surcharges and
government-imposed taxes and fees that
are not refunded to consumers. To the
extent other Federal agencies require
airlines to refund certain governmentimposed fees to consumers when the air
transportation is not used by
consumers,96 carriers may deduct the
amounts of those fees that have been
refunded to consumers from the value of
the travel credits or vouchers. With
regard to prepaid ancillary service fees,
the Department notes that the situation
discussed here is distinguishable from
the situations in which airlines are
required to refund ancillary service fees
for services that are not provided. In the
situations here, the passenger chooses
not to travel, and as a result, the prepaid ancillary services are not used. As
such, the Department is not requiring
airlines to refund the ancillary service
fees in the form of the original payment,
and instead, we are requiring that the
value of the ancillary service fees be
included in the value of travel credits or
vouchers issued.
Based on the comments received, the
Department is adopting the proposal to
allow airlines to impose a processing fee
for issuing travel credits or vouchers to
eligible passengers, provided that the
fee is assessed on a per-passenger basis
and appropriate disclosures regarding
the existence and amount of the fee
were made to the consumer prior to the
consumer purchasing the airline ticket.
Given that the airline is not initiating
the change that is resulting in the need
for a credit or voucher, the Department
believes that this strikes the right
balance between ensuring that
consumers receive travel credits and
vouchers when they do not travel
because of government restrictions or
health concerns related to a serious
communicable disease and avoiding
having airlines bear all the cost for
something that was also outside their
control. If the Department determines
that airlines’ processing fees appear to
circumvent the intent behind the
requirement for consumers to obtain
credits or vouchers in equal or greater
value as the fare, the Department will
consider whether further action is
appropriate.
(3) Restrictions and Disclosures
With respect to limitations,
restrictions, and conditions on the
96 See, e.g., the Transportation Security
Administration’s regulation provides that any
changes by the passenger to the itinerary are subject
to additional collection or refund of the September
11th Security service fee by the direct air carrier or
foreign air carrier, as appropriate. 49 CFR 1510.9(b).
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credits or vouchers issued under this
section, the Department is adopting the
proposed prohibition on unreasonable
terms that would materially reduce the
value of the credits and vouchers to
consumers as compared to the original
purchase prices of the airline tickets.
The Department confirms its tentative
view stated in the NPRM that
unreasonable terms include severe
restrictions on travel date, time, or
routes, a requirement that a voucher can
only be used on one booking and that
any residual value would be void
afterwards, a restriction that the voucher
can only be used to cover the base fare
of a new booking and not taxes and fees
or ancillary service fees, a requirement
that redeeming the credits or vouchers
would be subject to a rebooking fee or
a change fee 97 that reduces the value of
the voucher or credit applicable to the
new ticket, or a restriction limiting the
rebooking to certain class(es) of fares
such as business class or first class. A
restriction on the travel date, time, or
routes is severe when the restriction
eliminates a substantial number of
choices passenger may have for
rebooking and is a case-by-case analysis.
A restriction on what airline(s) the
credit or voucher can be used to book
with, on the other hand, would not be
viewed as unreasonable as long as the
credit or voucher allows, at a minimum,
rebooking on the airline for the original
ticket. Further, for material restrictions,
limitation, and conditions on the use of
the credits and vouchers that are not
deemed unreasonable, the final rule
require airlines provide clear disclosure
to consumers at the time of issuing
credits or vouchers.
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10. Consumer Rights After Acceptance
of Travel Vouchers and Credits
The NPRM: The Department
described its tentative view that if an
airline cancels or makes a significant
change to a flight after a passenger has
already requested to cancel his or her
flight due to government restrictions or
health concerns and received a credit or
voucher, then the airline or ticket agent
should not be required to replace that
voucher with a refund. The Department
stated that it is overly burdensome and
costly for airlines to apply refund
eligibility to itineraries that have
97 The NPRM’s proposed rule text suggests that
carriers may charge an ‘‘administrative fee’’ for
rebooking tickets using the credits or vouchers.
After further consideration, especially considering
that the rule allows carriers to charge a processing
fee for issuing the credits or vouchers, the
Department believes that it is unreasonable for
consumers to be charged again when redeeming the
credits or vouchers. Therefore, the final rule
determines that charging an administrative fee at
the time of rebooking is an unreasonable condition.
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already been cancelled pursuant to
passengers’ requests prior to the
airline’s decision to cancel or
significantly change the flight. The
Department cautioned that its Office of
Aviation Consumer Protection has the
authority to investigate whether an
airline or a ticket agent has engaged in
an unfair or deceptive practice when it
fails to inform a passenger making a
request to cancel the itinerary that the
passenger is eligible for a refund, if the
airline or ticket agents knows or should
have known at the time that a flight has
been cancelled or significantly changed.
Comments Received: IATA supported
the Department’s view that if an airline
cancels or makes a significant change to
a flight after a passenger has already
requested to cancel his or her a travel
itinerary and received a credit or
voucher, then the airline or ticket agent
should not be required to replace that
voucher with a refund.
DOT Response: The Department
maintains its view that an airline or
ticket agent should not be required to
replace a voucher with a refund when
an airline cancels or makes a significant
change to a flight after a passenger has
already requested to cancel his or her
flight due to government restrictions or
health concerns and received a credit or
voucher.
V. Contract of Carriage Provisions Must
Not Contradict Requirements of This
Final Rule
The Ticket Refund NPRM proposed to
include in the new 14 CFR part 260 a
provision that would require airlines to
ensure that the terms or conditions in
their contracts of carriage are consistent
with the proposed regulation, including
the proposals pertaining to airline ticket
refunds due to airline-initiated
cancellation or significant change, and
the proposals pertaining to refunds of
baggage fees for significantly delayed
bags and refunds of ancillary service
fees for services that are not provided.
In response to this proposal, Travelers
United urged the Department to require
airlines to incorporate their customer
service plans in their contract of
carriage. Several individual commenters
noted that the language that airlines use
in their contract of carriage restrict the
rights of passengers. In this final rule,
the Department makes clear that
carriers’ inclusion of terms and
conditions in their contract of carriage
that are inconsistent with the carriers’
obligations to provide refunds as
specified in this rule will be considered
an unfair and deceptive practice. In
addition, the Department prohibits
carriers’ inclusion of terms and
conditions in their contract of carriage
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that are inconsistent with the carriers’
obligations to provide travel credits or
vouchers to travelers affected by a
serious communicable disease as
required by this final rule. Reasonable
consumers would be misled with
inaccurate information in airlines’
contract of carriage regarding their right
to a refund, travel credits, vouchers, or
other compensation. This information is
material to consumers as it could result
in significant financial loss because
consumers would incorrectly believe
that they cannot obtain refunds, travel
credits, or vouchers that they are
entitled to receive under DOT rules. The
Department has long considered airlines
with terms and conditions in their
contract of carriage that are inconsistent
with requirements imposed on them to
be engaging in an unfair and deceptive
practice. The Department is not
requiring carriers to include their
customer service plans in their contracts
of carriage as suggested by Traveler’s
United but will monitor consumer
complaints in this area and determine if
we need to revisit this issue in the
future.
VI. Refunding Airline Tickets to
Passengers Affected by a Serious
Communicable Disease Due to Airlines
or Ticket Agents Receiving Significant
Government Financial Assistance
To address the concerns by
consumers, consumer advocacy
groups,98 and members of Congress 99
that it is fundamentally unfair for
airlines receiving government financial
assistances during the COVID–19 to
refuse to provide refunds to consumers
who were not able to travel due to the
COVID–19 pandemic, the Department
proposed that if a covered airline or
ticket agent receives significant
government financial assistance during
a public health emergency, the airline or
ticket agent would be required to
provide refunds to consumers who are
otherwise eligible for travel credits or
vouchers under the NPRM. The
Department further proposed a set of
procedures to determine whether a
covered entity has received ‘‘significant
government financial assistance,’’ which
98 See, e.g., Airlines: Give Us Refunds, Not
Vouchers, petition by Consumer Reports, https://
action.consumerreports.org/20200420_finance_
airlinerefundpetition. Consumer Reports, Letter to
Sect. Buttigieg, https://advocacy.consumerreports.
org/wp-content/uploads/2021/11/CR-letter-to-SecButtigieg-consumer-complaints-11-18-21-FINAL2.pdf.
99 See, e.g., Senator Edward J, Markey and
Richard Blumenthal press release, https://www.
markey.senate.gov/news/press-releases/senatorsmarkey-and-blumenthal-blast-airlines-inadequateresponse-to-their-request-to-eliminate-expirationdates-for-all-pandemic-related-flight-credits.
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includes: applying relevant factors such
as the size of the entity, revenue, the
amount of government financial
assistance accepted, and total
enplanements to the entities; issuing
tentative determinations on which
entities have received significant
government assistance; and finalizing
the determinations based on public
comments.
The Department received numerous
comments from airline and ticket agent
representatives, expressing their
concerns about the Department’s
authorities for this proposal as well the
practicality of the proposed procedure
to determine which entity has received
‘‘significant government financial
assistance.’’ Consumers and their
representatives supported this
requirement but did not articulate the
reason(s) for their support of this
proposal. Although the Department
continues to view that airlines and
ticket agents receiving significant
financial assistance from governments
during a public health emergency
should do more to assist airline
passengers who are impacted by the
public health emergency, we have
concluded that more time is needed to
consider the information provided to
the Department and to determine
whether additional information is
needed for a final rule that is beneficial
to consumers. As such, we are deferring
whether to finalize this proposal to
another rulemaking action.
VII. Effective Date and Compliance
Periods
The NPRM: The Ticket Refund NPRM
proposed that any final rule adopted
would take effect 90 days after the
publication in the Federal Register. The
Department invited comments on
whether 90 days is the appropriate
interval for implementation of the
proposed requirements if adopted. The
Ancillary Fee Refund NPRM did not
propose an effective date for provisions
finalized under that NPRM.
Comments Received: On the Ticket
Refund NPRM, a number of airline
commenters asserted that the proposed
90-day implementation timeframe is
inadequate, reasoning that airlines need
additional time to revise refund policies
regarding when a passenger is entitled
to a refund and to train their staff. They
also commented that additional time is
needed to adjust IT systems to reflect
how vouchers should be granted. Some
airlines suggested that a 180-day
implementation period is warranted
while others argued that an
implementation period of no shorter
than one year should be granted. ASTA
also asserted that ticket agents will need
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additional time to assess how a final
rule would impact them and decide
whether they want to continue to sell
airline tickets as merchants of record
and make necessary adjustments
accordingly. ASTA further requested
that the Department clarify how it
interprets the application of the rule’s
effective date with respect to ticket sale
date, travel date, and the date a refund
request is submitted.
On the Ancillary Fee Refund NPRM,
the NPRM did not propose an
implementation period. A4A and IATA
in their comments requested that the
Department provide one-year for
airlines to implement the requirements
relating to refunding baggage fees for
delayed bags and ancillary service fees
for services not provided. A4A specified
that if the Department requires
‘‘automatic’’ refunds for baggage fees,
carriers will need significant amount of
time to work with distribution channel
stakeholders to build, test, and
implement new payment and refund
channels beyond airfare. IATA also
commented that additional time is
needed due to the complexity of airline
systems and procedure and the potential
involvement of multiple airlines and
distribution channels. The ACPAC
recommended that all final provisions
of the final rule be effective after 90
days of its publication in the Federal
Register.100
DOT Responses: The Department has
considered the comments and
determined that an extended
implementation period for certain
provisions is warranted. First and
foremost, although this final rule will
become effective 60 days after its
publication in the Federal Register,
carriers and ticket agents will have
different implementation periods for
different provisions. For provisions
regarding ticket refunds due to airline
cancellation or significant change,
refunds of baggage fees for significantly
delayed bags, and refunds of ancillary
service fees when services are not
provided, regulated entities will have
six months from the date of publication
of the final rule, or October 28, 2024, to
implement the relevant requirements.
The Department views the six-month
implementation period as appropriate
for airlines and ticket agents to modify
their policies, procedures and IT
systems and to train staff on the relevant
100 The
three members representing consumer
rights advocacy groups, State Attorneys General,
and airports support this recommendation. The
member representing A4A opposes this
recommendation, stating that some of the
provisions, if finalized, will require airlines to make
significant changes and the 90-day implementation
period is not adequate to implement those changes.
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requirements on ticket and ancillary fee
refunds (including refunding fees for
significantly delayed checked bags). The
Department considers the six months
compliance period to be necessary for
carriers and ticket agents to establish or
enhance processes and procedures to
communicate with one another to
comply with these requirements.
For the provision regarding issuing
travel credits or vouchers to passengers
who are affected by a serious
communicable disease, carriers will
have 12 months from the date of the
final rule’s Federal Register publication,
or April 28, 2025, to fully implement
the requirements. The Department
believes that this implementation period
is sufficient for carriers to revise IT
systems for the issuance, tracking, and
redemption of travel credits or vouchers
meeting the regulatory requirements, to
establish procedures with respect to
requesting and reviewing supporting
medical documentations from
passengers, and to train staff with regard
to providing customer service on related
matters.
VIII. Severability
This final rule includes four major
components that enhance protections of
airline passengers (ticket refunds due to
airline cancellation or significant
change, baggage fee refunds for
significantly delayed bags, ancillary
service fee refunds for services not
provided, and consumer protections for
airline passengers affected by a serious
communicable disease), each of which
is issued pursuant to separate and
independent legal authorities and
operates independently on its own.
Were any component of this final rule
stayed or invalidated by a reviewing
court, the components that remained in
effect would continue to provide vital
protections to airline passengers. The
implementation of each component and
the consumer protection provided by
each component do not hinge on other
components of the rule. Therefore, each
of the four components of the final rule
are severable. In the event of a stay or
invalidation of any part of any rule, or
of any rule as it applies to certain
regulated entities, the Department’s
intent is to otherwise preserve the rule
to the fullest possible extent.
Regulatory Analyses and Notices
A. Executive Order 12866 (Regulatory
Planning and Review) and DOT
Regulatory Policies and Procedures and
Executive Order 13653 (Improving
Regulation and Regulatory Review)
The final rule meets the threshold for
a significant regulatory action as defined
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in section (3)(f)(1) of Executive Order
(E.O.) 12866, ‘‘Regulatory Planning and
Review,’’ as amended by E.O. 14094,
‘‘Modernizing Regulatory Review,’’
because it is likely to have an annual
effect on the economy of $200 million
or more, as adjusted by OMB pursuant
to section 3(f)(1). Table X summarizes
the expected economic impacts of the
final rule.
The lack of universal definitions for
‘‘cancellation’’ and ‘‘significant itinerary
change’’ has created inconsistency
among carriers in granting consumers
airline ticket refunds. The final rule will
reduce these inconsistencies by defining
these terms and will reduce the
resources consumers need to expend to
obtain the refunds they are owed.
Consumer time savings are estimated to
be about $3.8 million annually.
This rule implements a 2016 statutory
mandate and requires that airlines
refund baggage fees when a bag is
delivered to a consumer with a delay of
12 hours or more for domestic flights, 15
hours for international flights with a
duration of 12 hours or less, and 30
hours for international flights with a
duration of over 12 hours. The final rule
also implements a 2018 mandate and
requires airlines to refund fees collected
for ancillary services they fail to
provide. The expected economic
impacts of these provisions consist of
$16.0 million annually in increased
refunds to consumers and $7.1 million
annually in administrative costs for the
airlines.
The final rule requires airlines to
provide transferable travel credits or
vouchers, valid for at least five years, to
passengers who cancel travel for reasons
related to a serious communicable
disease. The impacts of this requirement
depend upon many factors, including
32827
the presence and nature of a pandemic,
whether airlines can enforce basic
economy change restrictions though
collecting documentation from
consumers regarding whether they have
or may have a serious communicable
disease, and the value assigned to a case
of avoided disease. Expected societal
benefits are from infected air passengers
canceling planned air travel due the
option of receiving the five-year travel
credit and the reduction in exposure of
uninfected passengers to serious
contagious disease. Estimated annual
costs would be $3.4 million outside of
a pandemic or $482.0 million during a
pandemic. While data to quantify
benefits are insufficient, a break-even
analysis illustrates the thresholds for the
monetized value for a case of avoided
disease and the travel credit
effectiveness rates that could yield
benefits that exceed costs.
TABLE 3—SUMMARY OF ANNUAL ECONOMIC IMPACTS
[Millions of 2022 dollars]
Cancelled flight and significant change of flight itinerary
Benefits (+):
Consumer time savings .....................................................................................
Costs (¥) ..................................................................................................................
Net benefits (costs) ...................................................................................................
Transfers:
Increased airline ticket refunds (airlines to consumers) ....................................
$3.8
de minimis
$3.8
Unquantified.
Refunds of fees for significantly delayed bags and ancillary fees not provided
Benefits (+) ................................................................................................................
Costs (¥):
Administrative .....................................................................................................
Net benefits (costs) ...................................................................................................
Transfers:
Baggage fee refunds (airlines to consumers) ...................................................
n/a
$7.1
($7.1)
$16.0
Vouchers or travel credits for passengers affected by a serious communicable disease
Benefits (+):
Reduction in cases of serious communicable disease .....................................
Costs (¥):
Documentation ...................................................................................................
Net benefits (costs) ...................................................................................................
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B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980
(RFA) (5 U.S.C. 601, et seq.) requires
Federal agencies to review regulations
and assess their impact on small entities
unless the agency determines that a rule
is not expected to have a significant
economic impact on a substantial
number of small entities. This final rule
would have some impact on air carriers
and ticket agents that qualify as small
entities. To assess the impact of this
final rule, the Department has prepared
a final regulatory flexibility analysis
(FRFA), as set forth in this section.
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Unquantified.
$3.4 (non-pandemic) or $482.0 (pandemic).
Unquantified.
As required by the Regulatory
Flexibility Act (5 U.S.C. 601, et. seq., the
FRFA includes:
• A statement of the need for and
objectives of the rule;
• A statement of the significant issues
raised by the public comments in
response to the initial regulatory
flexibility analysis, a statement of the
assessment of the agency of such issues,
and a statement of any changes made in
the proposed rule as a result of such
comments;
• The response of the agency to any
comments filed by the Chief Counsel for
Advocacy of the Small Business
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Administration (SBA Advocacy) in
response to the proposed rule, and a
detailed statement of any change made
to the proposed rule in the final rule as
a result of the comments;
• A description and estimate of the
number of small entities to which the
rule will apply or an explanation of why
no such estimate is available;
• A description of the projected
reporting, recordkeeping and other
compliance requirements of the rule,
including an estimate of the classes of
small entities which will be subject to
the requirement and the type of
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professional skills necessary for
preparation of the report or record; and
• A description of the steps the
agency has taken to minimize the
significant economic impact on small
entities consistent with the stated
objectives of applicable statutes,
including a statement of the factual,
policy, and legal reasons for selecting
the alternative adopted in the final rule
and why each one of the other
significant alternatives to the rule
considered by the agency which affect
the impact on small entities was
rejected.
A statement of the need for and
objectives of the rule is provided
elsewhere in the preamble to this final
rule and not repeated here. Similarly,
the Department provides in the
COMMENTS AND RESPONSES section
a statement of the significant issues
raised by the public comments in
response to the initial regulatory
flexibility analysis or the economic
impacts of the rule and explains how
DOT assessed these issues and made
changes, if any, to the final rule as a
result. DOT did not receive any
comments from the Chief Counsel for
Advocacy of the Small Business
Administration (SBA Advocacy) in
response to the proposed rule, the initial
regulatory flexibility analysis, or the
economic impacts of the rule.
Small Entities Affected
The proposed rule would affect air
carriers and ticket agents that qualify as
small entities. For air carriers, the
Department defines small entities based
on the standard published in 14 CFR
399.73. An air carrier is a small entity
if it provides air transportation
exclusively with small aircraft, defined
as any aircraft originally designed to
have a maximum passenger capacity of
60 seats or less or a maximum payload
capacity of 18,000 pounds or less. In
2022, 24 air carriers meeting these
criteria reported passenger traffic data to
the Bureau of Transportation
Statistics.101 These carriers reported
operating revenues in 2018 ranging from
$1 million to $84 million.
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TABLE 4—AFFECTED SMALL AIRLINES
40-Mile Air.
Air Excursions LLC.
Alaska Central Express.
Bering Air Inc.
Empire Airlines Inc.
101 Bureau of Transportation Statistics. ‘‘T1: U.S.
Air Carrier Traffic and Capacity Summary by
Service Class.’’ https://www.transtats.bts.gov/
Fields.asp?gnoyr_VQ=FJH. Small entities have a
‘‘CarrierGroupNew’’ code of 5. Accessed Nov. 15,
2023.
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TABLE 4—AFFECTED SMALL
AIRLINES—Continued
FOX AIRCRAFT, LLC.
Grant Aviation.
Iliamna Air Taxi.
Island Air Service.
J&M Alaska Air Tours, Inc. (Alaska Air Transit).
Junipogo, LLC (70 North Air).
Kalinin Aviation LLC (Alaska Seaplanes).
Katmai Air.
Maritime Helicopters, Inc.
New Pacific Airlines (Ravn Alaska).
Paklook Air, Inc (Airlift Alaska, Yute Commuter).
PM Air, LLC.
Ryan Air.
Scott Air LLC (Island Air Express).
Smokey Bay Air Inc.
Spernak Airways Inc.
Venture Travel LLC (Taquan Air Service).
Warbelow.
Wright Air Service
Source: BTS Air Carrier Summary Data
(Form 41 and 298C Summary Data). ‘‘T1: U.S.
Air Carrier Traffic and Capacity Summary by
Service Class.’’ BTS Air Carrier Report (Form
298C–F1).
For ticket agents, the Department
defines small entities based on the size
standards published by the Small
Business Administration in 13 CFR
121.201. These size standards use the
North American Industry Classification
System (NAICS), which does not have a
category specifically for ticket agents.
Instead, the closest corresponding
industry is travel agencies (NAICS code
561510). Establishments in this industry
primarily act as agents in selling travel,
tour, and accommodation services to the
public and commercial clients. An
establishment in this industry is a small
entity if it has total annual revenues
below $22 million. This amount
excludes funds received in trust for an
unaffiliated third party, such as
bookings or sales subject to
commissions, but includes commissions
received.
Data from the 2017 Economic Census
provide an estimate of the number of
small-entity ticket agents in the United
States.102 This survey, conducted every
five years by the US Census Bureau, is
the official national measure of
businesses and includes information on
employment and revenue by industry.
The survey groups firms by NAICS code
and by revenue size, with $25 million
being the closest threshold amount to
the small-entity standard of $22 million.
In 2017, 7,827 travel agency
establishments had annual revenues of
less than $25 million (Table 5). Not all
travel agencies serve as ticket agents,
102 U.S. Census Bureau. 2022. ‘‘Economic
Census.’’ https://www.census.gov/programssurveys/economic-census.html.
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however, making the number an overestimate of affected small entities. The
number is also an over-estimate because
some of the firms may have annual
revenues greater than $22 million.
TABLE 5—TRAVEL AGENCY
ESTABLISHMENTS BY REVENUE, 2017
Annual revenue
Firms
Less than $100,000 ......................
$100,000 to $249,999 ..................
$250,000 to $499,999 ..................
$500,000 to $999,999 ..................
$1,000,000 to $2,499,999 ............
$2,500,000 to $4,999,999 ............
$5,000,000 to $9,999,999 ............
$10,000,000 to $24,999,999 ........
1,470
1,774
1,441
1,290
1,069
462
221
100
Total .......................................
7,827
Notes: NAICS code 561510.
Source: U.S. Census Bureau, 2017 Economic Census.
Compliance Requirements and Costs
As described in more detail elsewhere
in the preamble of this final rule, the
Department provides definitions and
refund requirements for cancelled flight
and significant change of flight
itinerary. The Department also specifies
requirements for significantly delayed
bags and ancillary fees that passengers
pay for that are not provided. The
Department also establishes
requirements for airlines to provide
vouchers or travel credits to passengers
whose travel plans are disrupted by
circumstances beyond their control
related to a serious communicable
disease.
As described in the Regulatory Impact
Analysis for the final rule, the primary
costs for the final rule that would be
incurred by business are administrative
costs from baggage and ancillary fee
refund requirements and those related
to the collection of documentation of
serious contagious disease from
passengers. Some small carriers that
qualify as small businesses operate
flights as part of a code-share
arrangement with a larger carrier. In
these cases, the larger carrier collects
the baggage fees and other ancillary
service fees and would be responsible
for the refunds under the proposal.
Therefore, overall costs to small
businesses are likely lower than if small
carriers collected the fees in all cases,
though the Department acknowledges
that some small carriers still collect the
fees and would therefore be responsible
for any refunds due as a result of the
rule. As described in the baggage fee
refund analysis, estimated annual
refund payments and administrative
costs for carriers ($9.3 million + $3.9
million) would account for about 0.2
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percent of airlines’ annual baggage fee
revenues ($6.8 billion in 2022, the year
used in the analysis). The Department
acknowledges that the annual bag fee
revenues for small carriers are likely
lower than those of large carriers, but
their estimated annual refund payments
and administrative costs are also likely
lower than those of large carriers. As
baggage handling and tracking
technologies improve, we expect that
the percentage of delayed bags affected
by the rule and resulting economic
effects will decrease further.
The number of passengers who would
submit documentation to small carriers
is difficult to predict, but a hypothetical
example illustrates the potential
economic costs associated with the
documentation for small air carriers. In
2022, small air carriers in the United
States made over 1.02 million passenger
trips.103 If passengers needed to restrict
travel for 5% of the trips and provide
airlines with documentation, passengers
would submit approximately 51,000
forms. We assume that a customer
service representative working for an
airline or ticket agent would need an
average of 5 minutes (0.083 hours) to
review documentation and request
additional documentation if needed, for
a total of approximately 4,236 hours.
To estimate the value of the time air
carriers would spend reviewing
documentation, we use median wage
data from the Bureau of Labor Statistics.
For customer service representatives,
the fully loaded wage rate is $25.68,
using a $18.16 median hourly wage for
customer services representatives in
May 2022,104 multiplied by 1.41 to
account for employer benefit costs. The
total estimated annual cost of the forms
would be approximately $109,000, or
about $4,500 per small carrier on
average. This amounts to about 0.1
percent of total operating revenue per
small carrier on average. Some of these
costs, or additional costs, could be
borne by small ticket agents.
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Regulatory Alternatives and
Minimization of Impacts on Small
Entities
As described in the following
paragraphs, several alternatives
considered by the Department have had
would different impacts on small
businesses. The Department considered
103 Bureau of Transportation Statistics. Air Carrier
Statistics (Form 41 Traffic)—All Carriers: T–100
Segment (All Carriers). United States Department of
Transportation. https://www.transtats.bts.gov/
Fields.asp?gnoyr_VQ=FMG. Accessed 10 Jan 2024.
104 Bureau of Labor Statistics. ‘‘Occupational
Employment and Wage Estimates, May 2022:
National estimates for customer service
representatives.’’ https://www.bls.gov/oes/current/
oes434051.htm.
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these alternatives and describes in the
paragraphs that follow the steps the
Department has taken to minimize the
significant economic impact on small
entities consistent with the stated
objectives of applicable statutes,
including a statement of the reasons for
selecting the alternative adopted in the
final rule and why the Department
rejected other significant alternatives
that affect the impact on small entities.
One alternative considered as part of
the proposed rule was to require cash
refunds to consumers as a condition of
accepting significant government
assistance. After considering the
comments received, the Department
concluded that more time is needed to
consider the information provided and
determine whether additional
information is needed for a final rule
that benefits consumers. Therefore, the
Department did not adopt this
alternative, and the final rule will
therefore have a smaller impact on small
businesses.
The Department also considered an
alternative to limit the scope of the rule
to specifying definitions for ‘‘significant
change in itinerary’’ and ‘‘cancellation.’’
The Department rejected this
alternative, however, based on its
conclusion that removing the portion of
the rule related to serious
communicable diseases would
undermine the Department’s goal to
protect consumers’ financial interests
when the disruptions to their travel
plans were caused by public health
concerns beyond their control. The
Department also believes that protecting
consumers’ financial interests would
further incentivize persons not to travel
if they have or may have a serious
communicable disease. Nonetheless, in
adopting the final rule to protect
consumers affected by a serious
communicable disease, the Department
imposes the requirements only on
airlines but not ticket agents, including
ticket agents that qualify as small
businesses, thereby decreasing the
impact on these small entities. For
airlines that qualify as small businesses,
although they are required to provide
travel credits or vouchers to consumers
who choose not to travel to protect
themselves or others from a serious
communicable disease, they are not
required to accept a consumer’s selfdiagnosis of a medical condition
consistent with public health guidance
issued by CDC, comparable agencies in
other countries, or WHO. The
Department views this change as a way
to reduce fraud and abuse and decrease
the impact on small airlines.
In determining what constitutes a
significant itinerary change, the
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32829
Department evaluated three alternative
timeframes for early departures or
delayed arrivals that would constitute a
significant itinerary change. The first
alternative reflects the timeframes set
forth in the proposed rule: three hours
for domestic itineraries and six hours
for international itineraries as the times
that would be considered significant. A
second alternative left the timeframes
for early departure and late arrival
undefined, essentially maintaining the
status quo. A third alternative
considered was to adopt a tiered
structure based upon such factors as
total travel time. The final rule adopts
the three- and six-hour timeframes from
the proposed rule. The Department
rejected the alternative of leaving the
timeframes undefined. While leaving
the timeframes undefined grants the
most flexibility to the airlines, it would
not achieve the same consistency as a
uniform standard, which is an objective
sought by this rulemaking. The
Department rejected a tiered approach
because of its complexity and potential
difficulties in implementation for
airlines as well comprehension on the
part of consumers.
With regard to the significant change
in flight itinerary because of a
downgrade in available amenities, the
proposed rule included aircraft changes
that lead to a significant downgrade of
available amenities or travel experiences
for all passengers. For the final rule,
except for a downgrade in the class of
service, the downgrade of available
amenities applies to passengers with
disabilities. The final rule clarifies that
it refers to travel on a substitute aircraft
that results in one or more accessibility
features needed by the passenger being
unavailable and changes in connecting
airport for persons with disabilities. The
Department altered the scope of
passengers covered because of the
ambiguity and subjectivity of what
constitutes significant downgrade in
amenities and travel experience. By
retaining applicability to persons with
disabilities, the final rule recognizes
that aircraft substitutions can result in
discomfort and inconveniences when an
accessible feature needed by a passenger
with a disability is unavailable.
Another alternative considered by the
Department and adopted in the final
rule is to extend the length of baggage
delivery delay for long-haul
international flights (flights with a
duration of more than 12 hours) under
which a refund of baggage is required,
from the 25-hour standard proposed in
the NPRM to the 30-hour standard
adopted in the final rule. This final rule,
however, also shortened the length of
baggage delivery delay for other
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international flights (flights with a
duration of 12 hours or less) under
which a refund of baggage fee is
required, from the 25-hour standard
proposed in the NPRM to the 15-hour
standard adopted in the final rule. The
final rule decreases the impact on small
carriers operating long-haul
international flights and increases the
impact on small carriers operating
shorter international flights. The
Department made the changes based on
its view that setting a different standard
for long-haul international flights
incentivizes carriers to deliver the
delayed bags as soon as possible to
avoid refunding baggage fee, which
benefits consumers and airlines. The
Department further views that a shorter
timeframe for delivering delayed bags
on shorter international flights is
beneficial to consumers and ensures
that the baggage delivery delay standard
is appropriate considering the ability of
carriers to transport the delayed bags on
its next available flight, other carriers’
flights, or through courier services.
The Department also considered
whether to finalize the proposed
requirement that airlines and ticket
agents give non-expiring travel credits
or vouchers to passengers who do not
travel due to government restrictions or
advice from a medical professional
related to a serious communicable
disease. Although the non-expiring
feature would provide consumers the
maximum flexibility to use the credits
or vouchers, the Department recognizes
the difficulty in managing and tracking
them indefinitely. Thus, the Department
adopted a final rule requiring that the
travel credits be valid for at least five
years from the date of the issuance. The
Department views a five-year validity
period a sufficient timeframe to ensure
passengers who are affected by a serious
communicable disease can use the
credits while reducing burdens on
airlines.
C. Executive Order 13132 (Federalism)
This final rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13132 (‘‘Federalism’’). This notice does
not propose any provision that: (1) has
substantial direct effects on the States,
the relationship between the national
government and the States, or the
distribution of power and
responsibilities among the various
levels of government; (2) imposes
substantial direct compliance costs on
State and local governments; or (3)
preempts State law. States are already
preempted from regulating in this area
by the Airline Deregulation Act, 49
U.S.C. 41713. Therefore, the
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consultation and funding requirements
of Executive Order 13132 do not apply.
D. Executive Order 13175
This final rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13175 (‘‘Consultation and Coordination
with Indian Tribal Governments’’).
Because none of the provisions finalized
in this rule would significantly or
uniquely affect the communities of the
Indian tribal governments or impose
substantial direct compliance costs on
them, the funding and consultation
requirements of Executive Order 13175
do not apply.
E. Paperwork Reduction Act
This final rule imposes a new
collection of information that would
require approval by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(Pub. L. 104–13, 49 U.S.C. 3501 et seq.
The Department has sought approval
from OMB for the collection of
information established in this final
rule. The Department will publish a
separate notice in the Federal Register
announcing OMB approval of the new
collection and advising the public of the
OMB control number associated with
the new collection.
The new collection of information
established in this final rule relates to
allowing airlines to require passengers
requesting travel credits or vouchers
because their travel is affected by a
serious communicable disease to
provide documentation. Specifically,
the Department allows airlines to
require passengers wishing to cancel a
flight itinerary that is still operated to
provide documentation demonstrating
that that they are prohibited from travel
or are required to quarantine for a
substantial portion of the trip by a
governmental entity in relation to a
serious communicable disease, or that
they are advised by a licensed treating
medical professional not to travel to
protect themselves or others from a
serious communicable disease. For this
information collection, a description of
the respondents and an estimate of the
annual recordkeeping and periodic
reporting burden are set forth below:
Requirement to Prepare and Submit to
Airlines Documentations Demonstrating
a Passenger is Eligible for Travel Credits
or Vouchers Due to a Reason Related to
A Serious Communicable Disease.
Respondents: Passengers prohibited
or required to quarantine for a
substantial portion of the trip by a
governmental entity in relation to a
serious communicable disease,
passengers advised by a licensed
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treating medical professional not to
travel by air because they have or may
have contracted a serious communicable
disease such that their travel would
pose a threat to the health of others, and
passengers advised by a licensed
treating medical professional not to
travel to protect themselves from a
serious communicable disease during a
public health emergency.
Number of Respondents: The number
of respondents would vary greatly
depending on whether there is a public
health emergency and the magnitude of
that public health emergency. When
there is a public health emergency with
a similar magnitude of the COVID–19
pandemic, the number of respondents
could potentially be very high.
According to data provided by A4A, the
airlines provided exchanges of tickets to
about 180 million passengers between
March 2020 and February 2021.
Industry further suggests in comments
on the proposed rule that about 15
percent of consumers who need to make
ticket changes might opt for a travel
credit instead of an immediate ticket
change. Thus, we estimate that of the
180 million consumers provided ticket
changes in the baseline, 27 million
would be the number of respondents
who need to submit the documentation
to receive the five-year travel credit
under the final rule.105 For purposes of
this PRA burden analysis, we assume
that the number of medical assistants
developing the documentation and
airline customer service representatives
reviewing the documentation equal the
number of customers providing
responses.106
Estimated Annual Burden on
Respondents: We estimate that each
respondent would need 30 minutes (0.5
hours) to obtain a documentation from
a medical professional per response, per
year. We also estimate that a medical
assistant would need 15 minutes (0.25
hours) to provide consultation to the
passenger or to prepare the
documentation. We further estimate that
a customer service representative
working for an airline would need an
105 In the NPRM, we estimated 5.58 million
respondents based on the Department’s data
showing that in 2020, U.S. airlines enplaned 558
million fewer passengers in domestic air
transportation than in 2019. We estimated that if
1% of this reduction was due to passengers unable
or are advised to not travel for a qualifying reason
and required by airlines and ticket agents to submit
documentation, there would be 5.58 million
respondents. For the final rule, we increased this
number based on the data provided by A4A as a
reasonable upper bound, because not all of the 15%
of passengers who seek a travel credit or voucher
would be entitled to one under this final rule.
106 This number may be an overestimate because
the same airline customer service representatives
likely review multiple documentation submissions.
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average of 5 minutes (0.083 hours) to
review the documentation and request
additional documentation if needed.
Passengers would spend a total of
approximately 13.5 million hours per
year (0.5 hours × 27 million passengers)
to obtain the documentation. Medical
assistants would spend a total of 6.75
million hours per year (0.25 hours × 27
million forms) to prepare the forms.
Airline customer service representatives
would spend approximately 2,241,000
hours (0.083 hours × 27 million forms)
per year to review the documentation.
To calculate the hourly value of time
spent on the documentation, we used
median wage data from the Bureau of
Labor Statistics as of May 2022.
Respondents would obtain, present, and
submit the documentation on their own
time without pay and we estimate the
value of this uncompensated activity
using a post-tax wage estimate of $18.48
per hour ($22.26 median hourly wage
for all occupations minus a 17%
estimated tax rate). For medical
32831
assistants, we used a fully loaded wage
of $25.94 ($18.40 hourly wage
multiplied by 1.41 to account for
employer benefit costs.) For customer
service representatives, we use an
estimate of $25.61 per hour ($18.16
median hourly wage times a wage
multiplier of 1.41). In the scenario that
there is a public health emergency, the
total annual estimated documentation
costs of the forms would be
approximately $482 million (Table
6).107
TABLE 6—EXAMPLE ANNUAL COST ESTIMATE FOR DOCUMENTATION
Group
People restricting travel .......................................................
Medical assistants ................................................................
Customer service representatives .......................................
ddrumheller on DSK120RN23PROD with RULES3
Hours per
form
Forms
27,000,000
27,000,000
27,000,000
0.5
0.25
0.083
Total hours
13,500,000
6,750,000
2,241,000
Hourly time
value
$18.48
25.94
25.61
Estimated
costs
(millions)
$249,480,000
175,095,000
57,392,010
The Department has identified a
number of disclosure requirements in
this final rule subject to approval by the
Office of Management and Budget under
the PRA. These requirements are: (1) as
specified in 14 CFR 259.5(b)(6), carriers
must disclose to consumers in their
customer service plans that consumers
are entitled to a refund if this is the case
when offering travel credits, vouchers,
or other compensation in lieu of
refunds, and to disclose any material
restrictions, conditions, or limitations
on travel credits, vouchers, or other
compensation offered, regardless of
whether consumers are entitled to a
refund; (2) as specified in 14 CFR
259.5(b)(7), carriers must include in
their customer service plans a statement
regarding compliance with the
requirements of part 262 regarding
vouchers for consumers in
circumstances relating to serious
communicable diseases; (3) as specified
in 14 CFR 260.4(d), carriers that failed
to provide ancillary services paid for by
a passenger must notify another carrier
that is responsible for refunding the
ancillary service fee about the service
failure; (4) as specified in 14 CFR
260.5(c), carriers that receive MBRs
must notify another carrier that is
responsible for refunding baggage fees
about the baggage delay; (5) as specified
in 14 CFR 260.6(d), carriers that set a
deadline for consumers to respond to
alternative transportation offers must
adopt and post on their websites their
policies regarding how to treat
consumers not responding by the
deadlines; (6) as specified in 14 CFR
260.6(e), carriers must notify affected
consumers about cancellation or
significant changes, rights to refunds,
offers of alternatives, and any deadline
to respond; (7) as specified in 14 CFR
260.6(f), carriers must notify ticket
agents that are the merchants of record
for the ticket sales whether a consumer
is eligible for a refund; (8) as specified
in 14 CFR 262.8, carriers must disclose
material restrictions, conditions, or
limitations on vouchers provided to
consumers in relation to a serious
communicable disease; (9) as specified
in 14 CFR 399.80(l), ticket agents must
disclose to consumers that they are
entitled to a refund if this is the case
when offering travel credits, vouchers,
or other compensation in lieu of
refunds, and must also disclose any
material restrictions, conditions, or
limitations on travel credits, vouchers,
or other compensation offered,
regardless of whether consumers are
entitled to a refund; and (10) as
specified in 14 CFR 399.80(l), ticket
agents must disclose at the time of ticket
purchase any service fees that are not
refundable. DOT will request comment
on and seek approval from OMB for
these disclosure requirements and
publish separate notice in the Federal
Register advising of the OMB Control
Number(s) when OMB approves the
information collection(s).
Notwithstanding any other provisions
of law, no person shall be subject to
penalty for failing to comply with a
collection of information if the
collection of information does not
display a currently valid OMB control
number.
107 The estimated costs calculated here assume
that there is a public health emergency. The
Regulatory Impact Analysis accompanying this rule
estimated the cost to be about $3.4 million when
there is not a public health emergency.
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F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (UMRA) requires, at 2 U.S.C.
1532, that agencies prepare an
assessment of anticipated costs and
benefits before issuing any rule that may
result in the expenditure by State, local,
and tribal governments, in the aggregate,
or by the private sector, of $100 million
or more (adjusted annually for inflation)
in any one year. As described elsewhere
in the preamble, this final rule may have
an effect on the private sector that
exceeds this threshold. The UMRA
permits agencies to provide the
assessment required by UMRA as part of
any other assessment prepared in
support of the rule, and the Department
has provided the assessment required by
UMRA within the RIA prepared in
support of the final rule.
G. National Environmental Policy Act
The Department has analyzed the
environmental impacts of this action
pursuant to the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C.
4321 et seq.) and has determined that it
is categorically excluded pursuant to
DOT Order 5610.1C, Procedures for
Considering Environmental Impacts (44
FR 56420, October 1, 1979). Categorical
exclusions are actions identified in an
agency’s NEPA implementing
procedures that do not normally have a
significant impact on the environment
and therefore do not require either an
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environmental assessment (EA) or
environmental impact statement (EIS).
See 40 CFR 1508.4. Paragraph 4.c.6.i of
DOT Order 5610.1C categorically
excludes ‘‘[a]ctions relating to consumer
protection, including regulations.’’ This
final rule relates to consumer
protection. The Department does not
anticipate any environmental impacts,
and there are no extraordinary
circumstances present in connection
with this rulemaking.
Signed this 1st day of April, 2024, in
Washington DC.
Peter Paul Montgomery Buttigieg,
Secretary of Transportation.
List of Subjects
14 CFR Part 259
Air Carriers, Consumer Protection,
Reporting and Recordkeeping
Requirements.
14 CFR Part 260
Air carriers, Consumer protection.
14 CFR Part 262
Air carriers, Consumer protection.
14 CFR Part 399
Administrative practice and
procedure, Air carriers, Air rates and
fares, Air taxis, Consumer protection,
Small businesses.
For the reasons set forth in the
preamble, the Department amends title
14 CFR Chapter II as follows:
PART 259—ENHANCED
PROTECTIONS FOR AIRLINE
PASSENGERS
1. The authority citation for 14 CFR
part 259 continues to read as follows:
■
Authority: 49 U.S.C. 40101(a)(4),
40101(a)(9), 40113(a), 41702, 41708, 41712,
and 42301.
2. Amend § 259.3 by adding the
definitions for ‘‘Business days,’’
‘‘Prompt refunds,’’ and ‘‘Serious
communicable disease,’’ in alphabetical
order to read as follows:
■
ddrumheller on DSK120RN23PROD with RULES3
§ 259.3
Definitions.
Business days means Monday through
Friday excluding Federal holidays in
the United States.
*
*
*
*
*
Prompt refunds means refunds made
within 7 business days of a refund
becoming due as required by 14 CFR
374.3 for credit card purchases, and
within 20 calendar days of a refund
becoming due for cash, check, debit
card, or other forms of purchases.
Serious communicable disease means
a communicable disease as defined in
42 CFR 70.1 that can cause serious
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health consequences (e.g., breathing
problems, organ damage, neurological
difficulties, death) and can be easily
transmitted by casual contact in an
aircraft cabin environment (i.e., easily
spread to others in an aircraft cabin
through general activities of passengers
such as sitting next to someone, shaking
hands, talking to someone, or touching
communal surfaces). For example, the
common cold is readily transmissible in
an aircraft cabin environment but does
not have severe health consequences.
AIDS has serious health consequences
but is not readily transmissible in an
aircraft cabin environment. Both the
common cold and AIDS would not be
considered serious communicable
diseases for purposes of this part. SARS
is readily transmissible in an aircraft
cabin environment and has severe
health consequences. SARS would be
considered a serious communicable
disease for purposes of this part.
*
*
*
*
*
■ 3. Amend § 259.5 by revising
paragraphs (a), (b)(3), and (b)(5);
redesignating paragraphs (b)(6) through
(b)(12) as paragraphs (b)(8) through
(b)(14), and adding new paragraphs
(b)(6) and (b)(7); and revising the newly
designated paragraphs (b)(8) and (b)(11)
to read as follows:
§ 259.5
Customer Service Plan.
(a) Adoption of Plan. Each covered
carrier must adopt a Customer Service
Plan applicable to its scheduled flights
as specified in paragraphs (b)(1) through
(14) of this section and adhere to the
plan’s terms.
(b) * * *
*
*
*
*
*
(3) Delivering baggage on time,
including making every reasonable
effort to return mishandled baggage
within 12 hours for domestic flights and
within 15 or 30 hours for international
flights consistent with the requirement
of 14 CFR 260.5, compensating
passengers for reasonable expenses that
result due to delay in delivery as
required by 14 CFR part 254 for
domestic flights and as required by
applicable international treaties for
international flights, and reimbursing
passengers for any fee charged to
transport a bag if that bag is significantly
delayed or lost as required by 14 CFR
260.5;
*
*
*
*
*
(5) Providing prompt refunds in the
original form of payment (i.e., money is
returned to an individual using
whatever payment method the
individual used to make the original
payment, such as a check, credit card,
debit card, cash, or airline miles) when
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ticket or ancillary service fee refunds,
including checked bag fee refunds, are
due pursuant to 14 CFR part 260 unless
the consumer agrees to receive the
refunds in a different form of payment
that is a cash equivalent payment as
defined in 14 CFR 260.2. Carriers may
not retain a processing fee for issuing
refunds that are due;
(6) Disclosing that consumers are
entitled to a refund if that is the case
when offering alternative transportation,
travel credits, vouchers, or other
compensation in lieu of refunds
consistent with the requirement in 14
CFR 260.7. Disclosing any material
restrictions, conditions, or limitations
on travel credits, vouchers, or other
compensation offered, regardless of
whether consumers are entitled to a
refund as described in 14 CFR 260.8 and
14 CFR 262.8.
(7) Providing, upon request, travel
credits or vouchers that are transferrable
and do not expire for at least five years
from the date of issuance to a consumer
due to a serious communicable disease
impacting travel as described in 14 CFR
part 262.
(8) Properly accommodating
passengers with disabilities as required
by part 382 of this chapter and as set
forth in the carrier’s policies and
procedures and properly refunding
passengers with disabilities and
individuals in the same reservation as
the individual with a disability who do
not want to continue travel without the
individual with a disability as required
by 14 CFR 260.6(c);
*
*
*
*
*
(11) Disclosing refund policies as
required by 14 CFR part 260,
cancellations policies, frequent flyer
rules, aircraft seating configuration, and
lavatory availability on the selling
carrier’s website, and upon request,
from the selling carrier’s telephone
reservations staff;
*
*
*
*
*
■
4. Add part 260 to read as follows:
PART 260—REFUNDS FOR AIRLINE
FARE AND ANCILLARY SERVICE
FEES
Sec.
260.1 Purpose.
260.2 Definitions.
260.3 Applicability.
260.4 Refunding fees for ancillary services
that consumers paid for but that were not
provided.
260.5 Refunding fees for significantly
delayed or lost bags.
260.6 Refunding fare for flights cancelled or
significantly changed by carriers.
260.7 Notifying consumer of refund right
before offering travel credit or voucher.
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260.8 Disclosing material restrictions,
conditions, and limitations.
260.9 Providing prompt refunds.
260.10 Contract of carriage provisions
related to refunds.
Authority: 49 U.S.C. 40101(a), 41702, and
41712.
§ 260.1
Purpose.
The purpose of this part is to ensure
that carriers promptly refund consumers
for: (1) fees for ancillary services related
to air travel that consumers paid for but
were not provided; (2) fees to transport
checked bags that are lost or
significantly delayed; and (3) airfare for
a flight that is cancelled or had a
significant change of flight itinerary
where the consumer does not accept the
change to the flight itinerary, alternative
transportation, airline voucher or credit,
or other compensation offered by the
carrier.
ddrumheller on DSK120RN23PROD with RULES3
§ 260.2
Definitions.
As used in this part:
Air carrier means a citizen of the
United States undertaking by any
means, directly or indirectly, to provide
air transportation.
Ancillary service means any optional
service related to air travel that a
covered carrier provides for a fee,
beyond passenger air transportation.
Such services may include, but are not
limited to, transport of checked or carryon baggage, advance seat selection,
access to in-flight entertainment
programs or Wi-Fi, in-flight beverages,
snacks, meals, pillows and blankets,
seat upgrades, and lounge access.
Automatic refund means issuing a
refund to a consumer without waiting to
receive an explicit refund request, when
the consumer’s right to a refund is
undisputed because the contracted
service was not provided and either the
consumer rejected the alternative
offered or no alternative was offered.
Break in journey means any deliberate
interruption by a passenger of a journey
between a point in the United States
and a point in a foreign country where
there is a stopover at a foreign point
scheduled to exceed 24 hours. If the
stopover is 24 hours or less, whether it
is a break in journey depends on various
factors such as whether the segment
between two foreign points and the
segment between a foreign point and the
United States were purchased in a
single transaction and as a single ticket/
itinerary, whether the segment between
two foreign points is operated or
marketed by a carrier that has no
codeshare or interline agreement with
the carrier operating or marketing the
segment to or from the United States,
and whether the stopover at a foreign
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point involves the passenger picking up
checked baggage, leaving the airport,
and continuing the next segment after a
substantial amount of time.
Business days means Monday through
Friday, excluding Federal holidays in
the United States.
Cancelled flight or flight cancellation
means a covered flight with a specific
flight number scheduled to be operated
between a specific origin-destination
city pair that was published in the
carrier’s Computer Reservation System
at the time of the ticket sale but not
operated by the carrier.
Cash equivalent means a form of
payment that can be used like cash,
including but not limited to a check, a
prepaid card, funds transferred to a
consumer’s bank account, funds
provided through digital payment
methods (e.g., PayPal, Venmo), or a gift
card that is widely accepted in
commerce. It is not cash equivalent if
consumers bear the burden for
transaction, maintenance, or usage fees
related to the payment.
Checked bag means a bag, special
item (e.g., musical instrument or a pet),
or sports equipment (e.g., golf clubs)
that was provided to a covered carrier
by or on behalf of a passenger for
transportation in the cargo compartment
of a scheduled passenger flight. A
checked bag includes a gate-checked bag
and a valet bag.
Class of service means seating in the
same cabin class such as First, Business,
Premium Economy, or Economy class,
which is defined based on seat location
in the aircraft and seat characteristics
such as width, seat recline angles, or
pitch (including the amount of
legroom).
Covered carrier means an air carrier or
a foreign air carrier operating to, from,
or within the United States, conducting
scheduled passenger service.
Covered flight means a scheduled
flight operated or marketed by a covered
carrier to, from, or within the United
States, including itineraries with brief
and incidental stopover(s) at a foreign
point without a break in journey.
Foreign air carrier means a person,
not a citizen of the United States,
undertaking by any means, directly or
indirectly, to provide foreign air
transportation.
Individual with a disability has the
same meaning as defined in 14 CFR
382.3.
Merchant of record means the entity
(carrier or ticket agent) responsible for
processing payments by consumers for
airfare or ancillary services or products
(including the transport of checked
bags), as shown in the consumer’s
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32833
financial charge statements, such as
debit or credit card charge statements.
Prompt refunds means refunds made
within 7 business days of a refund
becoming due as required by 14 CFR
374.3 for credit card purchases and
within 20 calendar days of a refund
becoming due for cash, check, debit
card, or other forms of purchases.
Significant change of flight itinerary
or significantly changed flight means a
change to a covered flight itinerary
made by a covered carrier where as the
result of the change:
(1) The consumer is scheduled to
depart from the origination airport three
hours or more for domestic itineraries
and six hours or more for international
itineraries earlier than the original
scheduled departure time;
(2) The consumer is scheduled to
arrive at the destination airport three
hours or more for domestic itineraries or
six hours or more for international
itineraries later than the original
scheduled arrival time;
(3) The consumer is scheduled to
depart from a different origination
airport or arrive at a different
destination airport;
(4) The consumer is scheduled to
travel on an itinerary with more
connection points than that of the
original itinerary;
(5) The consumer is downgraded to a
lower class of service;
(6) The consumer who is an
individual with a disability is scheduled
to travel through one or more
connecting airports different from the
original itinerary; or
(7) The consumer who is an
individual with a disability is scheduled
to travel on substitute aircraft on which
one or more accessibility features
needed by the customer are unavailable.
Significantly delayed checked bag
means a checked bag not delivered to or
picked up by the consumer or another
person authorized to act on behalf of the
consumer within 12 hours of the last
flight segment’s arrival for domestic
itineraries, within 15 hours of the last
flight segment’s arrival for international
itineraries with a non-stop flight
segment between the United States and
a foreign point that is 12 hours or less
in duration, and within 30 hours of the
last flight segment’s arrival for
international itineraries with a non-stop
flight segment between the United
States and a foreign point that is more
than 12 hours in duration. The 15-hour
and 30-hour standards apply to
domestic segments of international
itineraries.
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Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules and Regulations
Applicability.
This part applies to: covered carriers
that are the merchants of record;
covered carriers that operate the flight
or, for multiple-carrier itineraries,
covered carriers that operate the last
segment of a flight where a ticket agent
is the merchant of record for a checked
bag fee; and covered carriers that fail to
provide an ancillary service (other than
checked bag service) for which the
consumer paid where a ticket agent is
the merchant of record for an ancillary
service fee other than checked bag fee.
ddrumheller on DSK120RN23PROD with RULES3
§ 260.4 Refunding fees for ancillary
services that consumers paid for but that
were not provided.
(a) A covered carrier that is the
merchant of record shall provide a
prompt and automatic refund to a
consumer for any fees it collected from
the consumer for ancillary services if
the service was not provided through no
fault of the consumer (e.g., prepaid
ancillary service not utilized by the
consumer because of flight cancellation,
significant change, or oversale situation;
service not provided because of aircraft
substitution, equipment malfunction,
etc.). If a ticket agent is the merchant of
record for a checked bag fee and the
checked bag service was not provided
(or was significantly delayed) through
no fault of the consumer, the carrier that
operated the flight, or for multiplecarrier itineraries, the carrier that
operated the last segment of the
consumer’s itinerary is responsible for
providing a prompt and automatic
refund of the checked bag fee, consistent
with § 260.5. If a ticket agent is the
merchant of record for fees for all other
ancillary services, the carrier that
operated the flight and failed to provide
the service through no fault of the
consumer is responsible for providing a
prompt and automatic refund.
(b) In situations where the ancillary
service the consumer paid for (other
than the service of transporting a
checked bag) is not available for all the
passengers who paid for that service
(e.g., Wi-Fi not available for all
passengers on a flight, lounge access not
available for all passengers on a certain
date), a carrier’s obligation under
paragraph (a) of this section to provide
a prompt and automatic refund begins
when the information about the
unavailability of the service is known by
the carrier that failed to provide the
service, and, if applicable, relayed as
provided in paragraph (d) of this section
to the carrier responsible for providing
a prompt refund as specified in
paragraph (a) of this section.
(c) In situations where the ancillary
service the consumer paid for (other
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than the service of transporting a
checked bag) is not available to an
individual or several individuals, rather
than to all the passengers who paid for
that service, a carrier’s obligation under
paragraph (a) of this section to provide
a prompt and automatic refund begins
when the consumer affected by the
service failure notifies the operating
carrier that failed to provide the
ancillary service about the
unavailability of the service and that
information has been confirmed and, if
applicable, relayed as provided in
paragraph (d) of this section to the
carrier responsible for providing a
prompt refund as specified in paragraph
(a) of this section. Notification of the
unavailability of the ancillary service by
a consumer is considered a request for
a refund.
(d) In situations where a carrier is the
merchant of record for a fee for an
ancillary service and the carrier that
operates the flight where the ancillary
service was not provided are different
entities, the operating carrier that failed
to provide the ancillary service must
timely notify the carrier that is the
merchant of record about the
unavailability of the ancillary service.
Notification by the operating carrier as
set forth in this paragraph is necessary
for the obligation to provide a prompt
refund of ancillary service fees in
paragraphs (b) and (c) of this section to
apply. The obligation set forth in this
paragraph for the operating carrier to
timely notify the carrier that is the
merchant of record does not apply when
the failure to provide service relates to
transporting checked bags. Timely
notification requirements pertaining to
refunds for fees charged to transport
checked bags are set forth in § 260.5(c).
§ 260.5 Refunding fees for significantly
delayed or lost bags.
A covered carrier that is the merchant
of record or, if a ticket agent is the
merchant of record, the covered carrier
that operated the flight or the last flight
segment in a multiple-carrier itinerary,
must provide a prompt refund to a
consumer of any fee charged for
transporting a lost bag or a significantly
delayed checked bag, as defined in
§ 260.2 of this part and determined
according to paragraph (a) of this
section, subject to the conditions in
paragraphs (b) and (c) of this section.
(a) Determining the length of delay for
the bag. For the purpose of determining
whether a checked bag is significantly
delayed as defined in § 260.2, the length
of delay is calculated from the time the
passenger is given the opportunity to
deplane from a flight at the passenger’s
final destination airport (the beginning
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of the delay) to the time that the carrier
has delivered the bag to a location
agreed upon by the passenger and
carrier (e.g., passenger’s home or hotel)
or the time that the bag has been picked
up by the passenger or another person
acting on behalf of the passenger at the
passenger’s final destination airport (the
end of the delay).
(b) Notification by passenger about
lost or significantly delayed bag. A
covered carrier does not have an
obligation to provide a refund of the fee
for a lost or significantly delayed
checked bag unless a passenger files a
Mishandled Baggage Report (MBR) for
the lost or delayed bag with the carrier
that operated the flight, or for multiplecarrier itineraries, the carrier that
operated the last segment of the
consumer’s itinerary.
(c) Notification by carrier that
received an MBR about lost or
significantly delayed checked bag.
Except when the carrier responsible for
providing a prompt refund for a baggage
fee as specified in this section is the
same carrier that received the MBR, a
covered carrier that received the MBR
must timely notify the carrier
responsible for providing a prompt
refund that the bag has been lost or
significantly delayed when this is the
case. A covered carrier’s obligation to
provide a prompt refund of a baggage
fee for a lost bag or a significantly
delayed checked bag as defined in
§ 260.2 is conditioned upon the carrier
that received the MBR notifying the
carrier responsible for providing a
prompt refund that the bag has been lost
or significantly delayed.
(d) Automatic refunds. An automatic
refund of a bag fee is due when a
checked bag is significantly delayed as
determined according to paragraph (a)
of this section, the passenger has filed
an MBR as provided in paragraph (b) of
this section, and, if applicable,
notification has been provided by the
carrier that received the MBR as set
forth in paragraph (c) of this section.
(e) Amount of the refund. The amount
of the refund issued to a consumer must
be a value equal to or greater than the
fee that the consumer paid to transport
his/her checked bag.
(1) For carriers that adopt an escalated
baggage fee scale for multiple bags
checked by one passenger, the amount
of baggage fee refund issued to the
passenger can be determined based on
the unique identifier assigned to the
significantly delayed or lost bag that
correlates to the baggage fee charged for
that bag at the time of checking. If there
is no such unique identifier assigned,
carriers must refund the highest per bag
fee or fees charged for the multiple bags.
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(2) For a carrier that offers a baggage
fee subscription program where
consumers can pay a subscription fee
that covers fees for checked bags for a
specified period, the carrier must refund
the lowest amount of the baggage fee the
carrier charges another passenger of
similar frequent flyer status and in the
same class of service without the
subscription when a passenger
subscribing to the program has a
significantly delayed or lost bag.
(f) Exemptions from the refund
obligation. A covered carrier is
exempted from the obligation to refund
the fee for a significantly delayed bag in
situations where the delay resulted
from:
(1) A passenger’s failure to pick up
and recheck a bag at the first
international entry point into the United
States as required by U.S. Customs and
Border Protection;
(2) A passenger’s failure to pick up a
checked bag that arrived on time at the
passenger’s ticketed final destination
due to the fault of the passenger if
documented by the carrier (e.g.,
passenger ended the travel before
reaching the final destination on the
itinerary—‘‘hidden city’’ itinerary, or
the passenger failed to pick up the bag
before taking a flight on a separate
itinerary); and
(3) A passenger’s voluntary agreement
to travel without the checked bag on the
same flight as described in paragraph (g)
of this section.
(g) Voluntary separation from bag. A
carrier may require a passenger who
fails to meet the minimum check-in
time requirement for a flight or is a
standby passenger for a flight (i.e., a
passenger who lacks a reservation on
that flight and is waiting at the gate for
a seat to be available on the flight) to
agree to a new baggage delivery date and
location in situations where the carrier
is unable to place the passenger’s
checked bag on that flight because of the
limited time available. The carrier must
not require the passenger to waive the
right to a refund of bag fees if the bag
is lost, the right to compensation for
damaged, lost, or pilfered bags, or the
right to incidental expenses
reimbursement arising from delayed
bags beyond the agreed upon delivery
date, consistent with the Department’s
regulation in 14 CFR part 254 and
applicable international treaties.
§ 260.6 Refunding fare for flights cancelled
or significantly changed by carriers.
(a) Carriers’ obligation to provide
prompt refunds. A covered carrier that
is the merchant of record must provide
a prompt and automatic refund of the
airfare (including all government-
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imposed taxes and fees and all
mandatory carrier-imposed charges) to a
consumer for a cancelled flight or a
significantly changed flight as set forth
in paragraph (b) of this section.
(b) Automatic refunds. Automatic
refunds of the airfare are due to a
consumer when the consumer’s right to
a refund is undisputed because a carrier
cancels a flight or makes a significant
change of flight itinerary as described in
paragraphs (b)(1) through (b)(6) of this
section:
(1) A carrier does not offer alternative
transportation for a canceled flight or
travel credits, vouchers, or other
compensation in lieu of a refund to a
consumer (the date the flight was
canceled is considered the date the
consumer requested a refund).
(2) A carrier does not offer alternative
transportation for the significantly
changed flight or travel credits,
vouchers, or other compensation in lieu
of a refund to the consumer who
rejected a significantly changed flight
(the date the consumer rejects the
significantly changed flight itinerary is
considered the date the consumer
requested a refund);
(3) A carrier offers a significantly
changed flight or alternative
transportation for a significantly
changed or a canceled flight, or offers
travel credits, vouchers, or other
compensation in lieu of a refund to the
consumer, but the consumer rejects the
alternative transportation and
compensation offered (the date the
passenger rejects the offers is considered
the date the passenger requested a
refund);
(4) A carrier offers a significantly
changed flight or alternative
transportation for a significantly
changed or a canceled flight, but the
consumer does not respond to the offers
on or before a response deadline set by
the carrier as described in paragraph (d)
of this section and the consumer has not
accepted any offer for travel credits,
vouchers, or other compensation in lieu
of a refund, and the carrier’s policy is
to treat a lack of a response as a
rejection of the alternative
transportation offered (the date the
carrier-imposed deadline expired is
considered the date the consumer
requested a refund);
(5) A carrier does not offer the
consumer the options of traveling on a
significantly changed flight or traveling
on an alternative flight, but offers travel
credits, vouchers, or other
compensation in lieu of a refund to the
consumer, and the consumer does not
respond to the alternative compensation
offered within a reasonable time, in
which case the lack of a response is
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32835
deemed a rejection (the date the
reasonable time has passed as
determined by the carrier is considered
the date the consumer requested a
refund); or
(6) A carrier offers a significantly
changed flight or alternative
transportation for a significantly
changed or a canceled flight and offers
travel credits, vouchers, or other
compensation in lieu of a refund and
the carrier has not set a deadline to
respond, the consumer does not respond
to the alternatives offered, and the
consumer does not take the flight (the
date the alternative flight was operated
without the passenger on board is
considered the date the passenger
requested a refund).
(c) Individuals with a Disability. A
carrier that is the merchant of record
must provide a prompt refund to an
individual with a disability upon
notification by the individual with a
disability that he/she does not want to
continue travel because of the
significant changes described in
paragraphs (c)(1) through (c)(3) of this
section. The carrier must also provide a
prompt refund to any individuals in the
same reservation as the individual with
a disability who do not want to continue
travel without the individual with a
disability in situations described in
§ 260(c)(1) through (c)(3).
(1) The individual with a disability is
downgraded to a lower class of service
that results in one or more accessibility
features needed by the individual
becoming unavailable.
(2) The individual with a disability is
scheduled to travel through one or more
connecting airports that are different
from the original itinerary.
(3) The individual with a disability is
scheduled to travel on a substitute
aircraft on which one or more
accessibility features available on the
original aircraft needed by the
individual are unavailable.
(d) Carrier-imposed response deadline
for alternative transportation. A carrier
may establish a reasonable deadline for
a consumer to accept or reject an offer
of a significantly changed flight or
alternative transportation following a
canceled flight or a significantly
changed flight itinerary. Carrier refund
obligations when a deadline is
established are as described in
paragraphs (d)(1) through (d)(3) of this
section.
(1) For a consumer who rejected the
offer of a significantly changed flight or
alternative transportation for a
significantly changed or a canceled
flight by the deadline established by the
carrier and has rejected any offer of
travel credit, voucher, or other
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compensation in lieu of a refund, the
carrier must provide a refund within 7
business days of the rejection date for
tickets purchased with credit cards and
within 20 calendar days of the rejection
date for tickets purchased with other
payments.
(2) A refund is not due to the
consumer if the offer of a significantly
changed flight or alternative
transportation for a significantly
changed or a canceled flight is accepted
by the deadline established by the
carrier, or if an offer of travel credit,
vouchers, or compensation in lieu of a
refund is accepted.
(3) A carrier that sets a deadline must
adopt and post on its website its policy
specifying whether, upon receiving no
response from the consumer at the
expiration of the deadline of the offer of
a significantly changed flight or offer of
an alternative transportation, the carrier
will deem that the offer of significantly
changed flight or alternative
transportation has been rejected by the
consumer and issue an automatic refund
for the airfare or will deem that the offer
of significantly changed flight or
alternative transportation has been
accepted by the consumer. A carrier
must not deem an offer for travel
credits, vouchers, or other
compensation in lieu of a refund to be
an acceptance when the consumer does
not respond to the offer. Carriers must
adhere to their published policies.
(e) Notification to consumers. (1)
Upon the occurrence of a flight
cancellation or a significant change, a
covered carrier must timely notify
affected consumers about the
cancellation or significant change,
consumers’ rights to a refund if this is
the case, any offer of alternative
transportation and other options such as
travel credits, vouchers, or other
compensation in lieu of a refund, any
deadline that the carrier imposes for
consumers to reject the offer of
significantly changed flight or
alternative transportation, and the
policy that the carrier has adopted
regarding consumers’ not responding by
any deadline established by the carrier,
as provided in paragraph (d) of this
section.
(2) For carriers that provide
notification subscription services to
passengers, notification under
paragraph (e)(1) of this section must be
provided through media that the carriers
offer and the subscribers choose,
including emails, text messages, and
push notices from mobile apps.
(f) Carriers’ obligation to notify ticket
agents. In situations where a ticket agent
is the merchant of record for the
transaction, after receiving a refund
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request by a consumer through the
ticket agent, the carrier that canceled or
significantly changed the flight must
inform the ticket agent without delay
whether the consumer is eligible for a
refund under this section (i.e., whether
the consumer has accepted the
significantly changed flight, the
alternative transportation, or other
compensation offered in lieu of
refunds). A ticket agent’s obligation to
provide a refund starts when the ticket
agent receives such notification from the
carrier.
§ 260.7 Notifying consumers of right to
refund when offering alternative
transportation or travel credit or voucher.
If a carrier offers alternative
transportation or alternative forms of
compensation such as travel credits,
vouchers, or other compensation in lieu
of the refund, the carrier must first
disclose to consumers that they are
entitled to a refund if that is the case.
A carrier must not deem a consumer to
have accepted an offer for travel credits,
vouchers, or other compensation in lieu
of a refund unless the consumer
affirmatively agrees to the alternative
form of compensation.
§ 260.8 Disclosing material restrictions,
conditions, or limitations.
A carrier must clearly disclose, no
later than at the time of voucher or
credit offer, any material restrictions,
limitations, or conditions on travel
credits, vouchers, or other
compensation, including but not limited
to validity period, advance purchase
requirement, capacity restrictions, and
blackout dates, regardless of whether
consumers are entitled to a refund.
§ 260.9
Providing prompt refunds.
When a refund of a fare or a fee for
an ancillary service, including a fee for
lost or significantly delayed checked
baggage, is due pursuant to this part, the
refund must be issued promptly in the
original form of payment (i.e., money is
returned to an individual using
whatever payment method the
individual used to make the original
payment, such as a check, credit card,
debit card, cash, or airline miles) unless
the consumer agrees to receive the
refunds in a different form of payment
that is a cash equivalent as defined in
§ 260.2. Carriers may not retain a
processing fee for issuing refunds that
are due.
§ 260.10 Contract of Carriage provisions
related to refunds.
A carrier must not include terms or
conditions in its contract of carriage
inconsistent with the carriers’
obligations as specified by this part.
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Any such action will be considered an
unfair and deceptive practice within the
meaning of 49 U.S.C. 41712.
■ 5. Add Part 262 to read as follows:
PART 262—TRAVEL CREDITS OR
VOUCHERS DUE TO A SERIOUS
COMMUNICABLE DISEASE
Sec.
262.1 Purpose.
262.2 Definitions.
262.3 Applicability.
262.4 Passengers entitled to receive travel
credits or vouchers.
262.5 Documentation.
262.6 Value of travel credits or vouchers.
262.7 Processing fee.
262.8 Disclosure of restrictions, conditions
or limitations.
262.9 Contract of carriage.
Authority: 49 U.S.C. 40101(a), 41702, and
41712.
§ 262.1
Purpose.
The purpose of this part is to ensure
that carriers provide travel credits or
vouchers, upon request, to consumers
who are restricted or prohibited from
traveling by a governmental entity due
to a serious communicable disease (e.g.,
as a result of a stay at home order, entry
restriction, or border closure) or are
advised by a licensed treating medical
professional consistent with public
health guidance issued by the U.S.
Centers for Disease Control and
Prevention (CDC) or the World Health
Organization (WHO) not to travel to
protect themselves or others from a
serious communicable disease.
§ 262.2
Definitions.
As used in this part:
Air carrier means a citizen of the
United States undertaking by any
means, directly or indirectly, to provide
air transportation.
Break in journey means any deliberate
interruption by a passenger of a journey
between a point in the United States
and a point in a foreign country where
there is a stopover at a foreign point
scheduled to exceed 24 hours. If the
stopover is 24 hours or less, whether it
is a break in journey depends on various
factors such as whether the segment
between two foreign points and the
segment between a foreign point and the
United States were purchased in a
single transaction and as a single ticket/
itinerary, whether the segment between
two foreign points is operated or
marketed by a carrier that has no
codeshare or interline agreement with
the carrier operating or marketing the
segment to or from the United States,
and whether the stopover at a foreign
point involves the passenger picking up
checked baggage, leaving the airport,
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and continuing the next segment after a
substantial amount of time.
Covered carrier means an air carrier or
a foreign air carrier operating to, from or
within the United States, conducting
scheduled passenger service.
Covered flight means a scheduled
flight operated or marketed by a covered
carrier to, from, or within the United
States, including itineraries with brief
and incidental stopover(s) at a foreign
point without a break in journey.
Licensed treating medical
professional means an individual,
including a physician, a nurse
practitioner, a physician’s assistant, or
other medical provider, who is licensed
or authorized under the law of a State
or territory in the United States or a
comparable jurisdiction in another
country to engage in the practice of
medicine to diagnose or treat a patient
for a health condition that is the reason
for the passenger to request a travel
credit or voucher under § 262.4(b) and
(c).
Merchant of record means the entity
(carrier or ticket agent) responsible for
processing payment by the consumer for
airfare or ancillary services or products,
as shown in the consumer’s financial
charge statements such as debit or credit
card charge statements.
Foreign air carrier means a person,
not a citizen of the United States,
undertaking by any means, directly or
indirectly, to provide foreign air
transportation.
Public health emergency has the same
meaning as defined in 42 CFR 70.1.
Serious communicable disease means
a communicable disease as defined in
42 CFR 70.1 that can cause serious
health consequences (e.g., breathing
problems, organ damage, neurological
difficulties, death) and can be easily
transmitted by casual contact in an
aircraft cabin environment (i.e., easily
spread to others in an aircraft cabin
through general activities of passengers
such as sitting next to someone, shaking
hands, talking to someone, or touching
communal surfaces). For example, the
common cold is readily transmissible in
an aircraft cabin environment but does
not have severe health consequences.
AIDS has serious health consequences
but is not readily transmissible in an
aircraft cabin environment. Both the
common cold and AIDS would not be
considered serious communicable
diseases for purposes of this part. SARS
is readily transmissible in an aircraft
cabin environment and has severe
health consequences. SARS would be
considered a serious communicable
disease for purposes of this part.
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§ 262.3
Applicability.
This part applies to all covered
carriers that are the merchant of record
for a covered flight or the operating
carrier of a covered flight when a ticket
agent is the merchant of record.
§ 262.4 Passengers entitled to receive
travel credits or vouchers.
A covered carrier as identified in
§ 262.3 must provide a transferrable
travel credit or voucher that does not
expire for at least five years from the
date of issuance to consumers described
in paragraphs (a) to (c) of this section.
(a) The consumer is prohibited from
travel to, from, or within the United
States or is required to quarantine at the
destination as shown on the consumer’s
itinerary for more than 50% of the
length of the trip (excluding travel
dates) because of a U.S. (Federal, State,
or local) or foreign government
restriction or prohibition (e.g., stay at
home order, entry restriction, border
closure, or quarantine notice) in relation
to a serious communicable disease. The
consumer must have purchased the
airline ticket before a public health
emergency was declared for the
origination or destination of the
consumer’s scheduled travel or, if there
is no declaration of a public health
emergency, before the government
prohibition or restriction applicable to
the origination or the destination of the
consumer’s scheduled travel was
imposed.
(b) There is a public health emergency
applicable to the origination or
destination of the consumer’s itinerary,
the consumer purchased the airline
ticket before the public health
emergency was declared, the consumer
is scheduled to travel during the public
health emergency, and the consumer is
advised by a licensed treating medical
professional not to travel by air to
protect himself or herself from a serious
communicable disease.
(c) Regardless of whether there is a
public health emergency, the consumer
is advised by a licensed treating medical
professional not to travel by air because
the consumer has or is likely to have
contracted a serious communicable
disease, and the consumer’s condition is
such that traveling on a commercial
flight would pose a direct threat to the
health of others.
§ 262.5
Documentation.
In the absence of an applicable
determination issued by the Department
of Health and Human Services that
requiring the documentation specified
in paragraphs (b) or (c) of this section is
not in the public interest, as a condition
for issuing the travel credits or vouchers
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32837
in § 262.4, carriers may require, as
appropriate, documentation specified in
paragraphs (a) to (c) of this section.
(a) For any consumer requesting a
travel credit or voucher because of a
government restriction or prohibition
pursuant to § 262.4(a), carriers may
require the consumer to provide the
applicable current government order or
other document demonstrating how the
government order prohibits the
consumer from travel to, from, or within
the United States as scheduled or
requires the consumer to quarantine for
more than 50% of the length of the
consumer’s scheduled trip at the
destination (excluding travel dates) as
shown on the passenger’s itinerary.
(b) For any consumer requesting a
travel credit or voucher to protect his or
her health pursuant to § 262.4(b),
carriers may require the consumer to
provide a valid medical certificate as set
forth in paragraphs (b)(1) and (b)(2) of
this section.
(1) For purposes of paragraph (b) of
this section, a medical certificate means
a written statement from a licensed
treating medical professional stating
that it is his/her professional opinion,
based on the medical condition of the
individual and current medical
knowledge on the relevant serious
communicable disease, including public
health guidance issued by CDC or WHO,
if available, that the individual should
not travel during the current public
health emergency by commercial air
transportation to protect his or her
health from a serious communicable
disease.
(2) To be valid, a medical certificate
under paragraph (b) of this section must
be dated after the declaration of the
relevant public health emergency and
no earlier than one year before the
scheduled travel date and include
information regarding the licensed
treating medical professional’s license
(the date of issuance, type of the license,
State or other jurisdiction in which the
license was issued).
(c) For any consumer requesting a
travel credit or a voucher to protect the
health of others pursuant to § 262.4(c),
carriers may require the consumer to
provide a valid medical certificate as set
forth in paragraphs (c)(1) through (c)(3)
of this section. For any consumer who
informed carriers that there is not
adequate time to obtain and submit a
valid medical certificate as set forth in
paragraphs (c)(1) through (c)(3) of this
section before the scheduled travel date,
carriers must allow submission of the
medical certificate within a reasonable
time after the scheduled travel date.
(1) For purposes of paragraph (c) of
this section, a medical certificate means
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a written statement from a licensed
treating medical professional stating
that it is his/her professional opinion,
based on the medical condition of the
individual and current medical
knowledge of the relevant serious
communicable disease, including public
health guidance issued by CDC or WHO,
if available, that the individual should
not travel by commercial air
transportation on the date of the
scheduled travel to protect the health of
others from a serious communicable
disease because the individual has or is
likely to have contracted a serious
communicable disease .
(2) To be valid, a medical certificate
under paragraph (c) of this section must
include information regarding the
licensed treating medical professional’s
license (the date of issuance, type of the
license, State or other jurisdiction in
which license was issued).
(3) For a medical certificate under
paragraph (c) of this section, carriers
may require that it be dated close to the
travel date, as determined based on the
current medical knowledge and
applicable public health guidance
issued by CDC or WHO regarding the
contagious period of the relevant serious
communicable disease.
§ 262.6
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§ 262.9
Contract of carriage.
A carrier shall not include terms or
conditions in its contract of carriage
inconsistent with the carriers’
obligations as specified by this part.
Any such action will be considered an
unfair and deceptive practice within the
meaning of 49 U.S.C. 41712.
Value of travel credits or vouchers.
Upon confirming a consumer’s
eligibility for a travel credit or voucher
pursuant to this paragraph, a carrier
must promptly issue the travel credit or
voucher with a value equal to or greater
than the fare (including governmentimposed taxes and fees and carrierimposed charges and prepaid ancillary
service fees for services not utilized by
the consumer). If a consumer has
obtained a refund of the September 11th
Security Fee or other governmentimposed taxes and fees, then those fee
amounts may be deducted from the
consumer’s travel credit or voucher.
Nothing in this section relieves the
carrier of its obligation to comply with
the requirements of other Federal
agencies relating to the refund of
government-imposed taxes and fees.
§ 262.7
vouchers, including a validity period
that is shorter than five years from the
date of issuance, a restriction on the
transferability of the credits or vouchers
to another individual, conditions that
severely restrict booking with respect to
travel date, time, route, or class of
service; a limitation that allows
redemption only in one booking and
renders any residual value void; or a
limitation that only allows the value of
the credits or vouchers to apply to the
base fare of a new booking but not
government-imposed taxes or fees,
carrier imposed fees, or ancillary service
fees. A carrier must clearly disclose, no
later than at the time of voucher or
credit issuance, any material
restrictions, limitations, or conditions
on the use of the credits and vouchers
that are not deemed unreasonable,
including but not limited to advance
purchase requirement or capacity
restrictions and blackout dates.
Processing fee.
A carrier may retain a processing fee
for issuing the travel voucher or credit,
as long as the fee is on a per-passenger
basis and the existence and amount of
the fee is clearly and prominently
disclosed to consumers at the time they
purchased the airfare.
§ 262.8 Disclosure of restrictions,
conditions or limitations.
A carrier shall not impose
unreasonable restrictions, conditions or
limitations on the travel credits or
VerDate Sep<11>2014
20:43 Apr 25, 2024
Jkt 262001
PART 399—STATEMENTS OF
GENERAL POLICY [AMENDED]
6. The authority citation for part 399
continues to read as follows:
■
Authority: 49 U.S.C. 40113(a), 41712,
46106, and 46107.
7. Amend § 399.80 by revising
paragraph (l) to read as follows:
■
§ 399.80 Unfair and deceptive practices of
ticket agents.
*
*
*
*
*
(l) Failing to make a prompt refund of
airfare (including all governmentimposed taxes and fees and all
mandatory carrier-imposed charges) to a
consumer, upon request, for a cancelled
flight or a significantly changed flight
itinerary if the consumer chooses not to
travel or accept compensation in lieu of
a refund in situations described in 14
CFR 260.6(b)(1) through (6) and 14 CFR
260.6(c)(1) through (3) when the ticket
agent is the merchant of record. Failing
to provide a prompt refund of airfare
(including all government-imposed
taxes and fees and all mandatory carrier
imposed charges), upon request, for a
significantly changed flight itinerary to
consumers on the same reservation as
an individual with a disability who does
not want to continue travel because of
a significant change described in
paragraph (l)(1)(vii)(E) of this section
PO 00000
Frm 00080
Fmt 4701
Sfmt 4700
related to downgrades or paragraph
(l)(1)(vii)(G) of this section related to
aircraft substitution which result in one
or more accessibility features needed by
the individual with a disability
becoming unavailable or because of the
significant change described in
paragraph (l)(1)(vii)(F) of this section
related to change in connecting airports.
A prompt refund is one that is made
within 7 business days of the ticket
agent receiving information from a
carrier as specified in 14 CFR 260.6(f),
as required by 12 CFR part 1026 for
credit card purchases, and within 20
calendar days of refund becoming due
for cash, check, debit card, or other
forms of purchases. Ticket agents must
provide the refunds in the original form
of payment (i.e., money is returned to
individual using whatever payment
method the individual used to make the
original payment, such as a check, a
credit card, a debit card, cash, or airline
miles), unless the consumer agrees to
receive the refund in another form of
payment that is cash equivalent. A
ticket agent may retain a service fee
charged when issuing the original ticket
to the extent that service is for more
than processing payment for a flight that
the consumer found. That fee must be
on a per-passenger basis and its
existence, amount, and the nonrefundable nature if that is the case
must be clearly and prominently
disclosed to consumers at the time they
purchase the airfare. Ticket agents may
offer alternative transportation, travel
credits, vouchers, or other
compensation in lieu of refunds, but
must first inform consumers that they
are entitled to a refund if that is the
case. Ticket agents must clearly disclose
any material restrictions, conditions,
and limitations on travel credits,
vouchers, or other compensation they
offer.
(1) For purposes of paragraph (l) of
this section, the following definitions
apply:
(i) Business days means Monday
through Friday, excluding Federal
holidays in the United States.
(ii) Cancelled flight or cancellation
means a flight with a specific flight
number scheduled to be operated
between a specific origin-destination
city pair that was published in a
carrier’s Computer Reservation System
at the time of the ticket sale but was not
operated by the carrier.
(iii) Cash equivalent means a form of
payment that can be used like cash,
including but not limited to a check, a
prepaid card, funds transferred to the
passenger’s bank account, funds
provided through digital payment
methods (e.g., PayPal, Venmo), or a gift
E:\FR\FM\26APR3.SGM
26APR3
Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules and Regulations
ddrumheller on DSK120RN23PROD with RULES3
card that is widely accepted in
commerce. It is not cash equivalent if
consumers bear the burden for
maintenance or usage fees related to the
payment.
(iv) Class of service means seating in
the same cabin class such as First,
Business, Premium Economy, or
Economy class, which is defined based
on seat location in the aircraft and seat
characteristics such as width, seat
recline angles, or pitch (including the
amount of legroom).
(v) Covered flight means a scheduled
flight to, from, or within the United
States.
(vi) Merchant of record means the
entity responsible for processing
payments by consumers for airfare, as
shown in the consumer’s financial
VerDate Sep<11>2014
20:43 Apr 25, 2024
Jkt 262001
charge statements such as debit or credit
card charge statements.
(vii) Significant change of flight
itinerary or significantly changed flight
means a change to a flight itinerary
consisting of covered flight(s) made by
a U.S. or foreign carrier where:
(A) The consumer is scheduled to
depart from the origination airport three
hours or more for domestic itineraries
and six hours or more for international
itineraries earlier than the original
scheduled departure time;
(B) The consumer is scheduled to
arrive at the destination airport three
hours or more for domestic itineraries or
six hours or more for international
itineraries later than the original
scheduled arrival time;
(C) The consumer is scheduled to
depart from a different origination
PO 00000
Frm 00081
Fmt 4701
Sfmt 9990
32839
airport or arrive at a different
destination airport;
(D) The consumer is scheduled to
travel on an itinerary with more
connection points than that of the
original itinerary;
(E) The consumer is downgraded to a
lower class of service;
(F) The consumer with a disability is
scheduled to travel through one or more
connecting airports that are different
from the original itinerary; or
(G) The consumer with a disability is
scheduled to travel on substitute aircraft
on which one or more accessibility
features needed by the passenger are
unavailable.
*
*
*
*
*
[FR Doc. 2024–07177 Filed 4–25–24; 8:45 am]
BILLING CODE 4910–9X–P
E:\FR\FM\26APR3.SGM
26APR3
Agencies
[Federal Register Volume 89, Number 82 (Friday, April 26, 2024)]
[Rules and Regulations]
[Pages 32760-32839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07177]
[[Page 32759]]
Vol. 89
Friday,
No. 82
April 26, 2024
Part III
Department of Transportation
-----------------------------------------------------------------------
14 CFR Parts 259, 260, 262, et al.
Refunds and Other Consumer Protections; Final Rule
Federal Register / Vol. 89 , No. 82 / Friday, April 26, 2024 / Rules
and Regulations
[[Page 32760]]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Parts 259, 260, 262, and 399
[Docket No. DOT-OST-2022-0089 and DOT-OST-2016-0208]
RIN 2105-AF04
Refunds and Other Consumer Protections
AGENCY: Office of the Secretary (OST), Department of Transportation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Department of Transportation (Department or DOT) is
requiring automatic refunds to consumers when a U.S. air carrier or a
foreign air carrier cancels or makes a significant change to a
scheduled flight to, from, or within the United States and the consumer
is not offered or rejects alternative transportation and travel
credits, vouchers, or other compensation. These automatic refunds must
be provided promptly, i.e., within 7 business days for credit card
payments and within 20 calendar days for other forms of payment. To
ensure consumers know when they are entitled to a refund, the
Department is requiring carriers and ticket agents to inform consumers
of their right to a refund if that is the case before making an offer
for alternative transportation, travel credits, vouchers, or other
compensation in lieu of refunds. Also, the Department is defining, for
the first time, the terms ``significant change'' and ``cancellation''
to provide clarity and consistency to consumers with respect to their
right to a refund. The Department is also requiring refunds to
consumers for fees for ancillary services that passengers paid for but
did not receive and for checked baggage fees if the bag is
significantly delayed. For consumers who are unable to or advised not
to travel as scheduled on flights to, from, or within the United States
because of a serious communicable disease, the Department is requiring
that carriers provide travel vouchers or credits that are transferrable
and valid for at least 5 years from the date of issuance. Carriers may
require consumers to provide documentary evidence demonstrating that
they are unable to travel or have been advised not to travel to support
their request for a travel voucher or credit, unless the Department of
Health and Human Services (HHS) publishes guidance declaring that
requiring such documentary evidence is not in the public interest.
DATES: This rule is effective June 25, 2024. Upon OMB approval of the
information collection established in this final rule, the Department
will publish a separate notice announcing the effective date of the
collection.
FOR FURTHER INFORMATION CONTACT: Clereece Kroha or Blane Workie, Office
of Aviation Consumer Protection, U.S. Department of Transportation,
1200 New Jersey Ave. SE, Washington, DC, 20590, 202-366-9342 (phone),
[email protected] or [email protected] (email).
SUPPLEMENTARY INFORMATION:
Executive Summary
(1) Purpose of the Regulatory Action
The purpose of this final rule is to ensure that consumers are
treated fairly when they do not receive service that they paid for or
are unable or advised not to travel because of a serious communicable
disease. This rule responds to Executive Order 14036 on Promoting
Competition in the American Economy (E.O. 14036), which was issued on
July 9, 2021.\1\ The Executive Order launched a whole-of-government
approach to strengthen competition and requires the Department to take
various actions to promote the interests of American consumers,
workers, and businesses.
---------------------------------------------------------------------------
\1\ Exec. Order No. 14036, 86 FR 36987 (Jul. 9, 2021).
---------------------------------------------------------------------------
Section 5, paragraph(m)(i)(C) of E.O. 14036 directs the Department
to submit a report to the White House Competition Council on the
progress of its investigatory and enforcement activities to address the
failure of airlines to provide timely refunds for flights cancelled as
a result of the COVID-19 pandemic. The Department submitted its report
to the White House in September 2021.\2\ In that report, the Department
explained that the lack of definition regarding cancelled or
significantly changed flights had resulted in inconsistency among
carriers on when passengers are entitled to a refund. The Department
also noted that approximately 20% of the refund complaints received
during the first 18 months of the COVID-19 pandemic involved instances
in which passengers with non-refundable tickets chose not to travel
given the COVID-19 pandemic and stated that it planned to address
protections for these consumers in a rulemaking.\3\
---------------------------------------------------------------------------
\2\ Report to the White House Competition Council: U.S.
Department of Transportation's Investigatory, Enforcement and Other
Activities Addressing Lack of Timely Airline Ticket Refunds
Associated with the COVID-19 Pandemic (Refund Report) (September 9,
2021) at https://www.transportation.gov/individuals/aviation-consumer-protection/dot-report-airline-ticket-refunds.
\3\ Refund Report at pages 11-12.
---------------------------------------------------------------------------
The Executive Order in Section 5, paragraph(m)(i)(D) further
directs the Department to publish a notice of proposed rulemaking
requiring airlines to refund baggage fees when a passenger's luggage is
substantially delayed and to refund other ancillary fees when
passengers pay for a service that is not provided.
(2) Background
The FAA Extension, Safety, and Security Act of 2016 (FAA Extension
Act or Act) requires the Department to issue a rule mandating that
airlines provide refunds to passengers for any fee charged to transport
a checked bag if the bag is delayed as specified in the Act.\4\ On
October 31, 2016, the Department published an advance notice of
proposed rulemaking (ANPRM) seeking comment on various issues related
to the requirement for airlines to refund checked baggage fees when
they fail to deliver the bags in a timely manner as provided by the FAA
Extension Act.\5\ On July 21, 2021, the Department published a notice
of proposed rulemaking titled ``Refunding Fees for Delayed Checked Bags
and Ancillary Services That Are Not Provided'' (Ancillary Fee Refund
NPRM).\6\ Among other things, the Ancillary Fee Refund NPRM proposed
that U.S. and foreign air carriers refund the baggage fee paid for a
checked bag when they fail to deliver the bag to the passenger within
12 hours of the arrival of a domestic flight and within 25 hours of the
arrival of an international flight. This NPRM further proposed ways to
measure the length of the baggage delivery delay for the purpose of
determining whether a refund is due. In addition, the Ancillary Fee
Refund NPRM also proposed to implement a provision in the FAA
Reauthorization Act of 2018 regarding refunding fees for ancillary
services that are paid for but not provided.\7\
---------------------------------------------------------------------------
\4\ See FAA Extension, Safety, and Security Act of 2016, Pub. L.
114-190, July 15, 2016; 49 U.S.C. 41704 note.
\5\ 81 FR 75347 (October 31, 2016).
\6\ 86 FR 38420 (July 21, 2021).
\7\ 49 U.S.C. 42301 note prec.
---------------------------------------------------------------------------
The Department received a total of 29 comments on the Ancillary Fee
Refund NPRM--three comments from consumer rights advocacy groups,\8\ 16
comments from U.S. and foreign airlines and airline trade
associations,\9\ three
[[Page 32761]]
comments from ticket agent trade associations,\10\ five comments from
individual consumers, one comment from the Colorado Attorney General,
and one comment from an ancillary service provider.\11\ Overall, the
commenters provided various suggestions on how the Department should
interpret and implement the statutory mandate. Airlines asserted they
would face challenges to comply with certain aspects of the proposed
baggage delivery deadlines and other requirements, while consumers and
ticket agents supported a more stringent standard under which a refund
of baggage fees is due.
---------------------------------------------------------------------------
\8\ Business Travel Coalition et. al., FlyersRights.org, and
Travelers United.
\9\ Airlines for America, International Air Transport
Association, Arab Air Carriers' Association, Association of Asian
Pacific Airlines, National Air Carrier Association, Regional Airline
Association, Allegiant Air, Air New Zealand, Condor Flugdienst GmbH,
COPA Airlines, Emirates, Kuwait Airways, Qatar Airways, Spirit
Airlines, United Airlines, and Virgin Atlantic.
\10\ American Society of Travel Advisors and Travel Technology
Association (Travel Technology Association submitted two comments).
\11\ Panasonic Avionics Corporation.
---------------------------------------------------------------------------
In a separate effort to enhance air travel consumer protection, on
August 22, 2022, the Department published in the Federal Register a
notice of proposed rulemaking titled ``Airline Ticket Refunds and
Consumer Protections'' (Ticket Refund NPRM) to propose measures to
enhance protections for consumers when airlines cancel or make
significant changes to the scheduled itineraries to, from, or within
the United States.\12\ Currently, the Department's regulations in 14
CFR part 259 require that airlines provide prompt refunds ``when ticket
refunds are due.'' Further, the Department's regulations in 14 CFR part
399 require that ticket agents ``make proper refunds promptly when
service cannot be performed as contracted.'' The Department's Office of
Aviation Consumer Protection has interpreted these requirements and its
statutory authority to prohibit unfair and deceptive practices as
mandating airlines and ticket agents provide prompt refunds to
passengers of both the airfare and fees for prepaid ancillary service
fees if a flight is cancelled or significantly changed and the
passenger does not continue his or her travel. The Ticket Refund NPRM
proposed to codify the interpretation that when carriers cancel flights
or make significant changes to flight itineraries and the contracted
service is not provided, ticket refunds are due if consumers do not
accept the alternative transportation offered by carriers or ticket
agents. It also proposed to define ``significant change of flight
itinerary'' and ``cancelled flight'' to protect consumers and ensure
consistency among carries and ticket agents regarding when passengers
are entitled to refunds.
---------------------------------------------------------------------------
\12\ 87 FR 51550 (August 22, 2022). Prior to publication in the
Federal Register, on August 3, 2022, the NPRM was publicly available
at https://www.transportation.gov/airconsumer/latest-news and at
https://www.regulations.gov, docket number DOT-OST-2022-0089.
---------------------------------------------------------------------------
The Ticket Refund NPRM also proposed to require airlines and ticket
agents to issue non-expiring travel credits or vouchers, and under
certain circumstances, refunds in lieu of the travel credits or
vouchers, to consumers when they: (1) are restricted or prohibited from
traveling by a governmental entity due to a serious communicable
disease (e.g., as a result of a stay at home order, entry restriction,
or border closure); (2) are advised by a medical professional or
determine consistent with public health guidance issued by the Centers
for Disease Control and Prevention (CDC), comparable agencies in other
countries, or the World Health Organization (WHO) not to travel during
a public health emergency to protect themselves from a serious
communicable disease; or (3) are advised by a medical professional or
determine consistent with public health guidance issued by CDC,
comparable agencies in other countries, or WHO not to travel,
irrespective of any declaration of a public health emergency, because
they have or may have contracted a serious communicable disease and
their condition would pose a direct threat to the health of others.
Under the Department's current regulations, there is no requirement for
an airline or a ticket agent to issue a refund or travel credit to a
passenger holding a non-refundable ticket when the airline operated the
flight and the passenger does not travel, regardless of the reason that
the passenger does not travel. The Ticket Refund NPRM's proposals were
intended to protect consumers' financial interests when the disruptions
to their travel plans were caused by public health concerns beyond
their control, and also to promote safe and adequate air transportation
by incentivizing individuals to postpone travel when they are advised
by a medical professional or determine, consistent with public health
guidance, not to travel to protect themselves from a serious
communicable disease or because they have or may have a serious
communicable disease that would pose a threat to others.
Between August 2022 and January 2023, the Aviation Consumer
Protection Advisory Committee (ACPAC) \13\ devoted substantial time in
three separate meetings to discuss the Ticket Refund NPRM. At an all-
day public meeting on August 22, 2022, the ACPAC heard the perspectives
of consumer advocates, airline and ticket agent representatives, and
members of the public. Then, on December 9, 2022, the ACPAC identified
and deliberated on potential recommendations on the Ticket Refund NPRM.
The ACPAC voted on these recommendations at a meeting held on January
12, 2023.
---------------------------------------------------------------------------
\13\ The ACPAC is a statutorily required Federal advisory
committee that evaluates current aviation consumer protection
programs. It also provides recommendations to the Secretary for
improving and establishing additional consumer protection programs
that may be needed. Information about ACPAC is available at https://www.regulations.gov/docket/DOT-OST-2018-0190.
---------------------------------------------------------------------------
The Department initially provided a comment period of 90 days on
the Ticket Refund NPRM (i.e., until November 21, 2022). In September
2022, Airlines for America (A4A), the International Air Transport
Association (IATA), the Travel Technology Association (Travel Tech),
the American Society of Travel Advisors (ASTA), and the Travel
Management Coalition requested an extension of the comment period.\14\
The Department extended the comment period to December 16, 2022. In
extending the comment period for an additional 25 days, the Department
acknowledged that the NPRM raised important issues that required in-
depth analysis and consideration by the stakeholders. The Department
also noted that the ACPAC was expected to meet on December 9 to
deliberate on what, if any, recommendations it would make to the
Department regarding this rulemaking and its belief that extending the
comment period of the NPRM for one week after the ACPAC meeting would
provide the public an opportunity to consider and provide comment on
any recommendations of the ACPAC.
---------------------------------------------------------------------------
\14\ In the request for extension of comment period by the
airline representatives, they included various questions arising
from the NPRM for which they sought clarifications from the
Department. The Department responded to these questions and placed
the responses in the docket for this rulemaking at DOT-OST-2022-
0089.
---------------------------------------------------------------------------
On December 16, 2022, A4A and IATA filed a petition to request a
public hearing on the NPRM pursuant to the Department's regulation on
discretionary rulemaking relating to unfair and deceptive practices at
14 CFR 399.75. The Department granted the request and conducted a
public hearing on March 21, 2023, to afford A4A, IATA, and other
stakeholders an opportunity to present certain factual
[[Page 32762]]
issues that they asserted are pertinent to the Department's decision on
the rulemaking. At the hearing, the Department heard from various
stakeholders and subject matter experts on three issues regarding the
Ticket Refund NPRM: (1) whether consumers can make reasonable self-
determinations regarding contracting a serious communicable disease;
(2) whether the documentation requirement (medical attestation and/or
public health guidance) is sufficient to prevent fraud; and (3) how to
determine whether a downgrade of amenities or travel experiences
qualifies as a ``significant change of flight itinerary.'' The
Department reopened the comment period for seven days after the hearing
to allow the public the opportunity to provide comments on issues
discussed at the hearing.
The Department received over 5,300 comments on the Ticket Refund
NPRM from consumer rights advocacy groups, airlines and airline trade
associations, ticket agents and ticket agent trade associations,
academic researchers, State attorneys general, and individual
consumers. Of the 5,300 comments, approximately 4,600 comments are from
individual consumers or consumer organizations, while approximately 24
comments are from airline representatives and 650 comments are from
those representing ticket agents. Almost all consumer commenters
expressed strong support of the Department's proposals to enhance
aviation consumer protection. The industry commenters raised various
concerns about the NPRM proposals, supporting some while urging the
Department to reconsider or revise others.
The Department has carefully reviewed and considered the comments
on the Ancillary Fee Refund NPRM and the Ticket Refund NPRM received in
the rulemaking dockets, as well as comments received during the March
2023 hearing and the recommendations of the ACPAC. The Department is
now issuing a combined final rule for the Ticket Refunds NPRM and the
Ancillary Fee Refund NPRM to significantly strengthen protections for
consumers seeking refunds of: (1) airline tickets when an airline
cancels or significantly changes a flight, and the consumer rejects or
is not offered alternative transportation; (2) checked bag fees when
bags are significantly delayed; and (3) ancillary services fees when
consumers pay for services, such as Wi-Fi, that are not provided. In
addition, this final rule provides protections for consumers who are
unable or advised not to travel because of a serious communicable
disease by requiring that carriers provide these consumers travel
vouchers or credits that are transferrable and valid for at least 5
years from the date of issuance.
(3) Summary of Major Provisions
------------------------------------------------------------------------
Subject Final rule
------------------------------------------------------------------------
Definition of Cancelled Flight.... Amend 14 CFR part 399 and add 14 CFR
part 260 to define cancelled flight
as a flight that was published in a
carrier's Computer Reservation
System (CRS) at the time of the
ticket sale but not operated by the
carrier.
Definition of Significant Change Amend 14 CFR part 399 and add 14 CFR
of Flight Itinerary. part 260 to define significant
change of flight itinerary as a
change to the itinerary made by a
carrier where:
(1) the passenger is scheduled to
depart from the origination airport
three hours or more (for domestic
itineraries) or six hours or more
(for international itineraries)
earlier than the original scheduled
departure time;
(2) the passenger is scheduled to
arrive at the destination airport
three hours or more (for domestic
itineraries) or six hours or more
(for international itineraries)
later than the original scheduled
arrival time;
(3) the passenger is scheduled to
depart from a different origination
airport or arrive at a different
destination airport;
(4) the passenger is scheduled to
travel on an itinerary with more
connection points than that of the
original itinerary;
(5) the passenger is downgraded to a
lower class of service;
(6) the passenger with a disability
is scheduled to travel through one
or more connecting airports that
differ from the original itinerary;
or
(7) the passenger with a disability
is scheduled to travel on a
substitute aircraft that results in
one or more accessibility features
needed by the passenger being
unavailable.
Entity Responsible for Refunding Add 14 CFR part 260 to require U.S.
Airline Tickets. and foreign air carriers that are
the merchants of record \15\ of the
ticket transactions to provide
prompt refunds when they are due,
including for codeshare and
interline itineraries.
Amend 14 CFR part 399 to require
ticket agents that are merchants of
record of the airline ticket
transactions to provide prompt
ticket refunds when they are
due.\16\
Notification of Right to Refund... Amend 14 CFR parts 259 and 399 to
require U.S. and foreign airlines
and ticket agents inform consumers
that they are entitled to a refund
of the ticket if that is the case
before making an offer for
alternative transportation or
travel credits, vouchers, or other
compensation in lieu of refunds.
Add 14 CFR part 260 to require U.S.
and foreign airlines to provide
prompt notifications to consumers
affected by a cancelled or
significantly changed flight of
their right to a refund of the
ticket and ancillary fees due to
airline-initiated cancellations or
significant changes, any offer of
alternative transportation or
travel credit, vouchers, or other
compensation in lieu of a refund,
and airline policies on refunds and
rebooking when consumers do not
respond to carriers' offers of
alternative transportation or
travel credit, vouchers, or other
compensation in lieu of a refund.
``Prompt'' Ticket Refund.......... Amend 14 CFR parts 259 and 399 and
add 14 CFR part 260 to specify
``prompt'' ticket refund means:
(1) Airlines and ticket agents
provide refunds for tickets
purchased with credit cards within
7 business days of refunds becoming
due; and
(2) Airlines and ticket agents
refund tickets purchased with
payments other than credit cards
within 20 calendar days of refunds
becoming due.
Define ``business days'' to mean
Monday through Friday excluding
Federal holidays in the United
States.
[[Page 32763]]
Automatic Refunds of Airline Add 14 CFR part 260 to require
Tickets. carriers who are the merchants of
record to provide automatic ticket
refunds when:
(1) a carrier cancels a flight and
does not offer alternative
transportation or travel credits,
vouchers, or other compensation for
the canceled flight in lieu of a
refund;
(2) a carrier significantly changes
a flight and the consumer rejects
the significantly changed flight
itinerary and the carrier does not
offer alternative transportation or
offer travel credits, vouchers, or
other compensation in lieu of a
refund;
(3) a consumer rejects the
significantly changed flight or
alternative transportation offered
as well as travel credits,
vouchers, or other compensation
offered for a canceled flight or a
significantly changed flight
itinerary in lieu of a refund;
(4) a carrier offers a significantly
changed flight or alternative
transportation for a significantly
changed flight itinerary or a
canceled flight, but the consumer
does not respond to the
transportation offered on or before
a response deadline set by the
carrier and does not accept any
offer of travel credits, vouchers,
or other compensation, and the
carrier's policy is to treat a lack
of a response as a rejection of the
alternative transportation offered;
(5) a carrier does not offer a
significantly changed flight or
alternative transportation for a
significantly changed flight
itinerary or a canceled flight but
offers travel credits, vouchers, or
other compensation in lieu of a
refund, and the consumer does not
respond to the alternative
compensation offered on or before a
reasonable response date in which
case the lack of a response is
deemed a rejection; or
(6) a carrier offers a significantly
changed flight or alternative
transportation for a significantly
changed flight itinerary or a
canceled flight and offers travel
credits, vouchers, or other
compensation in lieu of a refund
and the carrier has not set a
deadline to respond, the consumer
does not respond to the
alternatives offered, and the
consumer does not take the flight.
Carriers may set a reasonable
deadline for a consumer to accept
or reject a significant change to a
flight or an offer of alternative
transportation following a
significant change or a
cancellation.
Carriers that set a deadline must
establish, publish, and adhere to a
policy regarding whether consumers
not responding to a significant
change or an offer of alternative
transportation following a
significant change or cancellation
before the carrier's deadline
would: (1) have their reservations
cancelled and receive a refund; or
(2) maintain their reservations and
forfeit the right to a refund.
Refunding Fees for Significantly Add 14 CFR part 260 to require U.S.
Delayed Bags. and foreign airlines that are
merchants of record for the checked
bag fee or if a ticket agent is the
merchant of record for the checked
bag fee, the carrier that operated
the last flight segment to provide
automatic refunds of checked
baggage fees when they fail to
deliver checked bags in a timely
manner:
(1) For domestic itineraries, a
refund of baggage fee is due when
an airline fails to deliver the
checked bag within 12 hours of the
consumer's flight arriving at the
gate and the consumer has filed a
Mishandled Baggage Report.
(2) For international itineraries
where the flight duration of the
segment between the United States
and a point in a foreign country is
12 hours or less, a refund of
baggage fee is due when the airline
fails to deliver the checked bag
within 15 hours of the consumer's
flight arriving at the gate and the
consumer has filed a Mishandled
Baggage Report.
(3) For international itineraries
where the flight duration of the
segment between the United States
and a point in a foreign country is
over 12 hours, a refund of baggage
fee is due when the airline fails
to deliver the checked bag within
30 hours of the consumer's flight
arriving at the gate and the
consumer has filed a Mishandled
Baggage Report.
Refunding Ancillary Services Fees Add 14 CFR part 260 to require U.S.
for Services Not Provided. and foreign airlines that are
merchants of record for the
ancillary service or if a ticket
agent is the merchant of record for
the ancillary service, the carrier
that failed to provide the
ancillary service to provide
automatic refunds of ancillary
service fees when a passenger pays
for an ancillary service that the
airlines fail to provide.
Providing Travel Credits or Add 14 CFR part 262 to require U.S.
Vouchers to Consumers Affected by and foreign airlines that are
a Serious Communicable Disease. merchants of record for the ticket
transaction or if a ticket agent is
the merchant of record, the carrier
that operated the flight to issue
travel credits or vouchers, valid
for at least five years from the
date of issuance and transferrable,
when:
(1) a consumer is advised by a
licensed treating medical
professional not to travel during a
public health emergency to protect
himself/herself from a serious
communicable disease, the consumer
purchased the airline ticket before
a public health emergency was
declared, and the consumer is
scheduled to travel during the
public health emergency to or from
the area affected by the public
health emergency;
(2) a consumer is prohibited from
travel or is required to quarantine
for a substantial portion of the
trip by a governmental entity in
relation to a serious communicable
disease and the consumer purchased
the airline ticket before a public
health emergency for that area was
declared or, if there is no
declaration of a public health
emergency, before the government
prohibition or restriction for
travel to or from that area is
imposed; or
(3) a consumer is advised by a
licensed treating medical
professional not to travel,
irrespective of a public health
emergency, because the consumer has
or is likely to have contracted a
serious communicable disease and
would pose a direct threat to the
health of others.
Documentation Requirement for Add 14 CFR part 262 to allow U.S.
Receiving Credits or Vouchers. and foreign airlines to require
consumers requesting a credit or
voucher for a non-refundable ticket
when the flight is still scheduled
to be operated without significant
change to provide, as appropriate:
[[Page 32764]]
(1) the applicable government order
or other document relating to a
serious communicable disease
demonstrating how the passenger is
prohibited from travel or is
required to quarantine at the
destination for a substantial
portion of the trip; or
(2) a written statement from a
licensed treating medical
professional, attesting that it is
the medical professional's opinion,
based on current medical knowledge
concerning a serious communicable
disease such as guidance issued by
CDC or WHO and the passenger's
health condition, that the
passenger should not travel to
protect the passenger from a
serious communicable disease or the
passenger would pose a direct
threat to the health of others if
the passenger traveled. This
medical statement may only be
required in the absence of HHS
guidance declaring that requiring
such documentation is not in the
public interest.
Service Fees by Ticket Agents for Amend 14 CFR part 399 to allow
Issuing Tickets. ticket agents to retain the service
fee charged when issuing the
original ticket if the service
provided is for more than
processing payment for a flight
that the consumer found and so long
as the fee is on a per-passenger
basis and the existence, amount,
and the non-refundable nature of
the fee if this is the case, is
clearly and prominently disclosed
to consumers at the time they
purchase the airfare.
Processing Fees for Issuing Retaining Processing Fee for
Refunds, Credits, or Vouchers. Required Refunds: Add 14 CFR part
260 to prohibit carriers from
retaining a processing fee for
issuing required refunds when the
carrier cancels or significantly
changes a flight.
Processing Fee for Issuing Required
Credits or Vouchers: Add 14 CFR
part 262 to allow airlines to
retain a processing fee from the
value of a required travel credit
or voucher provided to a passenger
due to a serious communicable
disease. Airlines (not ticket
agents) are responsible for issuing
travel credits or vouchers to
eligible consumers whose travel is
affected by a serious communicable
disease.
------------------------------------------------------------------------
(4) Costs and Benefits
---------------------------------------------------------------------------
\15\ Merchants of records are the entities shown in the
consumer's financial charge statements such as debit or credit card
charge statements.
\16\ Comments from ticket agents assert that ticket agents
appear as merchants of records in less than 10 percent of
transactions addressed in this final rule.
---------------------------------------------------------------------------
The final rule will reduce inconsistencies in granting consumers
airline ticket refunds that stem from the lack of universal definitions
for cancellation and significant itinerary change. As such, the rule is
expected to reduce the resources consumers need to expend to obtain the
refunds they are owed. Consumer time savings are estimated to be about
$3.8 million annually. The rule also implements 2016 and 2018 statutory
mandates pertaining to refunds of fees for delayed baggage and
ancillary services that a consumer does not receive. The expected
economic impacts of the fee refund provisions consist of $16.0 million
annually in increased refunds to consumers and $7.1 million annually in
administrative costs for the airlines.
The rule also requires airlines to provide five-year transferable
travel credits or vouchers to passengers who cancel travel for reasons
related to a serious communicable disease. Expected societal benefits,
which were not quantified, are from infected air passengers who cancel
air travel due the option of receiving the five-year travel credit and
the reduction in exposure of uninfected passengers to serious
contagious disease. Estimated annual costs range from $3.4 million to
$482.0 million.
Statutory Authority
The Department is issuing this rulemaking under its authority to
prohibit unfair or deceptive practices or unfair methods of competition
in air transportation or the sale of air transportation pursuant to 49
U.S.C. 41712, its authority to require safe and adequate interstate
transportation pursuant to 49 U.S.C. 41702, its authority to mandate
that airlines refund checked baggage fees to passengers when they fail
to deliver checked bags in a timely manner pursuant to 49 U.S.C. 41704
note, and its authority to mandate that airlines promptly provide a
refund to a passenger of any ancillary fees paid for services related
to air travel that the passenger does not receive pursuant to 49 U.S.C.
42301 note prec.
Under the Department's procedural rule regarding rulemakings
relating to unfair and deceptive practices, 14 CFR 399.75, the
Department is required to provide its reasoning for concluding that a
certain practice is unfair or deceptive to consumers, as defined in 14
CFR 399.79, when issuing aviation consumer protection rulemakings that
are not specifically required by statute and are based on the
Department's general authority to prohibit unfair or deceptive
practices under 49 U.S.C. 41712. A practice is ``unfair'' to consumers
if it causes or is likely to cause substantial injury, which is not
reasonably avoidable, and the harm is not outweighed by benefits to
consumers or competition.\17\ Proof of intent is not necessary to
establish unfairness.\18\ The elements of unfairness are further
elaborated by the Department in its guidance document. \19\
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\17\ 14 CFR 399.79(b)(1).
\18\ 14 CFR 399.79(c).
\19\ 87 FR 52677 (August 28, 2022).
---------------------------------------------------------------------------
The Department has determined that it is an unfair business
practice in violation of section 41712 for airlines or ticket agents to
refuse to refund passengers when an airline cancels or significantly
changes a flight and passengers do not accept the offered alternative
transportation or compensation (e.g., airline credits or vouchers) in
lieu of a refund, regardless of whether the passenger purchased a non-
refundable ticket. A practice by airlines or ticket agents of not
providing refunds in such situations substantially harms consumers
because consumers paid money for services that were not provided when
the airline cancelled or significantly changed the flight. This harm is
not reasonably avoidable by consumers as cancellations or significant
changes to their flights are outside of their control. A reasonable
consumer would not expect that he or she must pay more to purchase a
refundable ticket to be able to recoup the ticket price when the
airline fails to provide the service through no action or fault of the
consumer. Also, the tangible and significant harm to consumers of not
receiving a refund is not outweighed by benefits to consumers or
competition. The Department acknowledges that consumers may benefit
from the availability of lower cost nonrefundable tickets but does not
expect that this requirement would result in airlines no longer
offering
[[Page 32765]]
nonrefundable tickets as the term nonrefundable has generally been
understood not to apply in cases where airlines cancel or make a
significant change in the service provided.
For airlines, this prohibited unfair practice includes a carrier's
retention of a fee to process a required refund or of a booking fee
(i.e., a fee for processing payment for a flight that the consumer
found) because it is the carrier's flight that is significantly changed
or canceled; the Department is deferring decision on whether the same
prohibition should apply to ticket agents because ticket agents do not
operate the flight. Further, the Department has determined that it is
an unfair and deceptive practice in violation of section 41712 for
airlines and ticket agents to not inform consumers that they are
entitled to a refund of the ticket and ancillary fees if that is the
case before making an offer for travel credits, vouchers, or other
compensation in lieu of refunds. Also, it is an unfair and deceptive
practice to not provide proper disclosures and notifications to
consumers with respect to: the limitations, restrictions, and
conditions on any travel credits, vouchers, or other compensation
offered in lieu of refunds; consumers' rights to automatic refunds
under certain circumstances; and any airline-imposed requirements on
accepting or rejecting alternative transportation. Additionally, to
ensure that consumers who purchased their airline tickets from a ticket
agent receive refunds that are due in a timely manner, the Department
has determined that it is an unfair practice for airlines to not
confirm a consumer's refund eligibility in a timely manner. The
Department's analysis on why these actions by airlines or ticket agents
violate section 41712 will be provided in each section that discusses
these matters in substance.
Similarly, the Department considers it to be an unfair practice for
an airline to not provide travel credits or vouchers when (1) a
consumer is advised by a licensed treating medical professional not to
travel to protect himself/herself from a serious communicable disease
and the consumer purchased the airline ticket before a public health
emergency affecting the origination or destination of the consumer's
itinerary was declared and is scheduled to travel to or from that area
during the public health emergency; (2) a consumer is prohibited from
traveling or is required to quarantine for a substantial portion of the
trip by a governmental entity due to a serious communicable disease
(e.g., as a result of a stay-at-home order, border closure) affecting
the origination or destination of the consumer's itinerary and the
consumer purchased the airline ticket before a public health emergency
was declared or, if there is no declaration of a public health
emergency, before the government prohibition or restriction for travel
to the consumer's destination or from the consumer's origination; or
(3) a consumer is advised by a licensed treating medical professional
consistent with public health guidance (e.g., CDC guidance) not to
travel to protect others from a serious communicable disease. Consumers
are substantially harmed when they pay for a service that they are
unable to use because they were directed or advised by governmental
entities or a medical professional not to travel to protect themselves
or others from a serious communicable disease, and the airline does not
provide a travel credit or voucher. More specifically, the loss of the
value of their tickets is a substantial harm that is not reasonably
avoidable when consumers purchased their tickets before the declaration
of a public health emergency and the only way to avoid the loss of the
ticket value is to disregard a medical professional's advice not to
travel and risk inflicting serious health consequences on themselves.
This loss is also not reasonably avoidable when consumers purchased
their tickets before the declaration of a public health emergency that
results in the issuance of communicable disease-related travel
prohibition or restriction or, if there is no declaration of a public
health emergency, before the government prohibition or restriction for
travel due to a serious communicable disease and the only way to avoid
the loss of the ticket value is to disregard direction from
governmental entities. Finally, this loss of the value of their tickets
is not reasonably avoidable when the only way to avoid the loss of the
ticket value is to disregard medical professionals' advice not to
travel and risk inflicting serious health consequences on others. The
tangible and significant harm to consumers of losing the value of their
ticket is not outweighed by potential benefits to consumers or
competition because the requirement to provide travel credits or
vouchers would have minimal, if any, impact on nonrefundable fares. A
public health emergency affecting travel to, within, and from the
United States in a large scale is infrequent, and this requirement
applies only to consumers who have been advised or directed not to
travel by a medical professional or governmental entity in relation to
a serious communicable disease.
In addition, the Department considers it to be an unfair practice
for airlines to not provide travel credits or vouchers to consumers who
are advised by a medical professional not to travel because they have
or are likely to have contracted a serious communicable disease,
regardless of whether there is a public health emergency. Infected
passengers who are unwilling to incur a financial loss for the airline
tickets may choose to travel despite the infection, which is likely to
cause substantial harm to other passengers on the flight by
significantly increasing the likelihood of these passengers, especially
those seated within close proximity of the infected passenger, being
infected by the communicable disease. Such harm cannot be reasonably
avoided by these passengers because they are assigned to sit close to
the infected passenger and may have no knowledge about the infection by
that passenger. The harm to these passengers' health is not outweighed
by any benefits to consumers or competition. The Department believes
there would not be any benefit to consumers or competition among
airlines in infected or potentially infected travelers possibly
choosing to travel by air and infecting other passengers.
Further, the Department relies on its authority in 49 U.S.C. 41702
to require U.S. air carriers to ``provide safe and adequate interstate
air transportation'' to establish the requirement that an airline
provide travel credits or vouchers to consumers who are unable or
advised not travel due to a serious communicable disease. This final
rule promotes safe and adequate air transportation by reducing
incentives to travel for individuals who have been advised against
traveling because they have or are likely to have contracted a serious
communicable disease or individuals who are particularly vulnerable to
a serious communicable disease by allowing them to retain the value of
their tickets in travel credits and postpone travel.
The Department has received comments from the airlines, ticket
agents, and their trade associations disputing the Department's
authority to promulgate the regulation relating to providing travel
credits or vouchers to passengers whose travel is impacted by a serious
communicable disease. Those comments and the Department's responses are
provided in Section IV.1 of this rule preamble.
The requirements in this final rule regarding airlines refunding
baggage fees when significantly delayed and refunding ancillary service
fees when
[[Page 32766]]
the paid for services are not provided are specifically required by
statute. The requirement for airlines to refund fees for checked bags
that are significantly delayed is issued pursuant to the Department's
authority in 49 U.S.C. 41704 note, which was enacted as part of the FAA
Extension Act (Pub. L. 114-90) and requires the Department to
promulgate a regulation that mandates that airlines refund checked
baggage fees to passengers when they fail to deliver checked bags in a
timely manner.\20\ The requirement to refund ancillary fees for air
travel related services that passengers paid for but did not receive is
issued pursuant to the Department's authority in 49 U.S.C. 42301 note
prec., which was enacted as part of the FAA Reauthorization Act of 2018
(Pub. L. 115-254) and requires the Department to promulgate a rule that
mandates that airlines promptly provide a refund to a passenger of any
ancillary fees paid for services related to air travel that the
passenger does not receive.\21\
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\20\ See Section 2305 of the FAA Extension, Safety, and Security
Act of 2016, Public Law 114-190 (July 15, 2016)).
\21\ See Section 421 of the FAA Reauthorization Act of 2018,
Public Law 115-254 (October 5, 2018).
---------------------------------------------------------------------------
Comments and Responses
I. Refunding Airline Tickets for Cancelled or Significantly Changed
Flights
1. Covered Entities, Flights, and Consumers
The NPRM: The existing requirement under 14 CFR 259.5 for carriers
to adopt and adhere to a customer service plan, which includes a
commitment to provide prompt ticket refunds to passengers when a refund
is due, applies to all scheduled flights of a certificated or commuter
air carrier \22\ if the carrier operates passenger service using any
aircraft originally designed to have a passenger capacity of 30 or more
seats, and to all scheduled flights to and from the United States of a
foreign carrier if the carrier operates passenger service to and from
the United States using any aircraft originally designed to have a
passenger capacity of 30 or more seats. The Ticket Refund NPRM proposed
to expand the applicability of the requirement to provide prompt
refunds to a certificated or commuter air carrier that operates
scheduled passenger service to, within, and from the United States
using aircraft of any size, and to a foreign carrier that operates
scheduled passenger service to or from the United States using aircraft
of any size. The Department sought comments on whether the proposed
expansion of the regulation in section 259.5 to include smaller
carriers is reasonable, and what obstacles, if any, these smaller
carriers may encounter to compliance.
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\22\ A certificated air carrier is an air carrier holding a
certificate issued under 49 U.S.C. 41102. A commuter air carrier is
an air carrier as established by 14 CFR 298.3(b) that carries
passengers on at least five round trips per week on at least one
route between two or more points according to a published flight
schedule, using small aircraft--i.e., aircraft originally designed
with the capacity for up to 60 passenger seats. See 14 CFR 298.2.
Commuter air carriers, along with air taxi operators, operating
under 14 CFR part 298 are exempted from the certification
requirements of 49 U.S.C. 41102.
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As for ticket agents,\23\ the Department's rule in 14 CFR 399.80(l)
requires that ticket agents of any size ``make proper refunds promptly
when service cannot be performed as contracted.'' The Ticket Refund
NPRM proposed that, like the existing rule on ticket agents providing
refunds, the proposed refund requirements would apply to ticket agents
of any size but specified that it would only apply to ticket agents
that sell directly to consumers for scheduled passenger service to,
from, or within the United States.
---------------------------------------------------------------------------
\23\ A ``ticket agent'' is defined in 49 U.S.C. 40102(a)(45) to
mean a person (except an air carrier, a foreign air carrier, or an
employee of an air carrier or foreign air carrier) that as a
principal or agent sells, offers for sale, negotiates for, or holds
itself out as selling, providing, or arranging for, air
transportation.
---------------------------------------------------------------------------
In the NPRM, the Department also considered whether the
applicability of DOT's proposed refund requirements should be limited
to sellers of air transportation located in the United States and
whether the beneficiaries should be limited to aviation consumers who
are residents of the United States based on its review of Regulation Z
of the Consumer Financial Protection Bureau (CFPB), as codified in 12
CFR part 1026, and the airline refund regulation in 14 CFR part 374,
which implements the requirement of Regulation Z with respect to
airlines. The Department recognized that the regulated entities covered
by Regulation Z for airline ticket transactions with credit cards may
be limited to sellers located in the United States and that the
protection afforded by Regulation Z may be limited to consumers who are
residents of the United States with credit card accounts located in the
United States. The Department also noted its broad and independent
authority to prohibit unfair or deceptive practices in air
transportation or sale of air transportation,\24\ which enables it to
cover flights to, within, and from the United States, irrespective of
whether the consumer holding reservations on those flights is a
resident of the United States, whether the seller of the airline ticket
is located in the United States, or whether the transaction takes place
in the United States. The Department asked for comment on the
applicability of the proposed requirement.
---------------------------------------------------------------------------
\24\ Air transportation means foreign air transportation,
interstate air transportation, or the transportation of mail by
aircraft. See 49 U.S.C. 40102 (a)(5).
---------------------------------------------------------------------------
The Department also sought comments on applicability of the rule to
certain flight segments between two foreign points if they are on the
same itinerary or ticket with flights to, from, or within the United
States. If adopting the same itinerary/ticket standard, the Ticket
Refund NPRM asked whether the refund requirement should only apply when
the entire itinerary/ticket is sold under a U.S. carrier's code or
whether it should also apply to itineraries/tickets that combine flight
segments sold under a U.S. carrier's code and flight segments sold
under a foreign carrier code pursuant to an interline agreements.
Comments Received: The Department received one comment from an
individual stating that including small carriers operating flights to,
from, or within the United States solely using aircraft originally
designed to have a passenger capacity of fewer than 30 seats in these
regulatory proposals would place a considerable burden on these
carriers, potentially drive many of the smaller carriers that provide
access to more remote and distant parts of the country out of business.
The Department received no comments on the proposed scope of covered
ticket agents in the Ticket Refund NPRM, which incorporates the current
scope of ticket agents refund rule in 14 CFR 399.80(l), and the
definition for ``ticket agent'' in 49 U.S.C. 40102(a)(45).
For the covered tickets/itineraries/flights under the Ticket Refund
NPRM, IATA and several foreign carriers raised two concerns. First,
they suggested that applying the rule to all scheduled flights to,
from, or within the United States is incompatible with regulations from
other jurisdictions such as the European Union and Canada. They further
argued that the rule should only apply to flight segments departing a
U.S. airport. Air Canada argued that the scope of the refund
regulation, as proposed, would cause confusion as refund rules in other
jurisdictions typically apply to itineraries departing that
jurisdiction to a foreign destination. Air Canada contended that the
Department's proposal represents a misalignment with Canada's Air
Passenger Protection Regulations (APPR) when both sets of rules apply
to the same itinerary. Air Canada provides an example that in the
[[Page 32767]]
case of uncontrollable event such as winter storm causing a
cancellation, the APPR only requires a carrier to refund if the carrier
is not able to rebook the passenger within 48 hours from the departure
time, whereas the Department's proposed rule would require a refund
offer upon flight cancellation. Second, IATA and several foreign
carriers objected to applying the rule to certain flight segments
between two foreign points, raising extraterritoriality concerns. Air
Canada argued that the Department's attempt to apply its refund rule
extraterritorially would violate the longstanding principles of comity
and reciprocity of international aviation agreements and the bilateral
air transport agreement \25\ between the United States and Canada.
---------------------------------------------------------------------------
\25\ As support for its position, Air Canada references Article
12.1 of the Air Transport Agreement Between the Government of Canada
and the Government of the United States, which states ``While
entering, within, or leaving the territory of one Party, its laws
and regulations relating to the operation and navigation of aircraft
shall be complied with by the other Party's airlines.''
---------------------------------------------------------------------------
Consumers and their representatives are largely in support of a
broad scope of the Ticket Refund NPRM. Travelers United stated that the
European regulation, EU261, applies to the scheduled flights of all
carriers departing the European Union to the United States but only
applies to the scheduled flights of EU carriers departing the United
States to the European Union. Travelers United pointed out that, as
such, a consumer traveling from the United States to the European Union
on a flight by a U.S. carrier, for example, would not be protected by
EU 261. Some individual consumer commenters argued that the
Department's refund rule should cover flights between two foreign
points in the same itinerary to streamline the refund process for
international travel.
Ticket agents also commented on the scope of itineraries/tickets
covered by the Ticket Refund NPRM. Travel Management Coalition
suggested that the refund rule should apply only to ticket transactions
with a point of sale in the United States. Travel Technology
Association (Travel Tech) echoed the ``point of sale'' approach and
added that this approach is a bright-line and widely used industry
standard as the Global Distribution Systems (GDSs) denote the point of
sale on all their ticket transactions. Travel Tech suggested that this
approach would make the implementation of any final rules easier for
the regulated entities.
U.S. Travel Association stated that the refund requirement should
be limited to flights to, from, or within the United States purchased
by consumers residing in the United States. It argued that this
approach is consistent with CFPB's interpretation of Regulation Z and
the Department's proposed rule on Transparency of Ancillary Fees, which
proposes that the consumer protection measures relating to disclosure
apply to websites ``marketed to United States customers'' and ``tickets
purchased by consumers in the United States.''
DOT Response: The Department has determined that it is appropriate
to include within the scope of covered carriers with respect to the
ticket refund requirements U.S. and foreign air carriers operating
scheduled flights to, from, or within the United States solely using
aircraft originally designed to have a passenger capacity of fewer than
30 seats. The Department notes that the new ticket refund regulations
in part 260, which provide clarity on various issues related to
refunds, do not add new burdens to these carriers as they are already
covered under 14 CFR part 374 with respect to refunds for credit card
purchases. The applicability provision in 14 CFR 374.2 states that
``this part is applicable to all air carriers and foreign air carriers
engaging in consumer credit transactions.'' Also, the Department's
Office of Aviation Consumer Protection has for many years interpreted
49 U.S.C. 41712 as requiring all carriers to provide prompt refunds
when due irrespective of the form of ticket purchase payment.
The Department has carefully considered airlines' argument that the
proposed scope of covered flights for airline ticket refunds (i.e.,
scheduled flights to, from, or within the United States) would
potentially result in some flights being subject to refund rules of
multiple jurisdictions, causing complexity to carriers' compliance and
potential consumer confusion. The Department is not convinced that any
potential compliance complexity or consumer confusion arising from
these situations cannot be addressed by carriers offering all the
accommodations required by the applicable regulations so consumers can
choose the option that best suits their needs. For instance, the
Department does not see any conflict of law in the example provided by
Air Canada. APPR, which applies to all flights to, from, and within
Canada,\26\ requires airlines to provide a passenger affected by a
cancellation or a lengthy delay due to a situation outside the
airline's control with a confirmed reservation on the next available
flight that is operated by the carrier or a partner airline, leaving
within 48 hours of the departure time indicated on the passenger's
original ticket; if the airline cannot provide a confirmed reservation
within this 48-hour period, it will be required to provide, at the
passenger's choice, a refund or rebooking. Both the APPR requirement
and the Department's refund requirement would apply to a flight between
the United States and Canada. Under the regulation finalized here, the
carrier would be required to refund the affected passenger if the
flight is cancelled or delayed for more than six hours and the consumer
rejects the alternative offered or an alternative is not offered. In
this situation, the carrier would be expected to offer the passenger
the choice of a refund and a choice of rebooking on a flight departing
within 48 hours if such flight exists. Providing consumers such choices
would satisfy the requirements of both U.S. and Canadian regulations.
---------------------------------------------------------------------------
\26\ https://otc-cta.gc.ca/eng/publication/application-air-passenger-protection-regulations-a-guide.
---------------------------------------------------------------------------
The Department notes that airlines operating international air
transportation are subject to rules from multiple jurisdictions in many
other areas, such as oversales and disability. The Department does not
believe there is a conflict of law in ticket refunds which makes it
impossible for carriers to comply with laws of multiple jurisdictions.
The Department expects that U.S. and foreign air carriers operating
scheduled flights to, from, and within the United States will fully
comply with the refund regulations to which they are subject,
consistent with the bilateral agreements between the United States and
other countries. Such compliance will result in consumers benefiting
from having more choices when their flights are canceled or
significantly changed by airlines.
We have also considered the comments on the scope of ``air
transportation'' for tickets that include flight segments between two
foreign points. The Department has determined that the refund
requirements would cover these flight segments that are on a single
ticket/itinerary to or from the United States without a break in the
journey. Congress has authorized the Department to prevent unfair or
deceptive practices or unfair methods of competition in ``air
transportation,'' 49 U.S.C. 41712(a), and ``air transportation'' is
defined to include ``foreign air transportation.'' \27\ The
[[Page 32768]]
Department has concluded that ``foreign air transportation'' includes
journeys to or from the United States with brief and incidental
stopover(s) at a foreign point without breaking the journey. We believe
this approach fully addresses the extraterritoriality concerns raised
by some carriers and is consistent with the Department's general
approach adopted in this final rule of considering domestic segments of
international itineraries as a part of the international journey. While
the Department is not providing an exhaustive list of what a stopover
that would break the journey is, it is setting an outer limit by
treating any deliberate interruption of a journey at a point between
the origin and destination that is scheduled to exceed 24 hours on an
international itinerary to be a break in the journey.\28\
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\27\ Foreign air transportation ``means the transportation of
passengers or property by aircraft as a common carrier for
compensation, or the transportation of mail by aircraft, between a
place in the United States and a place outside the United States
when any part of the transportation is by aircraft.'' See 49 U.S.C.
40102(a)(23).
\28\ See definitions for common terms in air travel at https://www.transportation.gov/sites/dot.gov/files/docs/Common%20Terms%20in%20Air%20Travel.pdf.
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Besides this bright-line outer limit, to determine whether a
stopover under 24 hours at a foreign point breaks the journey between a
point in the United States and a point in a foreign country, the
Department would view factors including whether the whole itinerary was
purchased in one single transaction, whether the segment between two
foreign points is operated or marketed by a carrier that has no
codeshare or interline agreement with the carrier operating or
marketing the segment to or from the United States, and whether the
stopover at a foreign point involves the passenger picking up checked
baggage, leaving the airport, and continuing the next segment after a
substantial amount of time.
The Department has also determined that it is appropriate to apply
the refund and other consumer protection regulations finalized here to
all tickets/itineraries to, from, or within the United States
regardless of the point of sales or the residency of the consumers.
While recognizing that Regulation Z applies only to credit card
transactions that take place in the United States involving residents
of the United States, the Department's authority to prohibit unfair or
deceptive practices in air transportation under 49 U.S.C. 41712 goes
beyond this scope with respect to the type and location of the
transactions and the residency of consumers. The Department has made
the policy decision to exercise its broad authority under section 41712
to ensure that its ticket and ancillary service fee refunds
requirements and the protections for passengers affected by a serious
communicable disease provide the maximum protections to consumers as
permitted by the law. The Department also believes that this broad
scope would simplify and streamline the refund process by the regulated
entities and reduce consumer frustration and confusion.
2. Need for a Rulemaking
The NPRM: The NPRM is intended to prevent unfair or deceptive
practices by airlines and ticket agents when airlines cancel or make
significant changes to flights. Under the Department's existing
regulations, airlines have an obligation to provide prompt refunds when
refunds are due, but a specific reference to refunding airfare due to a
canceled or significantly changed flight is not codified in the
regulations. Also, today, airlines are permitted to adopt their own
standards for ``cancellation'' and ``significant change,'' which has
resulted in lack of consistency from airline to airline and passenger
confusion about their rights, particularly during periods of
significant air travel disruptions such as the COVID-19 pandemic when
refund requests overwhelmed the industry. As noted in the NPRM, the
Department received a significant number of complaints against airlines
and ticket agents for refusing to provide a refund or for delaying
processing of refunds during the COVID-19 pandemic. In issuing the
NPRM, the Department explained that its existing regulations on refunds
made it difficult to monitor compliance and enforce refund requirements
and described benefits of strengthening protections for consumers to
obtain a prompt refund when airlines cancel or significantly change
flight schedules.
Comments Received: Virtually all consumers and consumer rights
advocacy groups that commented on the NPRM are in support of the
Department exercising its legal authority under section 41712 to codify
the Department's longstanding enforcement policy requiring airlines and
ticket agents to provides refunds when airlines cancel or make a
significant change to a flight itinerary. They also strongly support
the proposal to define ``cancellation'' and ``significant change'' to
eliminate the inconsistencies among airline policies that are the main
sources of consumer frustration. FlyersRights commented that some
airlines' behavior during the COVID-19 pandemic to retroactively extend
the length of delay that would qualify affected consumers for a refund
is strong evidence for the need of rulemaking. In addition to
supporting the proposals in this area, approximately 500 individual
consumers expressed their view that the NPRM does not go far enough in
terms of consumer protection, with over 300 commenters explicitly
suggesting that the Department adopt regulation mandating airlines to
compensate consumers for incidental costs (e.g., meals, hotels, ground
transportation) associated with airline cancellations or significant
changes, similar to the European Union Regulation EC261/2004 (EC261).
National Consumers League noted that this additional consumer
protection measure would mitigate consumer inconveniences and
incentivize airlines to invest in maintaining operations according to
the published schedules.
Among airline commenters, A4A expressed support for codifying the
refund policy and adopting definitions for ``cancellation'' and
``significant change'' but disagreed with some components of the
proposed definitions. The National Air Carrier Association (NACA)
stated that the Department should simply codify the current policy
without adopting definitions for ``cancellation'' and ``significant
change.'' IATA and several airline commenters asserted that it is not
necessary to promulgate a new rule because airlines were already
providing refunds pre-COVID-19 pandemic, as evidenced by the relatively
small numbers of complaints on refunds at that time. They contended
that the Department should not rely on a once-in-a-lifetime event
(i.e., the COVID-19 pandemic) as the justification for a rulemaking.
They pointed out that airlines have issued unprecedented amounts of
refunds during the pandemic and in cases where they failed to do so,
the Department's enforcement actions under the current rule have proven
that rulemaking is unnecessary. IATA's comment recognized that
standardizing definitions would provide consistency in passenger
experiences and avoid consumer confusion, although it argued that
allowing airlines to define these terms provides greater flexibility,
fosters competition, and helps maximize value for consumers. The
Association of Asian and Pacific Airlines (AAPA) expressed its view
that the refund requirement should exempt situations where
cancellations and significant changes are caused by safety or security-
related reasons including pandemics and when large scale disruptions or
``force majeure'' such as unannounced border closures and restrictions
by governments occur.
Ticket agents and their trade associations are generally in support
of the proposals on codification of the refund enforcement policy and
adopting
[[Page 32769]]
definitions for ``cancellation'' and ``significant change.'' Many
ticket agent commenters share the Department's view that these
proposals mitigate consumer confusion caused by different airline
refund policies and enhance predictability regarding refund rights.
However, U.S. Travel Association, an organization representing various
components of the U.S. travel industry, including some ticket agents,
opposed the proposals on refunds due to airline cancellation and
significant change, arguing that the proposals do not address the root
causes of flight delays and cancellations and would have unintended
consequences of higher costs for travel and reduced options for
consumers.
The Department also received a joint comment by 32 State Attorneys
General supporting the Department's proposal but also urging, among
other things, that the Department: (1) work on a partnership with
States to enforce consumer protection rules, (2) require airlines to
sell tickets only for flights they have adequate staff to operate, (3)
impose significant penalties for airline cancellations or lengthy
delays not caused by weather or other unavoidable reasons, and (4)
require airlines to compensate consumers affected by cancellations or
delays, including compensating for the cost of meals, hotels, flights
on another airline, rental cars, and issuing partial refunds to
consumers who took the alternative flight that is later, longer, or
otherwise of less value.
The Department's Aviation Consumer Protection Advisory Committee,
after discussing the Department's proposals on refunds related to
airline cancellation and significant change during several meetings,
unanimously recommended that the Department codify its longstanding
policy to require airlines and ticket agents to provide prompt refunds
to consumers when airlines cancel or make a significant change to
flight itineraries and consumers do not accept alternative
transportation offered by airlines or ticket agents. The member
representing airlines noted that the airlines' support on this
recommendation is limited to adopting a rule that codifies the
Department's current policy.
DOT Response: The Department continues to be concerned about the
lack of regulatory clarity regarding airlines' obligation to provide
prompt refunds when airlines cancel or make significant changes to
flights and the impact that this lack of regulatory clarity has on
airlines' compliance and the ability of the Department's Office of
Aviation Consumer Protection to take enforcement action despite the
Department's statutory authority to prohibit unfair and deceptive
practices. As described in the Statutory Authority section, the
Department believes that an airline's or ticket agent's practice of not
providing a prompt refund when an airline cancels or significantly
changes a passenger's flight and the passenger does not accept the
alternative offered causes substantial harm to consumers, the harm is
not reasonably avoidable, and the harm is not outweighed by benefits to
consumers or competition. As such, the Department concludes that its
existing regulatory structure on refunds should be enhanced to better
protect consumers.
The Department also agrees with comments from ticket agent
representatives and others that definitions for ``cancellation'' and
``significant change of flight itinerary'' mitigate consumer confusion
caused by different airline refund policies and enhance predictability
regarding refund rights. As the Department stated in the Ticket Refund
NPRM, the consumer complaints received by the Department during the
COVID-19 pandemic demonstrated that various airline definitions for
these terms have caused a great level of consumer harm in terms of
frustration and confusion. The Department agrees with FlyersRights that
a lack of a uniform standard on the meaning of a cancellation and
significant change has resulted in certain airlines improperly revising
and applying less consumer-friendly refund policies during periods when
flight cancellations and changes spike, which is strong evidence of the
need of rulemaking. The Department notes, however, that the adoption of
this final rule is not, as some airline commenters argue, solely based
on issues arising from an unprecedented pandemic. As we have witnessed
during the past two years while the air travel industry is recovering
post-pandemic, disruptions in large scales continue to occur as the
result of other factors such as weather, technological issues, and
staffing shortages. The significant number of consumer complaints on
refunds filed with the Department in recent years demonstrates the need
to strengthen the current regulation on refunds.
Regarding the various comments by consumers, consumer right
advocacy groups, and the State Attorneys General regarding promulgating
regulations to require airlines to provide compensation to consumers
when their flights are cancelled or significantly changed to cover the
incidental costs such as meals, hotels, and ground transportation, the
Department has initiated another consumer protection rulemaking to
address these issues.\29\ The Department fully recognizes that the
measures finalized in this rule on airline ticket refunds are merely
the first steps towards the Department's goal of strengthening overall
protections to consumers affected by airline cancellations and changes.
---------------------------------------------------------------------------
\29\ See, Rights of Airline Passengers When There Are
Controllable Flight Delays or Cancellations, https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202304&RIN=2105-AF20.
---------------------------------------------------------------------------
3. Definition of a Cancelled Flight
The NPRM: The Ticket Refund NPRM proposed to define a cancelled
flight to mean a covered flight that was listed in the carrier's CRS at
the time the ticket was sold to a consumer but not operated by the
carrier. Under this proposed definition, the reason that the flight was
not operated (e.g., mechanical, weather, air traffic control) would not
matter. Also, the removal of a flight from a carrier's CRS would not
negate the obligation to provide a refund when the alternative offered
is not accepted.
Comments Received: A4A and IATA expressed support for the
Department codifying a definition for ``cancelled flight'', as they
believe it is necessary to provide clarity and transparency to the
traveling public. They argued, however, that the definition should
exclude situations that would technically qualify as a ``cancellation''
under the proposed definition but do not affect consumers, such as a
simple flight number change or a flight that was delayed into the next
calendar day but does not exceed the delay limits set forth in the
definition for ``significant change of flight itinerary.'' They further
argued that when a passenger from any cancelled flight was rebooked on
a new flight that does not constitute a ``significant change of flight
itinerary'' when compared to the original flight that was cancelled,
consumers should not be entitled to a refund. The flight number change
and overnight delay exemptions argument is supported by the Regional
Airline Association (RAA) and some foreign airline commenters. The
National Air Carrier Association (NACA) argued that the definition for
``cancelled flight'' should exclude cancellations due to situations
outside of carriers' control. Qatar Airways argued that the definition
should include only flight operations that are not operated but were
listed in the carrier's CRS within seven calendar days of the scheduled
departure. On a similar issue, A4A submitted that the Department should
clarify that this definition is distinct from the Department's airline
service quality
[[Page 32770]]
reporting rule, 14 CFR part 234, and it does not change the definition
for ``cancelled flight'' in that regulation.\30\ Spirit Airlines stated
that it accepts the Department's proposed definition for ``cancelled
flight.''
---------------------------------------------------------------------------
\30\ Under 14 CFR part 234, which sets forth the requirements
that U.S. carriers must follow when submitting, among other things,
on-time performance data to the Department, a ``cancelled flight''
is defined as a flight operation that was not operated, but was
listed in a carrier's computer reservation system within seven
calendar days of the scheduled departure.
---------------------------------------------------------------------------
Consumers and consumer rights advocacy groups fully support the
Department's proposed definition for ``cancelled flight.'' National
Consumers League commented that whether a flight was removed from a
carrier's CRS one year or one day before its scheduled operation is
irrelevant for consumers. U.S. Public Interest Research Group Education
Fund filed comments supporting stronger consumer protections for air
travelers. It specifically commented that by adopting the proposed
definition for ``cancelled flight,'' airlines should no longer be
allowed to categorize cancellations that occur more than seven days
before the departure as ``discontinued'' flights therefore evading
being held accountable for the true number of cancellations. It further
stated that this would encourage airlines to produce more realistic
flight schedules.
Ticket agent representatives' positions on this definition are
split. The United States Tour Operators Association (USTOA) supported
the airlines' position on exempting situations under which consumers
are reaccommodated on flights that do not constitute a ``significant
change of flight itinerary'' when compared to the cancelled flight.
Global Business Travel Association, on the other hand, supported the
Department's proposed definition.
U.S. Chamber of Commerce opposed the proposal based on its
understanding that the definition would expand the current refund
entitlement and hold carriers liable for cancellations due to
situations beyond their control such as weather or air traffic control
delays. It further argued that this definition would also entitle a
passenger who is reaccommodated on another flight to a refund. It
suggested that the Department reconsider the definition to exempt
cancellations unforeseeable by carriers. On the other hand, the ACPAC
recommended to the Department that it adopt the proposed definition for
``cancelled flight.'' \31\
---------------------------------------------------------------------------
\31\ Three members representing consumer rights advocacy groups,
State Attorneys General, and airports, respectively, voted for the
recommendation, and the member representing A4A voted against the
recommendation, stating that although A4A generally supports DOT
defining the term, the proposed definition does not address several
concerns that A4A mentioned in its comments to the rulemaking.
According to the ACPAC Charter, a quorum must exist for any official
action, including voting on a recommendation, to occur. A quorum
exists whenever three of the appointed members are present, whether
in person and/or virtually. In any situation involving voting, the
majority vote of members will prevail, but the views of the minority
will be reported as well.
---------------------------------------------------------------------------
DOT Responses: The Department has considered the comments
suggesting the definition of ``cancelled flight'' not include a flight
cancellation that has no significant impact on a consumer because the
new flight offered to the consumer does not constitute a ``significant
change of flight itinerary'' as compared to the original flight. The
Department is concerned, however, that carving out such an exemption
would lead to substantial consumer confusion as to whether a consumer
is entitled to a refund after a flight cancellation, as entitlements to
a refund would depend on the nature of the new flight offered to each
affected consumer, a fact-specific and case-by-case analysis that is
often time-consuming, and complex. For example, if two passengers from
a cancelled flight were offered different alternative flights, one that
would be considered a ``significant change'' compared to the cancelled
flight and the other that would not be considered a ``significant
change,'' the outcome is that one passenger would be entitled to
rejecting the alternative flight and receiving a refund, and the other
would not. The Department believes that the potential complexity and
confusion associated with a case-by-case determination of when
passengers are entitled to a refund of a cancelled flight outweighs its
benefits. Further, the Department believes that consumers who are
reaccommodated on a flight that is substantially comparable to the
original flight generally would not typically refuse the re-
accommodation and seek a refund. For these reasons, the Department is
adopting the proposed definition of ``cancelled flight'' under which a
consumer would be entitled to a refund with clarification. A cancelled
flight means a flight with a specific flight number that was published
in a carrier's Computer Reservation System to operate between a
specific origin-destination city pair at the time of the ticket sale
that was not operated. Under this definition, a flight that was
operated under a different flight number would be considered a new
flight and the original flight would be considered a canceled flight.
The Department further clarifies that the NPRM did not propose to
amend, and this final rule does not amend, the existing definition of
``cancelled flight'' for airline reporting purposes in 14 CFR part 234.
U.S. carriers will continue to apply the existing definitions for
``cancelled flight'' and ``discontinued flight'' in part 234 when
reporting their on-time performance data to the Department. In response
to the comment by U.S. Chamber of Commerce, the Department notes that
its current policy requiring airlines to provide refunds due to flight
cancellations applies irrespective of the reason for a cancellation,
and this continues to be the case under this final rule. The Department
further adds that the final rule adopted here does not require airlines
or ticket agents to provide a refund to a passenger for a canceled
flight if that passenger accepts the alternative transportation offered
and is reaccommodated.
4. Definition of ``Significant Change of Flight Itinerary''
The NPRM proposed to ensure consistency on when passengers are
entitled to a refund for a significantly changed flight by defining the
term ``significant change of flight itinerary'' instead of relying on a
case-by-case analysis on whether a flight change was significant to the
consumer. The Department proposed that changes that affect departure
and/or arrival times, departure or arrival airport, a change in the
type of aircraft that causes a significant downgrade in the air travel
experience or amenities available onboard the flight, as well as the
number of connections in the itinerary, would be significant to
consumers. The NPRM sought comments regarding whether this approach is
reasonable and fair to passengers while not imposing undue burden on
carriers and ticket agents, and whether there are any other changes to
flight itineraries that airlines may make that should also be
considered a ``significant change of flight itinerary.'' The NPRM also
sought comments on whether there are any operational concerns from
airlines and ticket agents when implementing these proposed definitions
into their refund policies that should be taken into consideration.
A. Types of Significant Changes
(i) Early Departure and Late Arrival
The NPRM: The NPRM considered three options in defining the extent
of early departure or delayed arrival that
[[Page 32771]]
would qualify as ``significant changes.'' The first option, which the
NPRM proposed, is a set timeline of three hours applicable to domestic
itineraries and another set timeline of six hours applicable to
international itineraries that would constitute a significant departure
and arrival time change. The NPRM emphasized that airlines and ticket
agents would be free to apply a shorter timeframe that constitutes a
significant departure or arrival change but would not be able to
increase it beyond three hours for domestic flights and six hours for
international flights. The NPRM described this approach to be the most
straightforward, clearly defined standard that would be easily
understood by airlines and consumers, making it easier to train airline
and ticket agent personnel on how to respond to refund requests, and
potentially streamlining and expediting the refund review and issuance
process. In applying the proposed standard to a refund request, the
NPRM explained that the proposal's focus is only on the departure time
of the first flight segment and/or the arrival time of the final flight
segment. In other words, an early departure of a connecting flight or a
late arrival of a flight that is not the final flight segment, even if
exceeding the proposed timeframe, may not necessarily result in a
passenger being entitled to a refund. In addition, the NPRM clarified
that the proposed standard for international itineraries would apply to
the early departure or the late arrival of a domestic segment of those
itineraries if the domestic segment is the first or the last segment
and is on the same ticket as the international segment.
The second option the Department considered in the NPRM is the
option of not defining the timeframes of early departure and late
arrival. Under this approach, the Department would continue to use the
word ``significant'' to describe the amount of time change that would
justify a refund. The Department stated that it has concerns that this
option of leaving the determination of refund-qualifying flight
schedule time changes to individual airlines is not the best way to
achieve the balance between considering all relevant factors impacting
consumers on the one hand, and ensuring the efficiency, consistency,
and certainty of its regulation on the other hand, and may not be in
the public interest. The NPRM sought comments on whether continuing to
provide airlines the flexibility to define significant flight schedule
time change is a better option than the proposed approach (option 1) of
defining a significant departure or arrival change to mean beyond three
hours for domestic flights and six hours for international flights.
A third approach considered by the Department is to define
significant departure and arrival time change through the adoption of a
tiered structure based on objective factors such as the total travel
time of an itinerary. The NPRM provided an example of a tiered standard
using the illustration below.
------------------------------------------------------------------------
Original scheduled total travel
time (measured from the Projected arrival
scheduled departure time of the delay or early
first flight segment to the departure as Result
scheduled arrival time of the offered to
last flight segment) passenger
------------------------------------------------------------------------
3 hours or less................. 2 hours or less... Refund Not
Required.
More than 2 hours. Refund Due.
3-6 hours....................... 3 hours or less... Refund Not
Required.
More than 3 hours. Refund Due.
6-10 hours...................... 4 hours or less... Refund Not
Required.
More than 4 hours. Refund Due.
More than 10 hours.............. 5 hours or less... Refund Not
Required.
More than 5 hours. Refund Due.
------------------------------------------------------------------------
The NPRM acknowledged that this approach would be more difficult
for carriers to implement and for consumers to understand because a
determination on whether a refund is due would be based on each
individual itinerary. The NPRM asked whether the industry considers the
adoption of this type of tiered standard to be practical and whether
consumers believe this type of tiered standard would better reflect the
inconvenience and disruption caused by a flight schedule change.
Comments Received: A4A expressed its support for adopting a set
timeframe standard for determining whether a refund is due. A4A stated
that, however, the standard should only include late arrivals (delays)
and not early departures because it is consistent with the Department's
reporting regulation for U.S. carriers. A4A further suggested that the
standard should be four hours for domestic itineraries and eight hours
for international itineraries. A4A also commented that a schedule
change accepted by the passenger should reset the calculation for
delays for the purpose of refund. RAA supported A4A's position that the
standard should only cover delays but not early departures, arguing
that including both would create potential conflict when the arrival
time did not exceed the standard, but the departure time did. RAA also
supported A4A's suggestion on calculation of delay being reset once a
passenger accepts an alternative flight. RAA suggested that a flight
diversion should not be treated as a significant change of flight
itinerary as long as passengers are transported to their final
destination because safety and security are usually the principal
reason for diversions. NACA and its member Allegiant Air (Allegiant)
commented that the three/six-hour standards unduly burden Ultra-Low-
Cost-Carriers (ULCCs) because of their limited networks and the lack of
interline agreements with the large U.S. airlines that have operated
for many years. They believed that the proposal would increase
operating costs and ultimately result in higher airfares. Allegiant
further suggested that the Department should not require refunds when
the reason for the cancellation or delay is outside of a carrier's
control, as long as the carrier makes a good faith effort to rebook the
passenger. Spirit Airlines, another NACA member, commented that it has
a two-hour standard for both domestic and international itineraries,
and it does not object to the proposed three/six-hour standards. IATA,
AAPA, and Qatar Airways supported the second option, which is to allow
carriers to set their own standards for flight schedule time change.
IATA argued that a uniform standard harms consumers who travel with
airlines that currently have a more generous policy. IATA suggested
that if the Department adopts a set of uniform standards, it should be
four hours for domestic itineraries and eight hours for international
itineraries, with the international standard applying to all segments.
Air Senegal and SATA
[[Page 32772]]
International--Azores Airlines, S.A. (SATA) also supported an eight-
hour standard for international itineraries. AAPA stated that the
proposal disregards many contributory factors impacting ultra-long-haul
operations including weather, safety, security considerations, and
government restrictions. Among consumer comments, National Consumers
League supports the proposed three/six-hour standards. However,
FlyersRights stated that the proposed standards are more lenient than
many carriers' current policies. FlyersRights believes that the refund
rule should count for delayed departures (as opposed to late arrivals)
and the standard should be two hours for domestic and three hours for
international itineraries. FlyersRights further commented that for
early departures, the standard should be one hour for domestic and two
hours for international itineraries. FlyersRights explained that it
views early departures as being more harmful to consumers because for
late departures, consumers are usually already waiting at the airports.
Travelers United shared FlyersRights' view that the proposed standards
are more generous to airlines than many airlines' policies and suggests
that the standards should be 90 minutes. Among the over 4,500
individual consumer commenters, approximately 500 commented on the
proposed three/six-hour standards, with 85% in support, and 15%
suggesting shorter hours, such as two hours for domestic and four hours
for international, or three hours for both.
Two ticket agent trade associations, the Destination Wedding &
Honeymoon Specialists Association (DWHSA) and USTOA, expressed their
support for the proposed three/six-hour standards on early departures
and late arrivals. Similarly, the ACPAC recommended that the Department
adopt the proposed three- and six-hour delay standard under which a
refund is due.\32\ The joint comment filed by 32 State Attorneys
General also advocated for a three-hour delay benchmark being the floor
for consumers' entitlement to refunds and stated that this floor will
result in benefits for consumers on airlines with unclear or lengthier
delay parameters for refunds. The comment further argued that because
some airlines currently adopt a short timeframe, the Department should
take steps to ensure that setting a floor does not cause these airlines
to loosen their standards to the detriment of consumers. With respect
to the third option proposed in the NPRM to adopt a standard with a
tiered matrix based on objective factors such as the total travel time
of an itinerary, several airline commenters as well as individual
consumers expressed their opposition, arguing that this approach is not
workable because there are too many variables.
---------------------------------------------------------------------------
\32\ Three members representing consumer rights advocacy groups,
State Attorneys General, and airports, respectively, voted for the
recommendation, and the member representing A4A voted against the
recommendation, stating that A4A supports defining ``significant
delay'' but does not support the three- and six-hour timeframes.
---------------------------------------------------------------------------
DOT Responses: The Department appreciates the comments by
stakeholders on the proposed standards for flight departure/arrival
changes that would constitute ``significant changes of flight
itinerary.'' The Department agrees with commenters that defining
significant departure and arrival through the adoption of a tiered
matrix based on an objective factor such as total travel time to
determine significance is unworkable because of its complexity. Based
on the support from the airline and ticket agent industries and
consumers, the Department has determined that adopting a unified
standard consisting of set timeframes to determine whether a flight
schedule change constitutes a significant change is a preferred
approach as compared to the current policy of allowing airlines to set
their own timeframes. This approach provides much needed clarity and
consistency to consumers with respect to their rights to refunds, no
matter on which airline they travel.
The Department has further concluded that covering early departure
of the initial flight segment and late arrival of the final flight
segment is reasonable and workable for airlines and ticket agents, and
beneficial to consumers. Commenters have varied perspectives on whether
the definition of significant change should be based on early or late
departure of the initial flight segment or the late arrival of the
final flight segment. We have considered some airlines' comments that
the timeframes should apply only to flight late arrivals (delays) but
not early departures, as well as FlyersRights' comment that the
timeframes should apply to change in flight departure time (early or
late departures) regardless of whether consumers' arrival time is
significantly changed. We disagree with these suggestions. The
Department has concluded that it is important to ensure that the
definition of significant change includes both early departure as
consumers may not be available to take the flight significantly earlier
than scheduled, and late arrivals, because arriving significantly later
than scheduled may make the trip moot (e.g., job interview) or severely
disrupt travel plans (e.g., miss embarkation of a cruise). In contrast,
the Department does not believe that a late departure would cause as
much disruption, so long as the consumer arrives at the final
destination without substantial delay. As FlyersRights pointed out,
consumers are already at the departure airport while waiting for a
delayed departure flight, and the late departure alone does not add
significant amount of additional time to the total time that the
consumers already carved out for travel.
Regarding the timeline that would constitute a significant
departure and arrival time change, the Department agrees with the
comment provided by the State Attorneys General and others that the
proposed three-hour timeframe for domestic itineraries and six-hour
timeframe for international itineraries constitute a significant
departure and arrival time change. The Department acknowledges that
several airlines' current refund policies adopt shorter timeframes than
the proposed three/six-hour standards, and the Department notes that
these airlines are not only permitted under this final rule to continue
these polices but are encouraged to do so. The Department establishes a
baseline to set the minimum consumer protection requirement, and the
Department expects that healthy competition in the marketplace will
lead to airlines adopting consumer-friendly refund policies that go
above and beyond the regulatory minimum. The Department will closely
monitor airlines' implementation of this final rule and the impact on
consumers to determine whether the three/six-hour timeframes are
adequate to ensure that consumers who experience significant
disruptions and inconveniences from airline flight schedule changes
receive refunds if they so choose.
The Department is not persuaded by NACA's argument that ULCCs are
unduly burdened by the three/six-hour standard and it would ultimately
cause higher airfares. The fact that at least one ULCC has already
implemented for some time a refund policy with a schedule delay
threshold lower than the Department's minimum standard indicates that
the three/six-hour standard can work well with ULCCs' unique business
model and competition strategies, and it will not be detrimental to
maintaining ULCCs' fare structure.
The Department is also not persuaded by comments that a schedule
change accepted by the passenger should reset the calculation for
delays for the purpose of refunds. Under the final rule,
[[Page 32773]]
a consumer's acceptance of the flight schedule time change when the
original flight encounters expected early departure or late arrival or
a consumer's acceptance of another flight when the original flight was
cancelled does not reset the clock. The timeframes adopted here are
measured from the original departure and arrival times offered to
consumers when they purchased their tickets, and any deviation from
those times represents a change to the product that they agreed to and
paid for. By adopting these timeframes in the regulation, the
Department has deemed that any change to these original times by three
hours or more for domestic itineraries and six hours or more for
international itineraries are material and significant to consumers and
they are entitled to a refund if they do not accept the change, or any
alternative transportation offered. Although the Department understands
that flight schedule changes may occur multiple times before the
flight's actual operation, we believe it is fundamentally unfair to
consumers and it will defeat the purpose of this rule if we allow the
clock to reset every time a consumer accepts the time change to a
flight. In a typical rolling delay scenario, a domestic flight
initially projected to arrive two hours late could actually be delayed
for eight hours, with each new projection adding two more hours at a
time, and if the clock resets each time, the consumer would never be
entitled to a refund despite the lengthy delay.
Regarding RAA's comment that the refund requirement should exempt
situations involving flight diversions due to safety or security
concerns as long as passengers were ultimately transported to their
destinations, the Department does not view the refund requirement as
applying to these diversion situations. Typically, when a decision to
divert a flight is made, the flight has already departed and from the
passenger's perspective, the travel already took place. The passengers
would not have the opportunity to refuse the flight. For those
passengers, the issue of requesting compensation for their
inconvenience caused by the diversions will be addressed in the
Department's forthcoming rulemaking on Rights of Airline Passengers
When There Are Controllable Flight Delays or Cancellations.\33\
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\33\ See https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202310&RIN=2105-AF20.
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(ii) Change of Origination, Connection, or Destination Airport
The NPRM: The Department proposed to define a significant change
that would entitle a consumer to a refund to include a change of the
origination or destination airports. The Department reasoned that most
consumers are concerned about origin and destination airports when
booking a flight itinerary because of convenience and stated that a
carrier-initiated change in the origination or destination airport is
likely to lead to additional time and cost for consumers. The NPRM did
not propose to require refunds if a carrier changes the connecting
airport(s) and instead invited comments on whether a change of
connecting airports should also be considered a significant change that
would entitle consumers to a refund. Further, the NPRM asked whether
special consideration on refund eligibility should be given in
situations where passengers choose to connect at a particular airport
with extended layover time for specific purposes beyond connecting to
the next flight, such as conducting business or visiting family,
friends, or tourist sites at that location.
Comments Received: Airline commenters generally supported including
the change of an origination or destination airport as a ``significant
change of flight itinerary.'' They contended, however, that the
definition should exclude a change of airport involving airports
located in the same metropolitan area. A4A and AAPA suggested that a
change between two ``co-terminal airports,'' as defined by the
Transportation Security Administration's (TSA) regulation, should be
exempted.\34\ Airline commenters argued that these airports are
sufficiently close in proximity to each other, indicating that a change
of the airport would not necessarily significantly impact consumers'
travel plans. Some carriers further argue that allowing this exemption
would incentivize carriers to provide greater rebooking options. Air
Senegal provided long-haul international carriers' perspective by
arguing that these carriers' first and foremost goal is to provide
transportation between two major metropolitan gateways and a change of
airport within the same metropolitan area that is necessitated by
circumstances beyond the carrier's control (e.g., airport staffing
shortage, government public health restriction) should not trigger the
refund obligation. Airline commenters also supported the position that
a change of connecting airport should not be considered a ``significant
change of flight itinerary.'' IATA commented that if a passenger wishes
to have a longer layover at a particular airport, airlines should
accommodate by rebooking on another flight to that layover airport.
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\34\ Co-terminal [airport] means an airport serving a multi-
airport city or metropolitan area that has been approved by TSA to
be used as the same point for purposes of determining application of
the security service fee imposed under [49 CFR 1510.5]. See 49 CFR
1510.3.
---------------------------------------------------------------------------
Consumers, consumer rights advocacy groups, and ticket agent
representatives who commented on this issue were in support of the
Department's proposal. Two disability rights advocacy groups, Paralyzed
Veterans of America (PVA) and United Spinal Association, commented
that, from passengers with disabilities' perspective, any change to the
origination, connection, and destination airport should be considered a
``significant change of flight itinerary.'' They stated that when
booking flights, passengers with disabilities may rely on the specific
accessibility features of an airport to select the flights and
itinerary, and this may include selecting a particular connecting
airport based on the accessibility features needed to accommodate their
disabilities during the layover time.
DOT Responses: There is a consensus from all the comments received
that a change of the origination or destination airport in general
would significantly impact a passenger's travel plan and should be
considered a basis for a refund if the passenger no longer wishes to
travel. The Department disagrees with airlines' suggestion that the
regulation should exempt changes of airports located in the same
metropolitan area. In the Department's view, a change in the
origination or destination airport when located in the same
metropolitan area could still significantly impact passengers depending
on the passenger's specific circumstances including whether the new
airport is sufficiently close to their residence or the hotel so they
have the flexibility to navigate to or from the new airport without
substantial additional cost, whether they have the additional time
needed to travel to or from the alternative airport, and whether
affordable ground transportation is available for them to get to or
from the alternative airport. Given the potential impact, the
Department believes that the best approach is to require refunds if
passengers reject the change in origin or destination airport even if
in the same metropolitan area. The Department also believes that this
approach would not impose a substantial negative impact on long-haul
international carriers, who
[[Page 32774]]
stated that the main goal of their operations is to transport
passengers between two major metropolitan gateways. Passengers carried
on long-haul international flights who are focused on arriving at the
destination city as opposed to a specific airport can accept the
alternative airport offered by the carrier. The Department further
notes that in the case of flights being directed to a ``co-terminal''
airport due to government restrictions, such as a requirement to funnel
flights for communicable disease screening purposes, it is likely that
passengers would not have a choice to travel on an alternative flight
that is destined to the original airport. The Department believes that
passengers should have the choice of either traveling to the co-
terminal airport, which is likely to be the choice of many passengers,
and the option of receiving a refund.
With respect to a change of a connecting airport, the Department is
defining such a change to be a ``significant change of flight
itinerary'' only for consumers who are persons with a disability. The
Department continues to believe that a change in a connecting airport
would not impact most passengers because travelers' goal is to get to
the destination, and they generally care less about the connecting
airport. The Department is also not convinced that imposing a refund
mandate is necessary for passengers who specifically arranged to have
an extended layover at a connecting airport for other business or
leisure purposes. Consumer comments were generally silent on this
issue, and IATA has stated that airlines generally make such an
accommodation on their own when requested.
The Department has decided to require a refund to a passenger with
a disability \35\ and other passengers on the same reservation who
choose not to fly when the person with a disability does not accept a
change in the origination, destination, and connection airport. The
Department appreciates PVA and United Spinal Association sharing their
view that not defining a change to the origination, connection, and
destination airport as a ``significant change of flight itinerary''
would negatively impact persons with disabilities. The Department
accepts that a change of the origination, connection, or destination
airport may represent a significant change to a person with a
disability as the layout, design, and the availability of accessibility
features of these airports are a major consideration for persons with
disabilities when they select travel itineraries. A change of any of
these airports could cause great harm to passengers with disabilities
if the new airports are not as accessible as the original airports.
This change could affect, for example, a passenger traveling with a
service animal who carefully selected an airport with a service animal
relief area located near the passenger's connecting gate to accommodate
a tight connection timeframe, or a passenger with visual impairment who
chose a connection, origination, or destination airport that provides
wayfinding/mapping technologies through a mobile app. Further, the
Department is of the view that a change of airports, at a minimum, adds
uncertainties to the person with a disability regarding the
accessibility of the airport and that the passenger with a disability
is in the best position to conduct a risk assessment and determine
whether he or she still wants to travel from, to, or through a
particular airport.
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\35\ A passenger with a disability means an individual with a
disability who, as a passenger
(1) With respect to obtaining a ticket for air transportation on
a carrier, offers, or makes a good faith attempt to offer, to
purchase or otherwise validly to obtain such a ticket;
(2) With respect to obtaining air transportation, or other
services or accommodations required by this Part,
(i) Buys or otherwise validly obtains, or makes a good faith
effort to obtain, a ticket for air transportation on a carrier and
presents himself or herself at the airport for the purpose of
traveling on the flight to which the ticket pertains; and
(ii) Meets reasonable, nondiscriminatory contract of carriage
requirements applicable to all passengers. See 14 CFR 382.3.
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(iii) Increase in the Number of Connection Points
The NPRM: The NPRM proposed that adding to the number of connection
points in an itinerary qualifies as significant change that entitles a
consumer to a refund if the consumer no longer wishes to travel. The
Department explained that the number of connection points in an
itinerary would significantly affect the value of a ticket because the
more connection points, the more likely passengers will experience
flight irregularities, complications, and disruptions, as well as
mishandled checked baggage. As evidence, the Department pointed out
that airfares are generally higher for an itinerary with fewer
connection points than an itinerary with more connection points.
Comments Received: Airline commenters unanimously opposed
considering adding connection points as a ``significant change.'' Large
U.S. airlines argued that connections are a fundamental part of
carriers' network structure and carriers should be allowed the ability
to consider all available options to reroute passengers, including
through additional connecting points. ULCCs argued that because of
their small networks and the lack of interline partners, they may have
to rebook passengers with more connections, and this would penalize
ULCCs and other small carriers despite their best effort to
reaccommodate passengers. Carriers also argued that adding connections
does not necessarily mean consumer inconveniences and, in some cases,
passengers may even arrive earlier than the original schedule. These
carriers asserted that additional connections without adding more
travel time or significant delay should not be considered a
``significant change.'' IATA commented that this proposal directly
conflicts with the APPR, the Canadian regulation protecting air
travelers, which includes obligation to reroute passengers on a
reasonable route, including connections.
U.S. Chamber of Commerce also opposed the proposal, stating that in
cases of severe weather or major disruptions at a hub airport, it is
necessary to rebook passengers on itineraries with more connections to
ensure that they get to their destinations as swiftly as possible.
Unlike airlines, National Consumers League and FlyersRights
supported the Department's proposal to define significant change to
include additions in the number of connection points on a flight
itinerary. PVA and United Spinal Association also expressed their
support for the proposal, stating that adding connections is a
significant change to passengers with disabilities because additional
connections mean additional inconveniences, increased chance of
passenger injury during transfer, boarding, deplaning, and increased
chance of damage to assistive devices such as wheelchairs, which may
further lead to passengers being forced to use loaner chairs while
waiting for their wheelchairs to be repaired, causing other health and
safety concerns. These disability organizations also commented that
more harm may occur from extended overall travel time to passengers
forced to dehydrate themselves during travel because they cannot use
the lavatories, or passengers who need to minimize the time spent in an
airport wheelchair. In this regard, PVA suggested that extending the
layover time by more than one hour is a significant change.
DOT Responses: The Department has decided to include an increase in
the number of connections in a flight itinerary in the definition of
``significant change of flight itinerary.'' The Department finds the
comments by PVA and United Spinal Association about the substantial
inconveniences, and in some
[[Page 32775]]
cases, potential harm and injury to passengers with disabilities from
additional connections to be compelling. The Department further views
that adding connections may also negatively affect passengers who do
not have a disability in many ways. It is a common sense that when a
non-stop itinerary becomes a one-stop itinerary, or a one-stop
itinerary becomes two-stop itinerary, each added stop indicates
increased chance of irregularities, including the potential of missed
flights and/or delayed baggage due to short connecting times, flight
delays due to weather or air traffic control issues at the additional
connecting airport, and additional complications related to traveling
with young children or the elderly.
The Department disagrees with IATA's comment that considering an
additional connection as a ``significant change'' under which a refund
is due conflicts with APPR. Under APPR, carriers are obligated to
provide passengers the option of rerouting or refunds.\36\ APPR does
not prohibit carriers from providing a refund if a consumer does not
wish to be rerouted or does not accept the rerouting offered by
carriers. Also, this final rule does not require carriers to provide a
refund if the passenger prefers a rerouting even if that rerouting
includes additional connections. The Department believes that the APPR
and this final rule, when working together, increase choices provided
to consumers affected by cancellations and significant changes and
empower consumers to choose the best options for themselves, either
rerouting or receiving a refund.
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\36\ See Air Passenger Protection Regulation (SOR/2019-150)
(APPR), Sections 17-18. https://laws-lois.justice.gc.ca/eng/regulations/SOR-2019-150/.
---------------------------------------------------------------------------
The Department is also not convinced that allowing additional
connections to be a basis for a refund would impede carriers' ability
to offer alternative itineraries including itineraries with additional
connections. As stated throughout this document, the goal of defining
``significant flight itinerary'' is to set a baseline for consumers'
rights to refunds when they are affected by a qualified change by
providing them an opportunity to evaluate any alternative
transportation offered by carriers against the option of obtaining a
refund. The fact that a consumer is eligible for a refund because of a
significant change does not mean airlines cannot or should not offer
alternative transportation. In addition, there is nothing in the
Department's regulation that prevents carriers from fully utilizing
their networks and offering options with different connecting points to
passengers. For example, if a passenger's non-stop flight is cancelled
and the carrier determines that traveling on a set of connecting
flights would get the passenger to the destination sooner than waiting
on the next non-stop flight, the carrier is free to make the offer, and
the passenger will likely accept the offer if the additional connection
is acceptable and arriving at the destination sooner is more important
to that passenger than a non-stop flight.
(iv) Change of Aircraft Resulting in Significant Downgrade of Available
Amenities and Travel Experiences
The NPRM: While acknowledging that substitution of aircraft is
often required for operational reasons, and that most substitutions do
not substantially affect consumers' travel experience, the Department
proposed that a change of aircraft would be considered a significant
change entitling the affected passengers to a refund only if it results
in ``a significant downgrade of the available amenities and travel
experiences.'' The NPRM recognized that aircraft substitution may
impact passengers differently, noting that an aircraft change may
impact a passenger traveling with a wheelchair when the wheelchair no
longer fits in the cargo compartment of the new aircraft, but it may
not impact another passenger, even one with a disability. The NPRM
proposed that the lack of certain disability accommodation features as
the result of aircraft change, such as onboard wheelchair storage
spaces and moveable armrests, which negatively impacts the travel
experiences of persons with a disability and their access to services
onboard, would be considered a ``significant change'' that entitles the
passenger to a refund upon request. The Department solicited comments
on how to determine whether an aircraft downgrade is a significant
change, whether it should be a case-by-case analysis, and whether there
are certain types of changes in amenities or air travel experiences
that should automatically be considered significant irrespective of the
affected person.
Comments Received: Airlines and their representatives expressed
strong concerns about the proposal and argued that the term
``significant downgrade of available amenities and travel experiences''
is too broad, vague, and subjective. U.S. Chamber of Commerce supported
the airlines' argument that the proposal is too vague and broad. A4A
suggested that in the absence of clear guidance on this term,
passengers could assert seat configuration changes, the lack of Wi-Fi,
a decrease in the number of available movies, and a reduction of seat
reclining degrees as a significant downgrade. A4A commented that if the
Department finalizes this category as a significant change, it should
allow airlines to establish and publish their own criteria and adhere
to the standard. IATA and Air Canada argued that this proposal would
significantly impact carriers operating multiple types of aircraft, or
airlines that are experiencing significant flight disruptions and
needing the flexibility to fully utilize all available aircraft to
mitigate total passenger inconveniences across the network. IATA
pointed out that the proposal does not consider the situations where a
substitute aircraft provides downgrades to certain amenities and
upgrades to other amenities. Airline commenters agreed that a change of
aircraft that impacts a carrier's ability to accommodate mobility aids
should be considered a significant change.
National Consumers League and FlyersRights expressed their support
of the Department's proposal to consider a significant downgrade of
available amenities and travel experiences to be a significant change
that would entitle consumers to a refund. FlyersRights added that
changes in aircraft size, stowage space, or seat size that no longer
allow passengers with disabilities to travel safely should be
considered a significant change. Several individual consumer commenters
also supported this proposal.
Among ticket agent representatives, USTOA opposed the proposal,
asserting that it is too subjective and thus unworkable. It further
commented that a change from a twin-aisle aircraft to a single-aisle
aircraft, the loss of Wi-Fi, or a change to an older version of
business class may have little impact on some consumers but more impact
on others. It opined that to determine whether a passenger is eligible
for a refund under the proposal may cause extensive and time-consuming
disputes between consumers and airlines and it is counter to the
Department's goal of achieving consistency across the industry. Global
Business Travel Association agreed that aircraft change causing a lack
of disability accommodation should be considered as a significant
change. It further stated that a service downgrade such as the lack of
Wi-Fi would materially impact the value of a flight to business
travelers.
Disability rights advocacy groups voiced their strong opinion that
aircraft changes affecting disability accommodations should be viewed
as significant changes for passengers with
[[Page 32776]]
disabilities. PVA commented that if a substitute aircraft cannot
accommodate a passenger's assistive device, carriers should accommodate
the affected passenger and any caregivers, family members, and other
companions on another flight of that carrier or other carriers, or
other mode of transportation without additional cost. All Wheels Up
commented that the Department should specify that refunds for the
affected passenger and others in the travel party are required when the
substitute aircraft cannot accommodate wheelchairs in the cargo
compartment. United Spinal Association also supported the position that
a significant change includes downgrade or change of aircraft without
equal accessibility features. It urged the Department to require
carriers to find accessible alternative transportation. PVA and United
Spinal Association also commented on additional accessibility-related
issues beyond the substitution of aircraft, which will be discussed in
detail in the next section.
Public Hearing: In addition to considering the public comments
filed in the rulemaking docket, at the request of A4A and IATA, the
Department also conducted a public hearing pursuant to the Department's
procedural regulation on rulemakings relating to unfair and deceptive
practices at 14 CFR 399.75. Such hearings are intended to afford
stakeholders an opportunity to present factual issues that they believe
are pertinent to the Department's decision on the rulemaking. One of
the subjects stakeholders raised during the hearing is how to determine
whether a downgrade of amenities or travel experiences qualifies as a
``significant change of flight itinerary.'' In the Notice \37\
announcing the hearing, the Department requested interested parties to
provide information on whether there are certain types of amenity
changes that should be considered ``significant'' changes that would
entitle a consumer to a refund and if so, whether the determination
should be made categorically or by airlines on a case-by-case basis.
The Department also requested information on how different airline
operational and pricing models affect onboard amenities and travel
experiences, and subsequently affect consumer expectations.
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\37\ 88 FR 13387, Mar. 3, 2023.
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During the public hearing, airline representatives reiterated the
view they expressed in the written comments to the NPRM that the
proposal undercuts the Department's goal of achieving consistency and
predictability to consumers who are affected by itinerary changes. They
pointed out that the proposal relies heavily on the subjective
expectations of travelers and the vague concept of ``significant
downgrade of available amenities and travel experiences'' creates
problems for all parties involved, leading to time-consuming and
unsatisfactory case-by-case adjudications by the airlines and the
Department. They suggested that if the Department proceeds to finalize
this proposal, it should explicitly limit qualifying downgrades to
those identified in the airlines' customer service plans. They further
indicated that airlines would support the concept of considering the
inability to accommodate a passenger's mobility device to be a
significant change. Representatives from FlyersRights and National
Consumers League both expressed their support of the proposal to
consider a change of aircraft that results in ``a significant downgrade
of the available amenities and travel experiences'' to be a significant
change that entitles consumers to a refund if they choose not to
travel. The representative from FlyersRights commented that the guiding
principle in determining what downgrades are significant should be
whether a typical passenger would have booked the flight knowing that
they would receive a downgrade of amenities or travel experiences. That
representative further commented that allowing airlines the sole
discretion to make the determination will lead to ever shifting
standards. The representative from National Consumers League commented
that if airlines were allowed to determine what downgrades are
significant, it is highly likely that airlines would define it so
narrowly as to make the consumers' rights under DOT regulation unusable
by most consumers. He suggested that the Department should adopt a
definition that covers as many services as possible to give consumers
the flexibility to determine what is and is not a significant downgrade
for them.
A representative from PVA spoke at the hearing regarding the broad
impact of flight itinerary changes on passengers with disabilities. In
addition to the impact of aircraft substitution on the transportation
of passengers' mobility aids, she also commented on changes of other
accessibility features that may lead to significant disruption to
passengers' travel, such as the lack of accessible lavatories. She
emphasized that passengers with disabilities should not be forced to
accept flights that cause unnecessary inconveniences or undesirable
circumstances because the negative impact of air travel extends not
only to the passengers but also to those who assist them during the
journey or at the destination. Therefore, she commented that any
determinations regarding significant changes should be made
categorically, considering the challenges faced by these passengers.
Representatives from Travel Tech and Travel Management Coalition
spoke on behalf of ticket agents. While supporting the Department's
proposal in principle, they emphasized the importance of designating
airlines with the responsibility to determine whether a change of
available amenities or travel experiences caused by aircraft
substitution is a significant change. They commented that ticket agents
rely on clear guidance from both the regulatory bodies and airlines to
make these determinations.
A public participant provided her opinions as an expert on consumer
law on this issue by suggesting that the Department should adopt a
``reasonable consumer'' standard. She commented that the determination
should be a case-by-case analysis and encouraged the Department to
provide guidance but not adopt a rigid definition.
Following the hearing, A4A, IATA, Spirit, USTOA, and PVA filed
supplemental written comments on this issue. A4A and IATA's joint
comment emphasizes their position to support a rule requiring refunds
when aircraft downgrade prevents the transportation of a passenger's
mobility aid, when an accessible lavatory is no longer available on the
flight, when an on-board wheelchair requested by a passenger is no
longer available, or when moveable armrests are not available on the
aircraft. Spirit commented that a rule consistent with the Department's
oversales regulation should be adopted to require a refund for the
amenity not provided, but not a refund for the full fare. USTOA
comments that, in addition to its written comment on the NPRM, it
continues to strongly oppose the proposal as it believes that
consistency and predictability are necessary and crucial elements in a
final rule which would be lacking if the Department adopts the proposed
standard. USTOA adds that public interest will not be served by
adopting the proposal that introduces further confusion into the ticket
refund process and leaves sellers of travel to grapple with case-by-
case determinations. PVA's comment urges the Department to establish a
clear definition to include downgrades of amenities and travel
experiences for passengers using mobility devices. PVA further provided
examples of downgrades that affect these passengers, including
circumstances in which the
[[Page 32777]]
mobility aids will not fit in the cargo compartment or in-cabin
stowage, loss of lavatory access and/or on-board wheelchair, and loss
of movable armrests.
DOT Responses: After carefully considering all the comments, the
Department has determined that adopting the proposal to include in the
definition for ``significant change of flight itinerary'' any aircraft
change that leads to ``significant downgrade of available amenities or
travel experiences'' applicable to all passengers is not practical and
workable, and as a result, we are modifying the proposal to cover
specific passengers who are categorically protected and would be
affected by this ``significant change.'' The Department recognizes the
ambiguity and subjectivity of the proposed term ``significant downgrade
of available amenities and travel experience'' and has determined that
adopting this term and requiring airlines and ticket agents to conduct
a case-by-case analysis will lead to tremendous confusion among
consumers, airlines, and ticket agents, who would incur significant
administrative costs when disputes arise. The Department also believes
that outside of accessibility features, most discomfort and
inconvenience caused by aircraft substitution-related changes can be
addressed between airlines or ticket agents and their customers without
a regulatory mandate on ticket refunds. In another part of this final
rule, the Department is adopting the proposal to require airlines to
provide refunds for any ancillary service fees when the services that
consumers paid for are not provided. The Department believes that this
strikes a good balance between ensuring that consumers receive a refund
of the ancillary service fees for services that they did not receive,
including due to aircraft substitution, and avoiding the major
administrative complication related to determining what amenities or
ancillary services are so significant to a passenger that their loss
warrants a refund of the entire ticket.
On the other hand, the Department strongly agrees with the
disability rights organizations that any change of aircraft that leads
to the unavailability of an accessible feature needed by a passenger
with a disability is a significant change and should entitle the
passenger to a refund. We recognize that for persons with disabilities,
a downgrade of onboard amenities or travel experiences from aircraft
substitution may have serious negative implications on the passengers'
health and safety and may fundamentally change these passengers'
decision about travel. As such, the Department determines that aircraft
substitution leading to an accessibility feature being unavailable to a
passenger with a disability who needs the feature is categorically a
``significant change'' for that passenger. The Department notes that
comments from airlines focus on a change involving the inability to
transport a wheelchair in the cargo compartment, which is an example
provided in the NPRM. The Department's final rule, however, is broader
than that example. Under this final rule, airlines and ticket agents
are required to refund to a passenger with a disability who no longer
wishes to travel if an aircraft change leads to the loss of one or more
accessibility feature needed by that passenger. Such features would
include, but are not limited to, in-cabin stowage of assistive devices,
a movable armrest, accessible lavatories, on-board wheelchairs, and
cargo stowage of mobility aids. The Department is also requiring
airlines and ticket agents to provide refunds to other individuals
traveling with the passenger with a disability in the same reservation,
if the passenger with a disability no longer wishes to travel due to a
significant change impacting accessibility. Details of this requirement
will be discussed in Section B below.
The Department also notes that although the rule does not
specifically require airlines to provide refunds to passengers who are
affected by aircraft substitution outside of the disability
accommodation grounds, we expect that airlines will continue to assess
the impact of aircraft substitution on each passenger based on the
passenger's situation and consider providing refunds when appropriate.
(v) Downgrade in the Class of Service
The NPRM: The NPRM proposed that a carrier-initiated downgrade in
the class of service is a ``significant change of flight itinerary''
and would entitle a passenger to a refund if the passenger decides not
to continue travel. The NPRM noted that under the Department's
oversales regulation, when a passenger on an oversold flight is offered
accommodation or is seated in a section of the aircraft for which a
lower fare is charged, the passenger is not entitled to be denied
boarding compensation but is entitled to an appropriate refund for the
fare difference, assuming the passenger traveled on the flight in the
downgraded class of service.\38\ Here, the NPRM proposed that when a
passenger is downgraded to a lower class of service, either on the
originally booked flight or on an alternative flight offered by the
carrier, and the passenger declines to take the downgraded flight, a
refund of the entire unused portion of the ticket must be offered. The
NPRM explained that the Department views a downgrade in the class of
service as significantly changing the passenger's ticket value and
travel experience and entitling the consumer to a refund of the ticket
price and any unused ancillary services if the consumer does not
travel. The NPRM further clarified that the proposal is not limited to
situations where the entire flight or the class of service the
passenger was initially booked on was oversold. Downgrade of a
passenger's class of service could occur for other reasons such as
weight and balance or change of aircraft. The NPRM asked whether the
Department should require airlines to provide a refund of only the
ticket price difference, and not mandate a full refund if the passenger
does not accept the downgrade, similar to the existing oversales
regulation.
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\38\ See 14 CFR 250.6(c).
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Comments Received: Airline representatives opposed the Department's
proposal of considering a downgrade of the class of service a
significant change, arguing that it would disincentivize carriers from
rebooking affected passengers on the same aircraft but in a lower class
of service. They expressed their belief that a downgrade to a lower
class of service should only result in a refund of the fare differences
because the passenger would be provided with the flight as scheduled.
IATA stated that if this proposal is adopted, minors and companions
traveling with the downgraded passenger should not be eligible for a
refund if they were not downgraded as well. This position was supported
by Qatar Airways. IATA further requested that the Department define a
change in ``class of service'' as a change of cabin to avoid any
confusion. Air Canada suggested that the proposal, if adopted, would
conflict with certain provisions of EC 261/2004, which requires
compensation as opposed to refunds for certain downgrades. SATA
suggested that the Department should adopt a similar requirement as EC
261/2004 that requires a percentage of refund according to the amount
of fare paid and the flight distance.
DOT Responses: The Department has carefully considered this issue
and determined that although not all passengers view a downgrade to a
lower class of service so significantly that they would prefer to not
travel on the flight, there are a substantial number of passengers who
would be impacted significantly by a downgrade and would
[[Page 32778]]
prefer a refund. The Department believes that affected passengers
should be given the choice of either accepting the change and
continuing to travel or receiving a refund. The Department notes that
many passengers with disabilities select a certain class of service
when booking tickets for reasons related to their disabilities. For
example, a higher class of service may provide extra legroom needed by
passengers with a mobility impairment or traveling with service
animals. Besides passengers with disabilities, other passengers may
find a downgrade not acceptable because it substantially affects their
travel experiences. For instance, a passenger of size being downgraded
to a lower class of service may no longer wish to travel because of the
discomfort associated with the reduced seat pitch and width, and this
is particularly a concern for these passengers on long flights.
The Department is not convinced that this requirement would
disincentivize airlines and ticket agents from offering to rebook
passengers in a lower class of service, either on the original flight
or another flight. As in all the other scenarios involving significant
changes, carriers and ticket agents are free to offer a variety of
other options to affected consumers so long as they are informed about
their right to a refund. Consumers can choose the option that best
meets their needs, including traveling in a lower class of service.
Carriers and ticket agents are incentivized to make these offers to
passengers to fill vacant seats on aircraft.
The Department clarifies that this final rule requiring carriers
and ticket agents to provide a refund to passengers who choose to not
travel when being downgraded to a lower class of service does not
negate carriers' and ticket agents' obligation to refund the fare
differences when passengers choose to travel in a lower class of
service. This will continue to be the requirement regardless of whether
the downgrade was due to an oversales situation or any other situation.
The Department does not believe that requiring airlines and ticket
agents to provide a refund to passengers who are downgraded to a lower
class of service conflicts with the laws of other jurisdictions,
including EC261. Like the Department's oversales rule that requires
carriers to refund the fare differences to passengers who are
continuing to travel on a lower class of service, EC261 requires that
carriers refund between 30% to 75% of the ticket price, depending on
the distance of the flight, to a downgraded passenger who is continuing
the flight. In contrast, this final rule simply addresses the situation
in which the passenger chooses not to travel on the original or
rebooked flight in a lower class of service, a situation that is not
directly addressed in EC261.
As suggested by IATA, the Department is also adopting a definition
of class of service in the final rule to avoid any confusion. A class
of service is defined as seating in the same cabin class such as First,
Business, Premium Economy, or Economy class, based on seat location in
the aircraft and seat characteristics such as width, seat recline
angles, or pitch (including the amount of legroom). Premium Economy
would be considered a different class of service from standard Economy,
while Basic Economy would not. Basic Economy seats do not differ in
pitch size or legroom from standard Economy.
In situations where a group of passengers are traveling under the
same reservation, the Department generally is not requiring airlines to
offer refunds to all passengers in the group if not all passengers are
affected by a downgrade of class of service, except when the affected
passenger is a qualified individual with a disability and the downgrade
of class of service affects an accessibility feature needed by that
passenger, in which case refunds must be offered to all passengers in
the group upon notification by the passenger with a disability or
someone authorized to act on behalf of the passenger with a disability
that the person with a disability does not intend to continue travel on
that flight.
B. Individuals Entitled to Refunds When a Significant Change Impacts
Accessibility
The Department agrees with comments received from disability rights
organizations and is requiring a refund to a passenger with a
disability and other passengers on the same reservation who choose not
to fly because the person with a disability does not accept a
significant change of flight itinerary resulting from a change in
aircraft or class of service that results in the unavailability of one
or more accessibility features needed by the person with a disability.
The Department is also requiring a refund to person with a disability
and others on the same reservation who do not wish to continue to
travel because the person with a disability does not accept a
significant change in flight itinerary resulting from a change in
connecting airport. The Department believes that a change in the flight
itinerary that reduces the accessibility of the air travel to a person
with a disability must entitle not only that individual to a refund but
also all other individuals on the same reservation.
The Department notes that being a qualified individual with a
disability alone may not necessarily entitle travel companions to
refunds. This final rule requires carriers to provide passengers with a
disability affected by a change in aircraft or downgrade of a class of
service a refund if they do not continue travel. That refund is limited
to the individual being downgraded, however, unless the downgrade
results in the unavailability of one or more accessibility features
needed by the person with a disability. In that case, individuals who
are not directly affected by the downgrade of class of service are also
entitled to a refund. For example, if a passenger with a hearing
impairment was downgraded to a lower class of service and it is
determined that the downgrade does not impact any accessibility feature
needed by that passenger, that passenger is entitled to a refund if he
or she does not accept the downgrade, but airlines and ticket agents
are not required to extend the refund offer to other persons in the
same reservation who are not downgraded. Conversely, if a passenger
needing extra legroom to accommodate a disability was downgraded and
the extra legroom is no longer available as a result, that passenger is
entitled to a refund and so are any other persons in the same
reservation. For an aircraft change to entitle travel companions of a
person with a disability to a refund, the aircraft change must result
in the unavailability of one or more accessibility features needed by
the person with a disability and that person with a disability must
reject the significant change.
The Department believes that extending refund eligibility to travel
companions of passengers with disabilities whose ability to travel
comfortably or safely is significantly impacted by a flight itinerary
change that affects accessibility is appropriate because family members
or other individuals with whom the person with a disability is
traveling may not wish to continue travel without that person. Also,
the person with a disability may be traveling with a personal care
assistant. The requirement that refunds must be offered to all
passengers in the same reservation is intended to provide flexibility
for passengers to determine whether the group wants to travel together,
decline travel and receive refunds together, or split up with some
continuing to travel and some (including the passenger with a
disability) canceling travel and receiving refunds. Airlines and ticket
[[Page 32779]]
agents may not mandate that all members of the group make the same
decision about refunds but may refuse refunds if the only passengers
requesting refunds are those who would not have qualified for a refund
but for traveling with the passenger with a disability.
The Table below summarizes the rights to a refund by individuals
with disabilities and their travel companions on the same reservations
under certain significant changes that may impact accessibility.
Table 1--Rights to a Refund by Individuals With Disabilities and Travel
Companions
------------------------------------------------------------------------
Are travel
companions on the
Is an individual same reservation
with a disability entitled to a
Significant change entitled to a refund if an
refund? individual with a
disability rejects
change?
------------------------------------------------------------------------
Aircraft Substitution:
Impacts an accessibility Yes............... Yes.
feature needed by a
passenger with a disability.
Does NOT impact an No................ No.
accessibility feature
needed by a passenger with
a disability.
Downgrade in Class of Service:
Impacts an accessibility Yes............... Yes.
feature needed by a
passenger with a disability.
Does NOT impact an Yes............... No.
accessibility feature (NOTE: any (NOTE: if travel
needed by a passenger with passenger companion is
a disability. downgraded is downgraded then
entitled to that individual
refund would be entitled
irrespective of to refund).
disability).
Change of Connecting Airport:
Does not require analysis of Yes............... Yes.
impact on accessibility.
------------------------------------------------------------------------
The Department acknowledges that the disability organizations also
requested that the rule impose a requirement on airlines and ticket
agents to rebook passengers with disabilities and their travel
companions on another flight or ground transportation that would
accommodate the disability without additional cost. The Department is
examining the issue further in its rulemaking on Ensuring Safe
Accommodations for Air Travelers with Disabilities Using
Wheelchairs.\39\ The Department is committed to continuing its efforts
to protect the rights of air travelers with disabilities and is further
exploring how to accommodate their needs during flight disruptions in
this separate rulemaking.
---------------------------------------------------------------------------
\39\ See 89 FR 17766 (Mar. 12, 2024).
---------------------------------------------------------------------------
The Department recognizes that the special considerations given to
passengers with disabilities and their travel companions due to a
significant change of flight itinerary impacting disability
accommodations may lead to some passengers falsely claiming that they
have a disability that was impacted by a change of connecting airport
or an aircraft substitution, as well as to an entire travel group
requesting refunds based on a false claim that one passenger in the
group has a disability the accommodation of which was affected by a
significant flight itinerary change. Consistent with the Department's
Air Carrier Access Act regulation, when conducting inquiries regarding
how a passenger's disability accommodation needs are impacted by a
significant change, carriers should never ask about the nature or the
extent of a passenger's disability. Carriers can ask questions about an
individual's ability to perform specific air travel-related functions
that may be impacted by the change. For example, carriers should not
ask ``what is your disability?'' but may ask ``what is the
accessibility feature that is needed that is no longer available
because of the aircraft substitution or change in class of service?''
Also, the Department notes that an advance request for disability
accommodation recorded in the passenger's reservation before the
significant change occurred can serve as evidence that the passenger is
a qualified individual with a disability and the significant change
indeed impacts the accommodation for that disability. However, some
individuals with disabilities may not request assistance in advance,
but a significant change of flight itinerary may nonetheless impact an
accessibility feature that they need, resulting in them no longer
wishing to travel. As such, the Department cautions that lack of such a
notation is not sufficient on its own as proof that the individual is
not a person with a disability.
5. Entities Responsible for Refunds
The NPRM: The NPRM described the significant volume of refund
complaints against ticket agents received by the Department during the
COVID-19 pandemic and states that this is an indicator that
strengthening protections for consumers purchasing air transportation
from ticket agents is needed. These complaints also illustrated the
difficulty that consumers sometimes encounter in obtaining a refund for
a ticket purchased through a ticket agent when consumers do not have
the means to determine whether the airline or ticket agent needs to
take action to process the refunds and which entity is in possession of
the consumers' money. To address this difficulty, the NPRM proposed
that ticket agents who ``sold'' the tickets would be responsible for
issuing refunds when they are due. It further explained that a ticket
agent would be considered to have ``sold'' the ticket at issue if the
ticket agent is the entity shown in the consumer's financial charge
statements such as debit or credit card charge statements (commonly
known as the ``merchant of record''). Under the proposal, a ticket
agent obligated to provide a refund under this standard would be
required to issue refunds promptly irrespective of which entity has
possession of the funds. In the NPRM, the Department shared that it
considered placing the obligation of providing the refund on the entity
that is in the possession of the funds but did not propose this
approach because which entity is in possession of the funds would not
necessarily be clear to the consumer because multiple entities may be
involved in the transaction process.
With respect to airlines' obligations to provide refunds in
codeshare and interline situations, the NPRM proposed that the
marketing carrier of an itinerary involving codeshare or interline
flights
[[Page 32780]]
would be responsible for providing the refund, regardless of whether
the marketing carrier is also the operating carrier of the flight(s)
affected by a cancellation or a significant change or whether the
marketing carrier is the carrier that cancelled or made a significant
change to the flight itinerary. The NPRM explained that this approach
benefits consumers by streamlining the process to obtain refunds and
expects that carriers will be able to develop a system with their
codeshare and interline partners to ensure that refunds are provided in
a timely manner. The NPRM sought comments on the costs associated with
establishing such a system for interline and codeshare partners to
process refunds according to this proposal and whether there are
technical obstacles that should be considered.
Comments Received: Airline commenters agreed that the refund
requirement should apply to ticket agents when they are the merchants
of record for the ticket sales or have otherwise paid for the ticket on
behalf of the passenger. In supporting this position, airlines argued
that they are incapable of issuing refunds for tickets purchased
through ticket agents or other third parties because airlines may not
be in possession of the passenger's payment information and/or personal
contact information and airlines often do not have full visibility of
the prices paid by consumers, especially in situations where ticket
agents purchase bulk fares from airlines to resell to consumers. IATA
commented that when consumer funds collected by ticket agents are
processed through IATA's settlement system, the Billing and Settlement
Plan (BSP), ticket agents are responsible for filing for reimbursement
from airlines via the settlement system, and the airlines determine
refund eligibility. A4A supported the proposed standard to hold ticket
agents responsible for refunds when the ticket agents are the merchants
of record, or the consumer has paid by cash or check to the ticket
agent. A4A stated that it is the standard practice today and should be
codified in the Department's regulation. Both A4A and IATA as well as
several airline commenters supported applying the refund requirement to
ticket agents globally who sell tickets for covered flights. Several
consumer commenters expressed their support to hold ticket agents
responsible for refunds, describing their frustrations in chasing
refunds between the airline and the ticket agent.
Ticket agents and their trade representatives voiced strong
opposition to the proposal that requires ticket agents who are the
merchants of record to provide refunds irrespective of whether they are
in possession of consumer funds. Many ticket agent commenters
acknowledged that in the vast majority of transactions involving ticket
agents, airlines are the merchants of record.\40\ They argued, however,
that although ticket agents have the technical ability to issue refunds
when they are the merchants of record, they should not be required to
do so because the consumer's funds were often remitted to airlines
through the settlement systems immediately or shortly after ticket
booking, and requiring ticket agents to refund before they receive the
funds back from airlines would significantly impact the cashflow of
ticket agents, especially ticket agents that qualify as small
businesses.\41\ Many commenters opined that such a requirement is
fundamentally unfair because ticket agents have no control over
airlines' cancellation or change of flights, nor do they have any
control over the determination on whether a consumer is eligible for a
refund. Ticket agents also argued that the process of returning funds
from airlines to ticket agents through intermediary settlement systems
such as the Airline Reporting Corporation (ARC) system typically takes
much longer than seven days. Hundreds of small business ticket agent
commenters further argue that the impact of such a requirement on
ticket agents is so profound that many of them would consider stopping
offering airline tickets booking services, which has the potential
consequence of disrupting a major airline tickets distribution channel
and causing consumers to lose the valuable travel advisory services
offered by ticket agents.
---------------------------------------------------------------------------
\40\ For example, according to American Society of Travel
Advisors (ASTA), it estimates that between five and eight percent of
all airline ticket transactions by credit cards facilitated by its
members have the ticket agents appear as the merchants of record,
with the majority of which involving group bookings, air-inclusive
tour packages, or resale of consolidated fares.
\41\ ASTA states that its data indicates that 98% of travel
agencies qualify as ``small businesses'' under the Small Business
Administration (SBA) size standards.
---------------------------------------------------------------------------
Additionally, several ticket agents trade associations contended
that ticket agents lack information regarding consumers' refund
eligibility and any alternative transportation or compensation offered
by airlines and accepted by consumers. They argued that airlines should
have the sole responsibility to determine refund eligibility and timely
communicate such information to ticket agents. Further, ASTA stated
that to process a refund through settlement systems such as ARC, ticket
agents must first receive an Electronic Authorization Code directly
from airlines, confirming the flight coupon has been changed to a
refund status, which minimizes duplicate refunds and prevents fraud.
Ticket agent commenters suggested that the Department should revise its
proposal and require ticket agents who are the merchants of record to
issue refunds only when they receive confirmation of refund eligibility
and funds from the airlines, and that the Department should not impose
refund deadlines on ticket agents until all these conditions are met.
ASTA also expressed concerns about how to determine which entity is
the merchant of record, commenting that consumers may not know which
entity is the merchant of record by looking at the credit card
statement. ASTA stated that some credit card issuers would identify
both the airline and the ticket agent on the consumers' credit card
statements to reduce the likelihood that consumers mistakenly dispute
the charges because they did not recognize the transactions. ASTA also
asked the Department to clarify that when a ticket agent appears on a
consumer's credit card statement as the merchant of record for charging
a service fee, it would not trigger the ticket refund requirement. ASTA
further stated that more clarity is needed on how to determine which
entity is the merchant of record when tickets are not paid by credit
cards or debit cards.
The ACPAC also discussed the issue of ticket agents' responsibility
to refund and heard from numerous ticket agent representatives about
the potential impact on their businesses should the Department adopt
the proposal. The ACPAC recommended that the Department adopt the
proposed standard to hold ticket agents responsible for refunds when
they ``sold'' the tickets. Further, in recognition of the potential
financial impact on small businesses, the ACPAC recommended that the
Department revise the proposal to provide some relief for ticket
agents.\42\ Specifically, the ACPAC recommended that the Department
impose a requirement on airlines to return the consumer funds to ticket
agents within seven days of receiving the refund requests, and that
ticket agents that qualify as ``small businesses'' under the standard
set forth
[[Page 32781]]
by the Small Business Administration (SBA) be given up to 14 days,
instead of seven days, to issue refunds.
---------------------------------------------------------------------------
\42\ Among the four members of ACPAC, three members voted in
support of this recommendation and the member representing airlines
abstained, expressing concerns about whether the recommendation
regarding refund timeline is consistent with other Federal
regulations, i.e., Regulation Z.
---------------------------------------------------------------------------
On entities responsible for refunds for codeshare or interline
itineraries, IATA indicated that it supports the proposal to require
the marketing carriers be responsible for issuing refunds for codeshare
flights. IATA further commented that the Department should require the
operating carriers to refund any portion of the fare or fees paid by
the marketing carrier in the event a refund is due to passengers.
DOT Response: Sales by ticket agents constitute a major airline
ticket distribution channel. According to anecdotal data from the
Airline Reporting Corporation published in 2019, travel agencies
generated 44% of air segment sales.\43\ During the COVID-19 pandemic,
the unprecedented number of consumer complaints on refunds included a
significant number of complaints against ticket agents and tour
operators. In those complaints, consumers expressed frustration at
being sent back and forth between the ticket agent and the airline when
trying to obtain their refunds. As many commenters from the industry
have illustrated, in a typical airline ticket transaction involving
ticket agents as the merchant of record, the consumer funds are
transferred through various entities including intermediary settlement
systems. It is the Department's understanding that for those ticket
sales, the refund process reverses the flow of money among the entities
involved. Thus, focusing on which entity is in possession of the funds
when assigning a refund obligation is impractical and unworkable from a
consumer's perspective because consumers do not know which entity is in
possession of the funds at any given time. The Department continues to
view such uncertainty as a main driving force leading to additional
costs, delay, and confusion to consumers. Given this concern, the
Department declines to adopt the suggestion to assign refund obligation
based on which entity is in possession of consumer funds, and instead,
adopts the proposed standard to hold retail ticket agents responsible
for refunds when they ``sold'' the tickets to consumers as the
merchants of record. This requirement would cover retail ticket agents
of all sizes that conduct business online or via brick-and-mortar
stores that transact directly with consumers. The Department believes
that this bright line standard is the most effective way to address the
potential consumer confusion and frustration when there is more than
one entity involved in the selling of airline tickets. The Department
also agrees with airline commenters that holding ticket agents who sold
the tickets responsible for refunds addresses the issues that arise
when airlines do not have the consumers' payment and/or contact
information, or visibility of how much consumers paid for the tickets
when tickets are sold as consolidated fare or bulk fare, all of which
are necessary for processing refunds promptly and accurately.
---------------------------------------------------------------------------
\43\ Phocuswright White Paper--Air Sales and the Travel Agency
Distribution Channel, Airline Reporting Corporation, April 2019.
https://www.phocuswright.com/Free-Travel-Research/Air-Sales-and-the-Travel-Agency-Distribution-Channel.
---------------------------------------------------------------------------
The refund requirements for ticket agents apply to airfare or
airfare-inclusive travel package transactions in which the ticket
agents are the merchants of record for the transactions irrespective of
whether the ticket agent is in possession of the consumer funds at the
time when the refund is due. The Department defines ``merchant of
record'' as an entity that processes consumer payments for airfare or
airline ancillary service fees and whose name appears on the consumer's
bank or similar transaction statement. Regarding ASTA's comment that
some credit card statements will list both the airline and the ticket
agent for the transaction, the Department understands that this is done
by credit card issuers with the intention to ensure that consumers
recognize the charges. As there is always one merchant processing the
card payment, consumers can contact their credit card issuers and ask
which entity is the merchant of record who imposed the charge. For
transactions paid by a payment other than credit cards or debit cards,
the transaction receipt provided to consumers should list the entity
that is responsible. In that regard, if the consumer purchased the
ticket with cash or check, the entity that issued the receipt should be
responsible for refunds.
The Department appreciates the information from the industry
regarding the flow of funds in ticket agent-involved airline ticket
transactions. It is the Department's understanding that ticket agents'
main concern is not about taking on the obligation to refund when they
are the merchants of record. It seems that their concern, instead, is
the obligation to refund according to the refund timelines even when
the funds have not been returned to them by the airlines. Ticket agents
emphasized that imposing this obligation regardless of whether they
have possession of the funds will place a significant burden on their
cashflow, particularly on ticket agents that are small businesses.
Accordingly, many commenters asked that, should the Department adopt
the merchant of record standard to hold ticket agents responsible for
refunds, ticket agents should be required to provide refunds only when
they receive the funds returned by airlines.
The Department disagrees with the approach proposed by ticket
agents that they would not be required to refund consumers until they
receive the funds from airlines because it would harm consumers should
airlines, who are not directly responsible for refunds, not timely
return the funds to ticket agents. The result of the ticket agents'
proposed approach is that consumers would have no meaningful timeline
within which they can expect to receive refunds. The Department has
considered the ACPAC's recommendation that there be an affirmative
obligation on airlines to return consumer funds back to ticket agents
within seven days of receiving a refund request from a ticket agent
when the airlines are not the merchants of record for the ticket sales.
While the Department agrees that airlines should return consumer funds
to ticket agents promptly in these situations, it is not persuaded that
DOT intervention into airlines' and ticket agents' business and
contractual arrangements is necessary at this time. The Department's
authority to prohibit unfair or deceptive practices in 49 U.S.C. 41712
is intended to protect consumers. The Department expects that airlines
and ticket agents both have the interest to negotiate, form, and adhere
to a standard procedure in handling consumer funds to ensure that
ticket transactions and refunds are processed smoothly to the benefit
of consumers, as well as the businesses involved.
Although the Department does not believe that ticket agents'
obligation to refund should be dependent upon receiving the return of
the funds from airlines, we acknowledge that before issuing the refund,
the ticket agent may need further information to verify whether a
refund is due under the Department's regulation. The NPRM states that
in most situations involving cancellations or significant changes,
there would be sufficient information (e.g., airlines' publications on
cancellations or flight itinerary change notifications sent to
consumers) to confirm refund eligibility without contacting airlines;
however, after reviewing comments, we realize that even in those
situations, ticket agents may need airlines' confirmation that the
affected consumers did not accept alternative transportation or other
compensation in lieu of refunds.
[[Page 32782]]
Comments submitted by ticket agents also state that airline ticket
settlement systems often incorporate a process under which airlines
need to issue refund authorization codes to prevent duplicate refunds
and fraud. To ensure that refunds to consumers are not unreasonably
delayed because ticket agents are waiting on airlines' confirmation of
refund eligibility, we are requiring airlines to determine whether
consumers are eligible for refunds and if so, inform ticket agents of
the refund eligibility without delay upon receiving the refund request
from the ticket agent. The Department's Office of Aviation Consumer
Protection will determine the timeliness of airlines' response based on
the totality of the circumstances, including how quickly the airline
took steps upon receiving the ticket agent's refund request to
determine refund eligibility and whether the airline informed the
ticket agent of the refund eligibility as soon as it has confirmed it.
The Department expects airlines and ticket agents to work together to
develop and enhance channels of communication to ensure that
information regarding passengers' refund requests and eligibility are
transmitted in an effective, accurate, and efficient manner.
This final rule makes it an unfair practice for airlines to fail to
timely confirm refund eligibility and communicate that eligibility to
ticket agents. Airlines not confirming refund eligibility in a timely
manner slow the refund process and cause substantial harm to consumers.
This harm is not reasonably avoidable by consumers, as they have no
control over how soon airlines inform ticket agents that a refund is
due so the ticket agents can begin to process the refund. The
Department also sees no benefits to consumers and competition from this
conduct. On the contrary, the Department views that not imposing this
requirement on airlines would allow airlines or ticket agents to keep
money that is due to consumers indefinitely, which in turn harms
consumers and competition by penalizing good customer service and
rewarding dilatory behavior.
For codeshare or interline itineraries sold by a carrier, the
Department is requiring the carrier that ``sold'' the airline ticket
(i.e., the merchant of record for the ticket transaction) to provide
the refunds, as this is the most straightforward standard from
consumers' perspective. Consistent with the rationale for the
``merchant of record'' approach that we adopted in determining ticket
agents' refund obligation, we believe the carriers who are the
merchants of record for the ticket transactions are in the best
position to process and issue refunds as they have direct visibility of
the passengers' payment instruments information and the total amounts
paid for the itineraries. The Department further notes that in most
codeshare or interline itineraries, the marketing carriers are the
merchants of record. The Department's focus is on making consumers
whole when their flights are cancelled or significantly changed, and we
decline to regulate how airlines manage the transfer and the return of
funds among themselves in the event of ticket refunds, as we expect
that airlines engaging in codeshare or interline arrangements will work
together on contractual agreements to ensure that account settlements
are conducted through the normal course of business dealing following
refunds provided to consumers.
6. Timing of Refunds
The NPRM: As explained in the NPRM, the Department's current refund
timeframes are based on the form of payment used for the ticket
purchase, i.e., seven days for credit card purchases and 20 days for
cash and other forms of payment. 14 CFR part 374 is the Department's
regulation implementing the Consumer Credit Protection Act and its
regulations, including Regulation Z of the Consumer Financial
Protection Bureau (CFPB) regulation, 12 CFR part 1026 (Regulation Z),
with respect to airlines issuing refunds for credit card purchases.
Regulation Z, in relevant provision under 12 CFR 1026.12(e)(1) provides
that ``when a creditor other than the card issuer accepts the return of
property or forgives a debt for services that is to be reflected as a
credit to the consumers' credit card account, that creditor shall,
within 7 business days [emphasis added] from accepting the return or
forgiving the debt, transmit a credit statement to the card issuer
through the card issuers' normal channels for credit statements.'' The
Department's own regulation in 14 CFR 259.5(b)(5) imposes a refund
timeline of 20 days on airlines for purchases made by cash or check. It
also specifies that the refund timeline starts after airlines receive
the complete refund request. With respect to ticket agents, the
Department's regulation in 14 CFR 399.80 requires that they make
``proper refund promptly'' when services cannot be performed as
contracted. Because Regulation Z impacts all consumer credit, ticket
agents are also subject to the refund requirement of Regulation Z (12
CFR 1026.12(e)(1)) with respect to refunds of credit card purchases.
Under its authority against unfair or deceptive practices, 49 U.S.C.
41712, the Department also requires that ticket agents provide refunds
for purchases by payments other than credit cards within a reasonable
time.
The NPRM's proposal on ``prompt'' refunds when they are due
requires airlines to issue refunds ``within 7 days of a refund request
as required by 14 CFR 374.3 for credit card purchases, and within 20
days after receiving a refund request for cash or check or other forms
of purchases.'' \44\ Similarly, the proposed rule on ticket agents
defines ``a prompt refund'' as ``one that is made within 7 days of
receiving a refund request as required by 12 CFR part 1026 for credit
cards purchases, and within 20 days after receiving a refund request
for cash or check or other forms of purchases.'' \45\ The NPRM sought
comments on whether these timeframes are appropriate when a carrier has
cancelled or made a significant change to a scheduled flight to, from,
or within the United States and consumers found the alternative
transportation offered to be unacceptable.
---------------------------------------------------------------------------
\44\ See proposed rule text for 14 CFR 259.5(b)(5), 87 FR 51550,
51576.
\45\ See proposed rule text for 14 CFR 399.80(l), 87 FR 51550,
51579.
---------------------------------------------------------------------------
Comments Received: IATA supported the 7/20-day refund timelines
under normal circumstances but argued that during public health
emergencies, airlines should have at least 30 days to process a refund
request. IATA stated that due to spikes of refund requests, some
airlines facing financial difficulties had to choose between delaying
refunds or going out of business. Air Canada argued that carriers
should have no less than 30 days to issue refunds in the original form
of payment, and the refund timeline should be suspended during major
crises. Air Canada stated that the proposed timelines are disconnected
from the actual time needed for refund processing by various parties
involved, and the situation can be more complex when the original
ticket was sold through a ticket agent. Air Canada further argued that
the refund timelines should consider situations that trigger the need
for more time, such as the original form of payment no longer being
valid, and the time needed to calculate the refund amount when the
ticket is partially used. A4A commented that the Department should
ensure that the 7/20-day refund timelines are consistent with
longstanding DOT enforcement precedent and Regulation Z by clarifying
that they are in reference to business days and not calendar days.
[[Page 32783]]
USTOA representing tour operators commented that the 7/20-day
timelines are reasonable so long as the sellers are in possession of
the funds. It further elaborated that for ticket agents, counting of
the timelines should not begin until the ticket agents are in
possession of the funds and have received refund eligibility
confirmation from airlines.
Ticket agent representatives also provided comments during the
ACPAC meetings regarding the financial difficulties they face if they
are required to issue refunds before receiving the funds back from
airlines. In recognition of the potential financial impact on small
businesses, the ACPAC recommended that the Department revise the
proposal to provide some relief for ticket agents. Specifically, the
ACPAC recommended that the Department impose a requirement on airlines
to return the consumer funds to ticket agents within seven days of
receiving the refund requests, and that ticket agents that qualify as
``small businesses'' under the standard set forth by the Small Business
Administration (SBA) be given up to 14 days, instead of seven days, to
issue refunds to consumers. \46\ In a joint comment filed by A4A and
IATA, the carrier representatives stated that this ACPAC recommendation
conflicts with Federal Reserve regulation (12 CFR 1026.11) and the
Department's rule (14 CFR 374.3). They further commented that the NPRM
did not propose to change the Department's refund regulations or
discuss a different refund standard and therefore adopting a different
refund standard in a final rule would violate the notice and comment
requirements of the Administrative Procedure Act.
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\46\ Among the four members of ACPAC, three members voted in
support of this recommendation and the member representing airlines
abstained, stating that he is unclear about whether this
recommendation is consistent with other Federal regulations, i.e.,
Regulation Z.
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Furthermore, airline commenters expressed concerns about passengers
not informing carriers of their decisions to reject the alternative
transportation offered until close to the flight's departure, therefore
depriving airlines the opportunity to resell those seats. IATA and Air
Canada argued that passengers should have the obligation to take
positive steps to inform airlines within a reasonable time after the
passenger is notified of a significant change and offered alternative
transportation. During an ACPAC meeting, the member representing
airlines also expressed similar concerns.
Some consumer commenters urged the Department to require airlines
to issue ``automatic'' refunds. They argued that airlines have the
incentive to adopt complex refund processes that make requesting
refunds cumbersome and difficult for consumers, engineered to dissuade
consumers from receiving their due compensation. Some commenters
provided examples of inefficient and complex refund request procedures
currently adopted by airlines, including hidden refund request links on
their websites, excessive data input requirements from consumers,
lengthy and confusing refund request forms, and excessive hold time for
requesting refunds over the telephone. In addition, PVA and United
Spinal Associates commented that when alternative transportation does
not provide the same or similar accessibility features or seating
arrangements, this deficiency should prompt an automatic refund offer.
DOT Responses: Based on the comments received, the Department is
addressing--(i) the meaning of prompt refunds, including during public
health emergencies; (ii) automatic refunds as a way to reduce
cumbersome refund request processes for consumers and ensure consumers'
rejection of the alternative transportation offered do not deprive
airlines of the opportunity to resell those seats; (iii) commencement
of refund deadlines; and (iv) the meaning of business day for purpose
of providing refunds.
(i) Prompt Refunds
In this final rule, we are requiring that airlines and ticket
agents provide prompt refunds when due. Prompt is defined to mean
within 7 business days of refunds becoming due for credit card
purchases, and within 20 calendar days of refunds becoming due for
purchases by cash, check, or other forms of payment. To the extent the
purchase is made by a debit card, the Department has reviewed the
relevant definitions in CFPB's regulations, including Regulation Z, and
has determined that a typical debit card does not fall under the 7-day
refund timeline that only applies to ``credit card'' and therefore
would be subject to the 20-day timeline.\47\
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\47\ The CFPB regulation defines a ``credit card'' as any card,
plate, or other single credit device that may be used from time to
time to obtain credit. See 12 CFR 1026.2(a)(15)(i). The term
``credit'' is defined as the right to defer payment of debt or to
incur debt and defer its payment. See 12 CFR 1026.2(a)(14). In
contrast, ``debit card'' is defined as any card, plate, or other
single device that may be used from time to time to access an asset
account other than a prepaid account. See 12 CFR 1026.2(a)(15)(iv).
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The Department has considered airlines' suggestion of additional
time to provide refunds including one airline's request for no less
than 30 days to issue refunds and to suspend the refund deadlines
during major crisis. The Department believes that maintaining the 7/20-
day refund timeline is reasonable as airlines and ticket agents have
been required to comply with these timeframes for decades. The
Department is also not convinced that extending or suspending the 7-day
timeline for credit card purchases during large-scale air travel
disruptions is either permissible under Regulation Z or warranted.
Taking the COVID-19 pandemic as an example, although the Department
recognizes the challenges airlines and ticket agents faced when dealing
with a significant increase of refund requests, the Department also
recognizes the financial difficulties average consumers faced during
the pandemic, including the impact of not receiving timely refunds of
airline tickets they paid for when the service is cancelled or
significantly changed. During such an event, the Department considers
consumers to be in need of the regulatory protection afforded by the
prompt refund requirements specified in this final rule. As discussed
earlier, the Department is adopting the proposal to hold ticket agents
responsible for refunds when they are the merchants of record for the
ticket transactions. We have considered comments by numerous small
ticket agents and the ACPAC's recommendation to provide small ticket
agents additional times to issue refunds by credit cards. After a
careful review of Regulation Z and relevant interpretations by CFPB, we
have determined that the Department does not have the discretion to
extend the 7-day refund timeline for credit card purchases, which would
contradict Regulation Z. The Department acknowledges the concerns of
small ticket agents regarding the financial burden to issue refunds
before receiving the funds back from airlines. We note that, as several
ticket agent commenters point out, that less than 10% of ticket
transactions involving air travel have ticket agents as the merchants
of record, for which they will be obligated to issue refunds. The
Department expects that outside of a massive disruption to air
transportation on a national or global scale, ticket refund requests
made to small ticket agents due to airline cancellation or significant
change should be rare. In addition, the Department is mandating that
airlines confirm refund eligibility before a
[[Page 32784]]
refund is due by ticket agents.\48\ We expect that this requirement,
along with the tolling of the refund timeline discussed below, will
alleviate the financial burden on small ticket agents.
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\48\ In an enforcement notice issued by the Department's Office
of Aviation Consumer Protection (OACP) on March 12, 2020, the
Department states that it interprets the requirement for ticket
agents to provide refunds to include providing refunds in any
instance when the following three conditions are met: (1) an airline
cancels or significantly changes a flight, (2) an airline
acknowledges that a consumer is entitled to a refund, and (3)
passenger funds are possessed by a ticket agent. See, https://www.transportation.gov/airconsumer/FAQ_refunds_may_12_2020. The
Department has reconsidered this issue and determined that the final
rule appropriately ensures that consumers receive prompt refunds as
required by the rule and are not caught in the middle between
airlines and ticket agents, but also provides safeguards for ticket
agents in the requirement for airlines to verify refund eligibility
before the refund timeline starts.
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(ii) Automatic Refunds
The NPRM proposed that the 7/20-day refund timelines start upon
airlines or ticket agents ``receiving a complete refund request'' from
consumers. After considering the comments from consumers and the
industry, the Department has determined that under certain
circumstances where consumers' rights to refunds and their intention to
receive a refund are unequivocal, using consumers' explicit refund
requests as the starting point for computing the refund timelines is an
approach that imposes an unnecessary burden on consumers. Consumers in
comments expressed their frustrations about the cumbersome process to
request and receive a refund following a flight cancellation or
significant change, at times waiting for hours on the phone, digging
through cumbersome airline websites to find a link for requesting a
refund, or having to navigate through extra ``digital paperwork'' to
complete a refund request form. The Department is persuaded by
consumers that in these circumstances automatic refunds are warranted.
For example, if a flight is cancelled and no alternative transportation
or compensation is offered to the passenger in lieu of a refund, the
carrier must refund the consumer because the contracted service was not
provided. Similarly, if a flight is significantly changed and the
consumer rejects the significantly changed flight and no alternative
transportation or compensation is offered to the passenger in lieu of a
refund, the carrier must refund the consumer because the contracted
service was not provided. It is inefficient and unreasonable for the
carrier to wait to receive an explicit refund request from the consumer
in such situations. Also, if alternative transportation or a travel
credit, voucher, or other compensation is offered to a consumer for a
canceled flight or a significantly changed flight and the consumer
rejects the alternative transportation or compensation offered, then
the carrier should refund the consumer without further delay because
the contracted service was not provided and the consumer rejected the
alternative offered. It should not be necessary for the consumer to
separately request a refund because the rejection of the alternatives
offered is tantamount to a request for a refund.
The Department acknowledges airlines' concerns about consumers not
rejecting a significantly changed flight or a booked alternative flight
itinerary after being notified of such an offer until closer to flight
operation, thus depriving airlines the opportunity to sell the seats
for revenue. Under this final rule, airlines may set a deadline that
provides reasonable time for a consumer to decide whether to accept the
existing itinerary with a significant change or an airline's offer of
alternative transportation in lieu of a refund. To determine whether a
carrier provided consumers reasonable time to consider the options and
make a decision, the Department will look primarily at when the
cancellation or significant change occurred, how soon after the carrier
became aware of the flight cancellation or significant change that the
carrier notified affected consumers of this event and made an offer of
alternative transportation, and how close the consumer notification is
to the scheduled departure date of the significantly changed flight or
the alternative transportation offered.
The Department recognizes that some consumers may not respond to a
carrier's offer of a significantly changed flight or an alternative
flight by the deadline. To ensure that consumers understand the
potential consequences of not responding by the deadline, the
Department is also requiring airlines when notifying affected consumers
of a significantly changed flight or offering alternative flight to
inform consumers whether the carrier will treat the lack of response by
the deadline as a rejection (i.e., prompt refund to be provided but
reservation is no longer held for passenger) or an acceptance (i.e.,
reservation held for passenger but passenger forfeits right to a
refund) of the offer. A carrier may determine whether it will treat the
lack of response by the deadline as a rejection or an acceptance of the
offers, but such determination must be adopted as a customer service
policy applicable universally to all passengers of the carrier. Any
change to the policy applies only to passengers who booked their
tickets after the effective date of the change. If a carrier chooses
not to set a deadline for the consumer to respond to the offer, the
carrier is essentially giving the consumer the option to decide until
the date of the significantly changed flight or the alternative flight
as to whether to accept or decline the offer. Under these
circumstances, the consumer taking the significantly changed flight or
the alternative flight is an acceptance of the offer and the consumer
not taking the flight is a rejection of the offer. Again, if the
consumer has rejected an offer of alternative transportation (informed
airline of rejection of alternative transportation, failed to respond
within the timeframe provided by the carrier after carrier notified
passenger that lack of a response to offer of alternative
transportation would be deemed a rejection, or did not take the flight
when the carrier did not set a deadline for a response to an offer of
alternative transportation), there is no need for the consumer to send
a separate request for a refund.
To ensure consumers have reasonable time to consider and respond to
the options offered by a carrier, the Department is requiring carriers
to notify consumers of the options available to them in a timely
manner. It is an unfair practice for airlines to not timely notify
consumers of their options yet impose a short deadline to respond. Such
a practice harms consumers by depriving them of a reasonable time to
consider their options. The failure to fully inform consumers of the
consequence of not responding by the deadline (i.e., losing their money
paid for the ticket or losing their seats on the booked flights) is
also an unfair practice. Such a practice harms consumers by omitting a
material matter in the notification, and the omission would negatively
affect consumers' conduct. Both harms are not reasonably avoidable by
consumers because consumers would not have known about material matters
unless they were informed. These practices do not benefit consumers or
competition--rather these practices would hinder transparency and
causes inefficiency in airlines' inventory management. As such, the
Department is requiring carriers to provide timely notification to
affected consumers about the options available to consumers when a
flight is canceled or significantly changed, any responsive deadline,
and the consequence of not responding by the deadline. For carriers
that have in
[[Page 32785]]
place notification subscription services, this notification must be
provided through media that the carriers offer and the subscribers
choose, including emails, text messages, and push notices from mobile
apps. As the content of the notification may be over the size limits of
text messages or mobile app push notices, carriers may include in a
text message or push notice a link to the consumer's reservation page
on its website, where the full content of the notification is
displayed.
In addition to notifying affected consumers, this final rule
requires that carriers provide clear, conspicuous, and accurate
information in their customer service plan regarding the carriers'
policies and procedures on refunds and rebooking including when
consumers are non-responsive to carriers' offers of significantly
changed or alternative flights. More specifically, the Department is
amending 14 CFR 259.5 to require carriers to incorporate into their
Customer Service Plans a commitment to disclose relevant refund and
cancellation policies as provided in 14 CFR part 260, including
policies related to consumers' right to a refund due to airline-
initiated cancellations or significant changes, consumers' right to
``automatic refunds'' under certain circumstances, consumers' right to
refunds and rebooking when consumers are non-responsive to carriers'
offers of significantly changed or alternative transportation. This
information is intended to better inform consumers about their rights
before purchasing tickets and whenever questions arise later. The
Department considers any misrepresentation or omission of material
matters regarding a consumer's rights when airlines and ticket agents
publish their refund polices or notify consumers affected by a canceled
or significantly changed flight to constitute an unfair practice in
violation of 49 U.S.C. 41712. Consumers who are not provided complete
and accurate information about their rights are not likely to choose
the options that best suit their needs. For example, consumers who are
offered alternative transportation but not notified of the need to
respond before an airline-imposed deadline may lose their rights to a
refund or lose the flight reservations that they intend to keep. This
is a substantial harm that cannot be reasonably avoided by consumers
because consumers have no way to fully understand their rights without
being notified by airlines or ticket agents. Airlines or ticket agents
not providing clear, accurate, and complete notifications to consumers
harms competition because it hinders the development of open and fair
competition that maximizes consumer choices based on information
transparency. The Department further views such misrepresentation or
omission as a deceptive practice because misrepresenting or omitting a
material fact relating to a consumer's right to a refund or other
options available in lieu of a refund in the carrier's customer service
plan is likely to deprive that consumer of important information that
could impact which carrier the consumer selects for the air
transportation and similar misrepresentation or omission in
notifications provided to consumers affected by significant change and
cancellation could impact the choice that the consumer makes between a
refund and another option.
(iii) Commencement of Refund Timelines
The Department's existing refund regulation requires that a refund
must be provided within the required timelines after receiving a
``complete refund request.'' The Department did not use this language
in the proposed rule but ``acknowledge[d] that for transactions in
which a ticket agent would be responsible for issuing a refund if due,
before issuing the refund, the ticket agent may need further
information to verify whether a refund is due under the Department's
regulation.'' \49\ After carefully reviewing the comments received, the
Department is of the view that the obligation of a ticket agent to
provide refunds should begin when the ticket agent receives
confirmation about the passengers' refund eligibility from airlines.
Under this final rule, the 7/20-day refund timelines start at the time
the ticket agent receives the eligibility confirmation from the
airline. For example, if an airline confirms that the passenger is
eligible for a refund on day 3, the 7 or 20-day refund timeline for the
ticket agent starts on day 3. Airlines and ticket agents are encouraged
to establish effective communication channels and airlines are expected
to work expeditiously to confirm refund eligibility. The Department
does not view tolling the refund timelines for lack of essential
information needed for refunds to be contradictory to Regulation Z, as
Regulations Z's 7-day refund timeline starts from the time a ``creditor
other than the card issuer'' ``accepting the return [of property] or
forgiving the debt.'' In the Department's view, an airline or ticket
agent should not be expected to accept the return of property or
forgive the debt until it can be confirmed that the consumer is
eligible.
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\49\ 87 FR 51550, 51563.
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(iv) Business Days
In this final rule, the Department is requiring refunds be provided
within seven business days of when it is due for credit card purchases
and within 20 calendar days of when it is due for cash and other forms
of payment. The Department agrees with A4A's comment that the 7-day
refund timeline should be consistent with CFPB's Regulation Z. The CFPB
regulation defines ``business days'' as a day on which the creditor's
offices are open to the public for carrying on substantially all of its
business functions.\50\ CFPB's Official Interpretation of its
definition explains that ``[a]ctivities that indicate that the creditor
is not open for substantially all of its business functions include a
retailer's merely accepting credit cards for purchases. . . .'' \51\
CFPB also explains that ``activities that indicate that the creditor is
open for substantially all of its business functions include the
availability of personnel to make loan disbursements, to open new
accounts, and to handle credit transaction inquiries.'' \52\
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\50\ 12 CFR 1026.2(a)(6).
\51\ https://www.consumerfinance.gov/rules-policy/regulations/1026/interp-2/#2-a-4-Interp-3.
\52\ Id.
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Based on CFPB's Official Interpretation of its definition, the
Department has decided not to use the days that airlines and ticket
agents accept credit cards for purchases of airline tickets and related
services to determine business day. Instead, the Department is focusing
on the days on which the offices of airlines and ticket agents are
typically open to process refund requests and defining business day to
be Monday through Friday, excluding Federal holidays in the United
States. By defining business day in this simplified manner, the
Department is providing regulatory clarity to airlines and ticket
agents regarding their obligations to provide prompt refunds.
Importantly, consumers can also easily understand their rights and
advocate for themselves when regulations are defied or disregarded. The
Department expects that this clarification regarding refund timeline
for credit card payment refunds will enhance transparency and
consistency in the airline ticket refund process but will revisit this
issue in the future should it be necessary.
The Department notes that the CFPB regulation is not applicable to
the DOT
[[Page 32786]]
requirement concerning providing refunds within 20 days for purchases
paid by a payment other than a credit card. As is the case currently,
the Department is continuing to require airlines and ticket agents to
provide refunds for non-credit card purchases within 20 calendar days.
The Department has amended the regulation text accordingly.
7. Amount and Form of Refunds
The NPRM: Under the NPRM, when ticket refunds are due because of a
significantly changed or canceled flight, a passenger would be entitled
to receive a full refund equal to the ticket purchase price including
government-imposed taxes and fees and carrier-imposed fees and
surcharges (such as fuel surcharges), minus the value of any air
transportation that is already used by the passenger. To calculate the
value of any used portion of the air transportation when determining
the amount of refunds, the Department suggested that airlines rely on
established industry practices and guidelines.
On the form of refunds, the NPRM explained that the Department
intends to explore ways to provide consumers, carriers, and ticket
agents more flexibility in issuing and receiving refunds. As such, the
NPRM proposed to allow airlines and ticket agents to choose whether to
refund passengers by returning the money in the original form of
payment or by providing the refund in cash or a form of cash
equivalent, including prepaid cards, electronic fund transfers to
passengers' bank accounts, or digital payment methods such as PayPal or
Venmo. The NPRM stated that a carrier- or ticket agent-issued travel
credit or voucher or a store gift card is not considered a cash
equivalent form of payment because these forms of compensation are not
widely accepted in commerce. Further, the Department considered that
when a carrier or ticket agent issues a prepaid card, any maintenance
or usage related fees should be prepaid into the card by the issuer in
addition to the full amount of refund that is due. The NPRM asked
whether this proposal would be beneficial to consumers, carriers, and
ticket agents as intended and whether there are any unintended negative
impacts.
Comments Received: Airlines generally did not object to the
proposal to require a refund of the full ticket price including taxes
and fees. However, A4A and IATA commented that the refund amount should
exclude any government taxes and fees that are non-refundable. This
position was supported by the U.S. Chamber of Commerce.
FlyersRights argues that amount of refunds for cancelled or
significantly changed flights should include a premium if the
cancellation or significant change occurs close to the scheduled
departure date as consumers will likely have to pay a much higher price
for another ticket. Also, hundreds of consumer commenters stated that a
refund of the ticket is inadequate to address the costs and
inconvenience to passengers when a flight cancellation or significant
change occurs mid-journey. PVA stated that a refund by itself is
useless when a passenger with a disability is stranded.
On the form of refunds, most airlines commenters supported the
proposal to allow carriers and ticket agents to choose between the
original form of ticket payment and another form that is cash-
equivalent, stating that this would provide flexibility to carriers,
ticket agents, and consumers. Spirit Airlines argued that refunds
should be in the original form of payment, expressing concerns about
the privacy of cash equivalent payments that potentially expose
consumers to scam and confusion. Qatar Airways also supported the
position that the default refund form should be in the original form of
payment and stated that only when the original form of payment service
declines the refund should another form of payment be used. Travel
Management Coalition also favored the refund being issued in the
original form of payment and added that if the Department directs
another form of refund, the refund timeframe should be extended. Global
Business Travel Association commented that refunds should be directed
back through the original form of payment for business travelers to
ensure that the business, not the traveler, is refunded.
DOT Response: After carefully considering the comments, the
Department is finalizing the proposal to require airlines and ticket
agents to provide full refunds to eligible passengers of the ticket
purchase price, minus the value of any portion of transportation
already used. The refunds must include all government-imposed taxes and
fees and airline-imposed fees, regardless of whether the taxes or fees
are refundable to airlines. The Department disagrees with the airlines'
position that consumers should bear the burden of any non-refundable
government taxes and fees when consumers have not initiated, caused, or
contributed to the cancellation or significant changes to their flight
itineraries.
Regarding how best to calculate the value of any portion of
transportation already used, the Department emphasizes that carriers
are expected to adhere to established industry practice and treat
consumers fairly. The Department will view any arbitrary deviation from
industry practice in calculating the value of the unused portion to the
detriment of the consumer to be indicative of an unfair practice.
Further, any assigned value to a used or unused segment that is
significantly disproportionate to the distance covered by that segment
(e.g., assigning 10% of the total ticket value to the unused segment
that covers 50% of the total travel distance) will be viewed as a prima
facie unfair practice unless carriers can justify the assignment with
established and verifiable industry practice.
Although the final rule requires carriers to refund only unused
portion of the ticket price if a passenger has used a part of the
ticket, the Department acknowledges the comment from a consumer
organization regarding consumers having to pay a premium to purchase a
new ticket when their flights are cancelled or significantly changed
close to the scheduled departure date, as well as comments that flight
cancellations or significant changes impact consumers more
significantly when they have already traveled a portion of the
itineraries, particularly persons with disabilities. Consumers stranded
at a connecting airport by a cancellation or significant change face
not only the challenge of limited choices for continuing travel or
returning to their origination airport, but also increased cost of
food, lodging and other expenses. These comments reflect consumers'
concern that simply refunding the ticket price may not adequately
compensate the actual cost to consumers from airline cancellations or
significant changes. The Department's rulemaking on Rights of Airline
Passengers When There Are Controllable Flight Delays or Cancellations
\53\ intends to examine how best to ensure passengers' needs are
addressed beyond refunds including essential services such as meals,
rebooking, and hotel as well as compensation to mitigate passenger
inconveniences when there is a controllable cancellation or delay.
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\53\ See fn. 29, supra.
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To reduce the likelihood of consumers embarking on a journey
without knowledge of a downstream cancellation or significant change,
the Department reminds carriers of their obligation under 14 CFR 259.8
to
[[Page 32787]]
promptly provide to passengers who are ticketed or hold reservations,
and to the public, information about a change in the status of the
flight within 30 minutes after the carrier becomes aware of a change in
the status of a flight. These notifications are important to ensure
that consumers are aware of any known flight itinerary or schedule
changes and cancellation that would affect their travel downstream
before they begin the journey to avoid being stranded mid-travel and
facing difficult choices. Also, the Department reminds carriers of
their obligation under 14 CFR 259.8 to identify and adhere to the
services that it promises to provide consumers in their customer
service plan to mitigate passenger inconveniences resulting from flight
disruptions. Beginning in September 2022, the large U.S. carriers have
made significant changes to their customer service plans to improve
services provided to passengers when their flights are canceled or
delayed because of an airline issue (i.e., controllable cancelations
and delays). As a result, many U.S. customers impacted by controllable
cancellations and delays are entitled today to receive reimbursements
for expenses such as meals, hotels, and ground transportation.\54\ On
the form of refunds, the Department is convinced by commenters that the
best approach is to require that refunds be in the original form of
ticket purchase, and allow airlines and ticket agents to offer, in
addition to the original form of payment, other cash-equivalent
payments. The Department views that making the original form of payment
the default refund form has several benefits. First, it ensures that
all passengers, as a minimum, can receive their money back in the same
way they paid for the tickets, therefore avoiding the situations where
consumers are forced to accept an alternative payment form through
which they have no way to access cash directly. Second, it expedites
and streamlines the process of refunds in most situations by simply
reversing the ticket purchasing process using the payment information
already available to airlines or ticket agents. Thirdly, it avoids
complications in business travel by ensuring that businesses, as
opposed to travelers, receive the refunds. The Department notes that
under this final rule, all airlines and ticket agents are required to
provide refunds in the original form of payment, unless the passenger
has agreed to a different form of payment. Airlines and ticket agents
are permitted, but not required, to offer other forms of refunds that
are equivalent to cash, but only if it is made clear to the customer
that they have the right to receive a refund in the original form of
payment. Having received no comments on the proposed definition for
``cash equivalent,'' the Department is adopting the definition as
proposed, including the prohibition on requiring consumers to bear the
burden for maintenance fees, usage fees, or transaction fees related to
a cash equivalent payment method.
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\54\ See https://www.transportation.gov/airconsumer/airline-customer-service-dashboard, an easy-to-use dashboard that displays
airlines' commitments.
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8. Offers of Travel Vouchers, Credits and Other Compensation and
Notification to Consumers of Their Right to a Refund
The NPRM: The Department proposed to allow airlines and ticket
agents to offer but not require other compensation choices such as
travel credits or vouchers and store gift cards in lieu of refunds. The
NPRM recognized that while a refund in the original form of payment or
cash or a cash equivalent form of payment would be preferred by many
passengers, some passengers may prefer receiving travel credits or
vouchers or store gift cards. The proposal would allow airlines and
ticket agents the flexibility, at their discretion, to work with
passengers by offering more choices of compensation for interrupted
travel plans.
To ensure consumers know their right to a refund, the Department
also proposed to require carriers and ticket agents inform consumers
that they are entitled to a refund if that is the case before making an
offer for travel credits, vouchers, or other compensation in lieu of
refunds. Further, under the Department's proposal, the option for
carriers and ticket agents to offer compensation other than refund of
cash or cash equivalent when a carrier cancels or makes a significant
change to a flight itinerary must not be misleading with respect to the
passengers' rights to receive a refund. Under the proposal, airlines
and ticket agents must clearly disclose any material restrictions,
conditions, and limitations on the compensation they offer, so
consumers can make informed choices about which types of compensation
and refunds would best suit their needs.
Comments Received: FlyersRights and several consumer commenters
expressed their support for the proposal to require airlines to notify
consumers of their rights to a refund before offering other
compensation. Some commenters also stated that such disclosure should
be in clear language, using terms that ordinary individuals would
understand. All airline commenters who commented on non-cash equivalent
compensation supported the proposal to allow airlines and ticket agents
to offer these types of compensation to consumers who are eligible for
refunds. IATA and SATA also commented that the Department should allow
carriers to offer refunds when travel credits or vouchers are required
by the regulation. National Consumers League supported the proposal to
allow airlines and ticket agents to offer non-cash equivalent
compensation but argues that any travel credits or vouchers offered
should never expire.
DOT Response: This final rule is requiring airlines and ticket
agents to inform passengers entitled to receive a refund of their right
to a refund before making an offer for travel credits, vouchers, or
other compensation in lieu of refunds. The Department is persuaded by
comments of the importance of disclosing to consumers their rights to a
refund up front in plain language. Passengers lacking this information
may not be able to make an informed decision as to whether to obtain a
refund or accept other compensation. For similar reasons, the
Department is also requiring airlines and ticket agents to inform
passengers of their rights to a refund, if this is the case, when
offering a significantly changed flight or alternative transportation
for a significantly changed or cancelled flight.
To provide more flexibilities and choices to consumers, the
Department is allowing airlines and ticket agents to offer, in addition
to refunds, other compensation to eligible consumers. The Department
emphasizes the importance of carriers and ticket agents providing
clear, prominent, and accurate disclosures to consumers of their rights
to refunds when offering these options, and of any material
restrictions, limitations, and conditions on any compensation offered
as an alternative to refunds. The Department views any
misrepresentation or omission of these matters to be unfair and
deceptive practices in violation of 49 U.S.C. 41712. A consumer's
entitlement to a refund and restrictions, limitations, and conditions
on alternatives offered such as travel credits and vouchers in lieu of
a refund are material matters that are likely to affect consumers'
decisions with respect to whether they accept the offered voucher or
credit. The Department views misrepresenting or omitting the consumer's
right to a refund or the restrictions, limitations, and conditions that
apply on the compensation offered
[[Page 32788]]
as an alternative to refunds to be a deceptive practice because it
deprives that consumer of important information that could impact the
choice that the consumer makes between a refund and another option.
During the COVID-19 pandemic, the Department became aware of many
consumers who accepted travel credits and vouchers from airlines for
canceled or significantly changed flights because they were not aware
of their right to a refund or because they were not aware of the
restrictions that applied on their travel credits and vouchers. This
conduct is also an unfair practice because it causes substantial
consumer harm by depriving consumers of the knowledge that they are
entitled to a refund, which is not reasonably avoidable by consumers as
they are unable to obtain this knowledge unless they are informed by
the airlines or ticket agents. This conduct also harms competition
because, by avoiding issuing refunds to consumer, entities engaging in
this conduct gain unfair advantages over entities providing full
disclosure to consumers about their right to a refund.
9. Service Charges
The NPRM: The NPRM proposed that airlines may not charge a fee when
issuing a refund following a carrier-initiated cancellation or
significant change and that the terms or conditions in airline
contracts of carriage should be consistent with the proposed
regulation. With respect to refunds issued by ticket agents, the NPRM
proposed that ticket agents are permitted to retain the service fee
they charged for ticket issuance at the time of purchase in recognition
that ticket agents are providing a service apart from airfare purchase
and that service has been completed regardless of whether the passenger
took the flight. The NPRM further proposed that ticket agents may also
charge a fee for issuing refunds, reasoning that, unlike airlines,
ticket agents do not initiate the cancellation or significant changes
that result in a refund being due, nor do the ticket agents have any
control over the cancellation or significant changes to a flight
itinerary. The NPRM emphasized that the amount of the ticket issuance
service fee or refund processing fee that ticket agents may retain must
be on a per-passenger basis and the existence of the fee must be
clearly and prominently disclosed to consumers at the time they
purchased the airfare.
Comments Received: The Department received comments from consumers,
ticket agents, and airlines regarding service fees. Several consumers
opposed allowing refund processing fees charged by airlines. One
commenter noted that if airlines are allowed to charge such a fee,
there is nothing to prevent them from charging $100 or more. The same
commenter added that processing refunds is computerized and can be done
with a few keystrokes. Qatar Airways asserted that airlines should be
permitted to collect service fees, including fees for processing
refunds. Ticket agent representatives supported the proposal to allow
ticket agents to retain the ticket issuance service charge and refund
service fee, agreeing with the Department's rationale that issuing
tickets and processing refunds are separate services provided by ticket
agents independent of the value of the ticket. Travel Management
Coalition commented that when additional paperwork is involved to
verify refund eligibility, ticket agents should be allowed to charge a
service fee and it would be disclosed in a client agreement.
DOT Response: The Department reaffirms its belief that ticket
agents offer valuable services to the traveling public apart from
booking airfare, such as providing specialized knowledge of suitable
travel options in accordance with consumers' wants and capabilities,
offering access to limited availability fares or tools to comparison
shop across various airlines to find the best value for consumers, and
researching and booking activities at consumers' destinations (e.g.,
sightseeing tours, events). The Department is of the view that, even in
situations where the consumer did not travel because of a canceled or
significantly changed flight, it is reasonable for ticket agents to
retain service charges related to issuing the original tickets to the
extent the service charge is not simply for processing payment for a
flight that the consumer found. The Department views this service as
being independent of the value of the ticket. Also, regardless of
whether the passenger travels, the fee represents the cost of service
already provided by ticket agents. Under this final rule, ticket agents
may retain this type of service charge even if the passenger did not
travel due to an airline cancellation or significant change so long as
the nature and amount of these fees are clearly and prominently
disclosed to consumers when they purchase the tickets, and they are
assessed on a per-passenger basis.
The Department's Office of Aviation Consumer Protection would
consider undisclosed fees to be a deceptive practice in violation of 49
U.S.C. 41712. Pursuant to 14 CFR 399.79, a practice is ``deceptive,''
within the meaning of 49 U.S.C. 41712, to consumers if it is likely to
mislead a consumer, acting reasonably under the circumstances, with
respect to a material matter. A matter is material if it is likely to
have affected the consumer's conduct or decision with respect to a
product or service. A ticket agent's failure to disclose that the
service fee charged at the time of reservation is nonrefundable should
a ticket refund be due would likely mislead a consumer to reasonably
conclude that the entire amount paid for the ticket is refundable when
a ticket refund is due. Similarly, a ticket agent's failure to disclose
the existence and the amount of a fee for issuing a refund is likely to
mislead a consumer to reasonably believe that no such fee would apply
when a ticket refund is due. Failing to provide either disclosure would
be an omission of material information that may affect the consumer's
purchase decision because a consumer might choose not to purchase the
ticket if the consumer was aware that if a refund is due the amount of
the refund would be for less than the purchase price.
The Department does not address in this final rule whether a ticket
agent can retain a booking fee (i.e., a fee for processing payment for
a flight that the consumer found) when processing a refund for an
airline ticket because the passenger's flight was canceled or
significantly changed and the passenger no longer wishes to travel. The
Department notes that it is addressing the issue of whether carriers
can charge a booking fee separately from the ticket price as part of
another rulemaking.\55\ While that rulemaking is pending, the
Department's Office of Aviation Consumer Protection will focus on
whether the nature and amount of the booking fee was clearly and
prominently disclosed to a consumer at time of ticket purchase in
determining if an airline or ticket agent engaged in an unfair or
deceptive practice in violation of 49 U.S.C. 41712.\56\
---------------------------------------------------------------------------
\55\ In that rulemaking, the Department is examining whether
fees for basic airline services such as booking a ticket should be
included in the advertised fare and prohibited as a separate charge.
See https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202310&RIN=2105-AF15.
\56\ The Department's full-fare advertising rule requires all
mandatory fees to be paid by the customer to the carrier, or agent,
for air transportation to be included in the advertised fare. See 14
CFR 399.84. To the extent that a booking fee is not avoidable and is
a mandatory fee, it must be included in the advertised fare.
---------------------------------------------------------------------------
Regarding the issue of whether airlines or ticket agents can retain
a fee for processing refunds, the Department remains of the view that
airlines must refund the entire ticket price and not be permitted to
retain a fee for processing
[[Page 32789]]
refunds when airlines cancel or significantly change a flight and the
passenger no longer wishes to travel. The Department received consumer
comments objecting to refund processing fees by airlines for flights
that the airlines cancel or significantly change, and limited industry
comment in support of allowing such fees. In the Department's view,
airlines charging a service fee for processing refunds caused by an
airline-initiated cancellation or significant change is an unfair
practice in violation of section 41712. Consumers are substantially
harmed by having to pay a fee to receive their money back after
services they paid for were not provided. This harm is not reasonably
avoidable by consumers because consumers have no control over the
cancellation, significant change, or the issuance of the refund, with
or without a fee. The Department further views that allowing airlines
to charge a refund processing fee harms competition and consumers
because it reduces the incentives for airlines to minimize
cancellations and significant changes, based on which refunds are due
to consumers.
As for ticket agents, the Department is concerned that permitting a
ticket agent to charge a fee for processing refunds may be unfair to
consumers. While the Department recognizes that ticket agents do not
initiate the cancellation or significant changes that result in a
refund being due, neither does a consumer. The Department plans to
explore this issue further at a later time, including through its
rulemaking \57\ pursuant to a requirement by 49 U.S.C. 42301 note prec.
to issue a rule requiring ticket agents with an annual revenue of at
least $100 million to adopt minimum customer service standards. In the
meantime, the Department's Office of Aviation Consumer Protection will
focus on whether the nature and amount of the refund processing fee was
clearly and prominently disclosed to a consumer in determining whether,
when a refund is due, a ticket agent engaged in an unfair or deceptive
practice by charging a refund processing fee that was not properly
disclosed at the time of ticket purchase. Also, if the Department
determines that ticket agents' processing fees appear to circumvent the
intent behind the requirement for consumers to receive a meaningful
refund, the Department will consider whether further action is
appropriate.
---------------------------------------------------------------------------
\57\ Information on the rulemaking titled ``Air Transportation
Consumer Protection Requirements for Ticket Agents'' (RIN 2015-AE57)
is available in the Fall 2023 Unified Agenda of Regulatory and
Deregulatory Action at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202310&RIN=2105-AE57.
---------------------------------------------------------------------------
The Table below summarizes whether airlines or ticket agents can
retain certain fees when processing refunds.
Table 2--Fees Charged by Airlines and Ticket Agents When Processing
Refunds
------------------------------------------------------------------------
Are ticket agents
Are airlines allowed allowed to retain
Types of service fees to retain fee when fee when processing
processing refunds? refunds?
------------------------------------------------------------------------
Booking Fee (for processing No.................. N/A (DOT is not
payment for flight that the aware of ticket
consumer found). agents that charge
this type of
booking fees).
Service Fee Related to N/A (DOT is not Yes, subject to
Issuing Original Ticket aware of airlines required
(for services provided that charge these disclosures.
beyond processing payment types of service
for flight that the fees).
consumer found).
Processing Fee for Required No.................. No determination in
Refunds. this final rule--
DOT will continue
to examine issue.
------------------------------------------------------------------------
II. Refunding Fees for Significantly Delayed Bags
1. Covered Entities and Flights
The NPRM: In the NPRM, the Department proposed to mandate U.S. and
foreign air carriers provide refunds to consumers for the fees charged
to transport checked bags on scheduled flights to, from, or within the
United States using aircraft of any size if the bags are significantly
delayed. The Department explained that the proposed requirement is
based on a mandate in 49 U.S.C. 41704 note for the Department to
promulgate a regulation requiring U.S. and foreign air carriers refund
bag fees to consumers when carriers fail to deliver checked bags to
them within a specified time of their arrival on a domestic or
international flight. In the NPRM, the Department acknowledged that the
proposed requirement would apply to some small carriers but explained
that it does not expect it to have a significant economic impact on a
substantial number of small entities because many small carriers
operate flights under codeshare arrangements with larger carriers, with
the larger carriers responsible for collecting and refunding baggage
fees.
With respect to ticket agents, the Department did not propose to
apply the baggage refund requirements to ticket agents. The Department
stated in the NPRM that the Department has independent authority under
49 U.S.C. 41712, which prohibits ticket agents from engaging in unfair
or deceptive practices in air transportation, to include ticket agents
in the regulation if deemed appropriate. The Department stated,
however, that it is required by 49 U.S.C. 42301 note prec. to issue a
rule requiring ticket agents with an annual revenue of at least $100
million to adopt minimum customer service standards, and the Department
intends to address this requirement through that separate rulemaking.
In addition, the Department noted that a ticket agent's failure or
refusal to make proper refunds promptly when service cannot be
performed as contracted or a ticket agent's representation that such
refunds are obtainable only at some other point violates 14 CFR
399.80(l) and constitutes an unfair or deceptive practice. This
requirement does not, however, directly address whether ticket agents
that collect baggage fees from passengers must provide refunds of the
fees when checked bags are significantly delayed. DOT sought comments
on whether the proposed refund requirement for delayed checked bags
should apply to ticket agents who engage in the transaction of baggage
fees.
Comments Received: The Department received no comments regarding
the proposed scope of carriers that would be required to refund fees to
consumers for significantly delayed bags on their domestic or
international flights. The Department did receive comments on whether,
as a policy matter, the Department should require ticket agents to
refund baggage fees that they collected when the bags were
significantly delayed. A4A, IATA, RAA, and Qatar Airways all supported
holding ticket agents responsible for
[[Page 32790]]
refunds if they collected the baggage fees. Spirit also commented that
ticket agents should be required to refund baggage fees, arguing that
the Department has existing regulation requiring ticket agents to make
``proper'' ticket refunds when contracted services are not provided,
and it is arbitrary, inconsistent, and unfair to not require ticket
agents to refund baggage fees.
Travelers United commented that whether the ticket was purchased
from airlines or ticket agents, airlines should ultimately be
responsible for refunds of baggage fees and other ancillary fees.
Similarly, ASTA and Travel Tech both argued that ticket agents should
not be required to refund baggage fees. They pointed out that the
statute directs the Department to issue a rule specifically requiring
airlines to refund baggage fees. They argued that where ticket agents
collect the fees, they are authorized by airlines to do so as agents of
airlines. They noted that depending on the payment settlement system
used, ticket agents can facilitate the issuance of baggage fee refunds,
but each airline determines whether it would allow ticket agents to
issue refunds. They further commented that any fees collected by ticket
agents under airlines' authorization are promptly remitted to airlines.
DOT Response: In this final rule, the Department requires U.S. and
foreign carriers that operate scheduled passenger service to, within,
and from the U.S. to provide a refund to passengers of fees charged for
transporting a significantly delayed checked bag. The Department is
applying this requirement to carriers regardless of the aircraft size
that the carriers operate. DOT continues to believe that it is
important to not exclude aircraft designed to have a maximum passenger
capacity of 60 seats or fewer, which are considered small aircraft,\58\
because a significant number of passengers travel on such aircraft.\59\
---------------------------------------------------------------------------
\58\ An air carrier is a small business if it provides air
transportation only with small aircraft (i.e., aircraft with up to
60 seats/18,000-pound payload capacity). See 14 CFR 399.73.
\59\ According to data from the Department's Bureau of
Transportation Statistics (BTS), a total of 760,159,634 domestic
passengers were transported in 2022. While most of these passengers
(734,090,772 passengers or 96.6%) were on flights using aircraft of
more than 60 seats, a significant number (26,068,862 passengers or
3.4%) were on flights using aircraft with 60 seats or fewer. See
Bureau of Transportation Statistics ``T-100 Domestic Segment Data
(World Area Code)'', https://www.bts.gov/browse-statistical-products-and-data/bts-publications/data-bank-28ds-t-100-domestic-segment-data.
---------------------------------------------------------------------------
With regard to applying the proposed baggage refund requirements to
ticket agents, the Department does not adopt in this final rule a
specific requirement for ticket agents to provide refunds of baggage
fees for significantly delayed bags even if ticket agents collect the
bag fees. The NPRM sought information on ticket agents' involvement in
collecting baggage fees from passengers, either as a carrier's agent or
as a principal. It is the Department's understanding, based on comments
from both ASTA and Travel Tech, that ticket agents' involvement in
collecting baggage fees is minimal and the collections are generally
authorized by airlines as their agents. Also, the Department believes
that tracing mishandled baggage and ensuring delivery as soon as
possible is best handled by carriers through direct communication with
passengers. The Department is concerned that placing the obligation to
refund baggage fees for delayed bags on ticket agents may cause
unnecessary delays by removing some of the incentives for airlines to
recover the bags as quickly as possible. It would also necessarily
require that ticket agents determine whether refunds for significantly
delayed bags are due, which the ticket agents cannot determine on their
own. Further, 49 U.S.C. 41704 note directs the Department to promulgate
a regulation requiring airlines to provide refunds for baggage fees.
For all these reasons, the Department is not requiring ticket agents to
provide refunds of baggage fees for significantly delayed bags in this
final rule. The Department will continue to monitor the transactions of
baggage fees and other ancillary service fees conducted by ticket
agents and intends to revisit the issue in its rulemaking requiring
ticket agents with an annual revenue of at least $100 million to adopt
minimum customer service standards, as required by 49 U.S.C. 42301 note
prec.\60\
---------------------------------------------------------------------------
\60\ See fn. 55, supra.
---------------------------------------------------------------------------
2. Length of Delay Triggering Baggage Fee Refund Requirement
The NPRM: The Department proposed to require an airline refund the
fee paid by a passenger for a checked bag if the airline fails to
deliver the bag to the passenger within 12 hours of arrival for
domestic flights and within 25 hours of arrival for international
flights. 49 U.S.C. 41704 note prescribes the minimum lengths of baggage
delivery delay that would trigger the refund requirement as not later
than 12 hours after arrival for domestic flights and not later than 15
hours after arrival for international flights. It also provides the
Department the flexibility to modify these timeframes to up to 18 hours
for domestic flights and up to 30 hours for international flights if
the Department determines that the 12-hour or 15-hour standards are
infeasible and would ``adversely affect consumers in certain cases.''
The Department explained that it proposed 12 hours for domestic flights
because airlines have tracking systems in place to identify the
location of bags and airlines should be able to place delayed bags on
the next available flight, often resulting in bags being delivered
within 12 hours for domestic flights. With respect to international
flights, the Department proposed to allow carriers up to 25 hours (an
extension of the statutory default standard of 15 hours) to deliver
checked bags without having to issue a refund, reasoning that many
international long-haul flights are scheduled once a day which makes
recovery and delivery of a delayed checked bag within the minimum
length delay of 15 hours prescribed in the statute extremely
challenging for carriers. The Department stated that consumers may be
negatively impacted if the Department were to impose a 15-hour deadline
because carriers may have less incentive to deliver the delayed bag on
the next flight when flights are scheduled once a day. The NPRM
solicited comment on whether it has adequately considered the impact on
consumers and airlines of the proposed 25-hour deadline for
international flights and whether the proposed 12-hour deadline for
domestic flights is reasonable, particularly for ULCCs that may operate
scheduled flights in a lower frequency and lack interline agreements
with other carriers.
Additionally, the NPRM discussed a tiered standard where the
maximum number of delay hours that would trigger a refund would vary
based on domestic versus international flights, the length or frequency
of the flights, or other variables. The Department tentatively
determined to not propose a tiered standard based on flights' frequency
or length because carriers would have to implement a costly system of
sorting and prioritizing delivery of delayed bags based on the length
or frequency of each individual flight. It proposed instead a tiered
standard based on domestic and international flights because it would
be easier for carriers to implement and for consumers to understand.
For international itineraries that include domestic segments, the NPRM
proposed that the international standard for bag delay would apply.
Comments Received: Most airline commenters generally supported
adopting the maximum length of timeframes permitted by the statute,
i.e., 18-hour delay for domestic itineraries
[[Page 32791]]
and 30-hour delay for international itineraries, while AAPA opposed a
blanket timeframe by regulation and Kuwait Airways suggested a 72-hour
timeframe. A4A stated that carriers cannot meet the proposed 12 hours
for domestic and 25 hours for international standards under certain
circumstances, including itineraries involving routes for which
airlines do not operate daily flights, passengers traveling on the last
flight of the day out of a remotely located airport, and passengers
continuing travel on cruise or ground transportation preventing timely
delivery of bags. A4A, IATA, and multiple international carriers also
commented that special considerations should be given to international
operation complexities such as airport congestion preventing offloading
bags, weather impact on ground operations, the impact of a positive bag
match requirement, and customs and security inspections. RAA urged the
Department to consider that many carriers serving remote markets under
the Essential Air Service program or serving international markets may
only operate one flight a day and not every day. NACA, Allegiant, and
Spirit commented that from the ULCC perspective, operating low
frequency and the lack of interline partners makes it difficult to meet
the proposed timeframes. Some of these commenters believed that
adopting the 18/30-hour maximum standards would at least incentivize
ULCCs to seek other means (e.g., overnight couriers) when transporting
the bag on the next available flight would not meet the deadlines. Air
New Zealand, Emirates, Kuwait Airways, and Qatar Airways indicated that
the Department should give special consideration to ultra-long-haul
international operations, arguing that the length of flight operations
and the low frequency would prohibit their ability to meet the 25-hour
deadline. Airline commenters supported the proposal to apply the
international delay standard to domestic segments of international
itineraries.
Among consumer rights advocacy groups, Travelers United, Business
Travel Coalition et al.,\61\ and FlyersRights commented that checked
bags should be deemed late when they are not on the same flight as
passengers. Business Travel Coalition et al. argued that the Department
has its own authority under 49 U.S.C. 41712 to impose such a
requirement without contradicting 49 U.S.C. 41704, note. Travelers
United argued that refunds of bag fees should be issued automatically
if the bags do not arrive within 60 minutes of the passengers' arrival.
Business Travel Coalition et al. argued that the Department should
require airlines to enter into interline agreements for baggage
delivery. FlyersRights commented that by proposing a 25-hour standard
for international flights, the Department has considered that
international long-haul operations that operate one daily flight can
still meet the deadline by placing the bag on the next flight. In that
regard, FlyersRights questioned why the Department does not simply
require that the bag be transported on the next flight. FlyersRights
also stated that the 25-hour deadline would harm consumers on
international flights that are operated more than once a day because
bags that could have been transported within a shorter time now can be
delayed for up to 25 hours.
---------------------------------------------------------------------------
\61\ The joint comments by Business Travel Coalition et al. were
signed by Business Travel Coalition, Consumer Action, the Consumer
Federation of America, Consumer Reports, Ed Perkins of
EdOnTravel.com, FlyersRights.org, National Consumers League, Travel
Fairness Now, and U.S. PIRG.
---------------------------------------------------------------------------
ASTA, representing ticket agents, commented that the Department
should adopt the 12/15-hour minimum standards set by the statute. It
argued that while the proposed 25-hour standard acknowledges long-haul
flights operated once a day, it does not recognize many international
flights that are short in duration and operated multiple times a day.
ASTA further stated that it disagrees with the Department's belief that
imposing the 15-hour deadline for international flights would result in
carriers having less incentive to recover the bags because the deadline
has already passed. It argued that keeping the bag fees is not the
airlines' sole or primary purpose when considering recovering delayed
bags.
The Colorado Attorney General (Colorado AG) also provided comments
in support of the Department's tentative decision to not adopt a tiered
standard for the length of a delay triggering a refund based on
flights' frequency, length, or other variables. The Colorado AG stated
that a simplified system is certainly more accessible to all parties
and is an example of the type of regulatory clarity that, in effect,
protects consumers by enabling them to understand their own rights and
advocate for themselves when regulations are defied or disregarded.
DOT Responses: After fully considering the comments, the Department
is requiring carriers to refund the bag fee if a checked bag is delayed
the minimum statutory standard of 12-hours for domestic flights as
proposed, the minimum statutory standard of 15-hours for an
international flight that is 12 hours or less, and the maximum
statutory standard of 30-hours for an international flight that is more
than 12 hours. The Department appreciates consumer rights advocacy
groups' comments that urge the Department to adopt a ``zero hour''
standard for delayed bags. While we agree that the Department has broad
authority under 49 U.S.C. 41712 to define unfair or deceptive
practices, 49 U.S.C. 41704 note imposes a specific requirement on the
Department with regard to airlines' refund of delayed baggage fees.
Specifically, the Department is directed to require U.S. and foreign
carriers to provide a refund for any fees paid by a passenger for
checked baggage if the carriers fail to deliver the bag to passengers
within 12 to 18 hours of their arrival from domestic flights and within
15 to 30 hours of their arrival from international flights. Although
adopting a ``zero hour'' standard as suggested by a consumer
organization would result in consumers receiving a refund of baggage
fees in all instances where the bags did not arrive with the consumers,
the Department is of the view that imposing a strict liability on
airlines would not result in the maximum consumer benefit because this
approach reduces the incentive for carriers to recover and return the
delayed bags to consumers as soon as possible. As such, we are not
setting a ``zero hour'' standard for delayed bags that would
necessitate a refund of the bag fee.
The Department has carefully considered the comments received and
is adopting the proposed 12-hour standard for domestic itineraries.
Airline commenters did not provide convincing evidence demonstrating
that the 12-hour standard for domestic itineraries is not feasible and
would ``adversely affect consumers in certain cases,'' as set forth by
the statute. Further, although the Department acknowledges the
differences between the legacy carriers and ULCCs in terms of flight
frequencies and the scope of networks, we continue to believe that
these differences do not warrant adopting a standard for ULCCs
different from that of the other carriers. Specifically, the Department
notes that all carriers have the option to transport the delayed bags
through overnight couriers and still meet the delay deadline, instead
of waiting for the next available flight. Also, although compared to
the legacy carriers, it is likely that ULCCs may have to use courier
services more frequently to recover the delayed bags, this
[[Page 32792]]
disadvantage for the ULCCs is countered by the reduced likelihood of
ULCCs having delayed bags compared to legacy carriers because of their
point-to-point operations. Legacy carriers' hub-and-spoke networks
means that many of the bags they transport will be traveling through
connecting itineraries that statistically have a higher possibility of
being delayed, in comparison to the ULCCs' point-to-point operations.
According to a Soci[eacute]t[eacute] Internationale de
T[eacute]l[eacute]communications A[eacute]ronautiques (SITA) Baggage IT
Insights report,\62\ transfer mishandling historically remains by far
the leading cause of bag delays, which accounted for 42% of total bag
delays in 2022.\63\
---------------------------------------------------------------------------
\62\ https://www.sita.aero/resources/surveys-reports/baggage-it-insights-2023/.
\63\ As noted in the NPRM, the SITA Baggage IT Insights report
for 2019 states that transfer mishandling account for 46% of total
bag delays in 2018. https://www.sita.aero/resources/surveys-reports/baggage-it-insights-2019/.
---------------------------------------------------------------------------
With respect to international itineraries, the Department has
decided that a ``one-size-fit-all'' standard may not be in the best
interest of consumers. We agree with comments suggesting that the
proposed 25-hour standard to return a bag before the carrier has to
refund the bag fee may be too long when consumers are traveling on
international routes with shorter durations and/or more frequencies. At
the same time, we agree with comments asserting that, in many cases, it
may not be feasible for carriers to return bags within the proposed 25-
hour standard for consumers traveling on ultra long-haul flights
operated under low frequencies. This is not only because the carrier's
next available flight could be 24 hours or more later, but also because
there could be very limited choices to transport the bags on rerouted
itineraries, on another carrier's flight, or through courier services.
The flight segment duration data on major U.S. carriers collected by
the Bureau of Transportation Statistics (BTS) shows that in 2022, the
majority of non-stop flight segments operated by U.S. carriers to and
from the U.S. have a flight duration of 12 hours or less, including all
flights between the United States and Canada, Central/South America,
and Europe, 65% of flights between the United States and Africa, 46% of
the flights between the United States and Far East, 73% of flights
between the United States and Middle East, and 14% of the flights
between United States and Australia/Oceania.\64\ The Department assumes
the duration of flights operated by foreign carriers is similar, but
BTS does not collect this data from foreign air carriers. For these
reasons, the Department is adopting two standards for international
itineraries. For international itineraries with a non-stop flight
segment to or from the United States that is 12 hours or less, we are
adopting the minimum statutory standard of 15 hours. For international
itineraries with a non-stop flight segment to or from the United States
that is more than 12 hours, we are allowing carriers to recover the
delayed bags within 30 hours to avoid refunding the bag fees.
---------------------------------------------------------------------------
\64\ Data is derived from the T-100 Segment report as filed
monthly by major U.S. carriers with BTS. Flight duration is
calculated by dividing minutes airborne with performed departures.
---------------------------------------------------------------------------
The Department notes that to qualify for the 30-hour standard, the
itinerary must include an international segment (i.e. a flight segment
between the United States and a foreign point) that is more than 12
hours in duration. If the itinerary includes a segment between two
foreign points that is more than 12 hours and the segment between the
United States and a foreign point is 12-hour or less in duration, the
15-hour delay standard would apply.
The Department disagrees with some commenters' suggestion that the
rule should explicitly require that the delayed bags be transported on
the next available flight. We intend to provide carriers the maximum
flexibility to recover the delayed bags to the benefit of passengers,
including transporting the bags on partner airlines' flights, on cargo
flights, or through commercial couriers. In addition, the Department
agrees with ASTA's comment that it is inappropriate to assume that
retaining the baggage fees is carriers' sole or primary goal and that
once the deadline has passed for delivering delayed bags, carriers will
not have the incentive to recover the bag as quickly as possible. As
ASTA pointed out in its comment, delivering a delayed bag as soon as
possible is a way to gain custom satisfaction and goodwill, regardless
of whether carriers must refund the bag fee. Further, carriers are
under the obligation to compensate consumers for incidental expenses
related to delayed bags, subject to maximum liability limits under 14
CFR 257 for domestic travel and under international treaties for
international travel. The longer the bag is delayed, the more potential
liability for incidental expenses carriers will face. The Department
believes that all these factors provide incentives to carriers to
recover the bags regardless of whether the refund deadline has passed.
Regarding international itineraries that include a domestic
segment, we are adopting the proposal to apply the international
deadline to such itineraries. The Department holds the view expressed
in the NPRM that mishandled bag incidents occur more frequently on the
international segments. This is also confirmed by the aforementioned
SITA Baggage IT Insight report, which states that globally, mishandling
rates on international routes is 19.3 per thousand passengers, compared
to 2.4 for domestic routes.\65\ The Department also received no
objection to this proposal and believes that applying the international
deadlines to such itineraries avoids consumer confusion and
appropriately takes into account that many delayed bags traveling on an
international itinerary were likely delayed on the international
portion of the trip.
---------------------------------------------------------------------------
\65\ The Report also noted that in 2022, there was a
considerable surge in the international mishandling rate, which was
at 8.7 during the previous year.
---------------------------------------------------------------------------
Also, the Department notes that it is making an editorial change to
the rule text in 14 CFR 259.5(b)(3). The existing rule requires
carriers to make every reasonable effort to return mishandled baggage
within twenty-four hours. The Department is removing the reference to
``twenty-four hours'' and, instead, requiring carriers to make every
reasonable effort to return mishandled baggage within the timeframes
set forth in this final rule for purpose of avoiding refunding baggage
fees.
3. Measuring the Length of Delay in Delivering a Checked Bag
The NPRM: To calculate the length of the delay for a carrier to
deliver a checked bag, it is necessary to specify the start and end of
the delay. The provision at 49 U.S.C. 41704 note states that the
baggage delay clock starts at ``the arrival'' of a flight and ends when
the carrier ``[delivers] the checked baggage to the passenger.''
However, that provision does not specify what it meant by the arrival
of a flight or delivery of the checked baggage.
The Department proposed the start of the delay to be when the
passenger arrives at his or her destination and is given the
opportunity to deplane from the last flight segment. The Department
reasoned that airlines already track this information for the purpose
of ensuring compliance with the Department's tarmac delay rule in 14
CFR part 259. Another measure considered in the NPRM for the start of
the delay is the published scheduled arrival time of a flight or the
``block-in time,'' i.e., the time when a flight has parked at the
arrival gate or another disembarkation location and blocks were placed
in front of its wheels.
As to when a bag is considered to be delivered to the passenger for
the
[[Page 32793]]
purpose of ending the delay in receiving a checked bag, the Department
proposed that, at the carrier's discretion, the end of the delay is:
(1) when the bag is transported to a location agreed to by the
passenger and the carrier, regardless of whether the passenger is
present to take possession of the bag; (2) when the bag has arrived at
the destination airport, is available for pickup, and the carrier has
provided notice to the passenger of the location and availability of
the bag for pick-up; or (3) if the carrier offers delivery service and
the passenger accepts such service, when the bag has arrived at the
destination airport, and the carrier has provided notice to the
passenger that the bag has arrived and will be delivered to the
passenger. The Department shared in the NPRM that the three options to
determine the end of the delay are intended to allow airlines, with
less financial risk, to work with the passengers to transport the bags
to the most convenient location in the most efficient manner to the
passenger. The NPRM sought comment on whether this analysis accurately
captures carriers' incentives to work with passengers and provide
baggage delivery or if there are other factors that could cause
carriers to engage in different behaviors in response to the proposed
options. In addition, the NPRM sought comment on whether allowing
carriers to choose among these three options is reasonable and
effective to achieve the goal of providing carriers and passengers the
maximum level of flexibility, promoting efficiency in delayed baggage
recovery, and ensuring passengers are treated fairly when their bags
are delayed in air transportation.
The Department also solicited specific comment on the second
option, which stops the delay clock when the bag has arrived at the
destination airport, is available for pickup, and the carrier has
provided notice to the passenger of the location and availability of
the bag for pick-up. The NPRM noted that carriers have the burden of
proving that notices have been provided to passengers prior to the
applicable deadline, invited comment on sufficient forms of
notifications, and asked what evidence should a carrier be required to
provide if notification is through a voice call or message and there is
a dispute between a carrier and a passenger about whether such a
notification was provided.
Comments Received: Regarding the start of baggage delivery delay,
all airline commenters who commented on this issue suggested that the
delay clock should start at the time a passenger files a Mishandled
Baggage Report (MBR). They argue that airlines do not always know that
a bag is delayed until a passenger notifies the carrier by filing an
MBR. They further commented that this notification would allow carriers
to collect necessary information for searching and delivering the bag,
such as the passenger's contact information, the bag's tag number, and
the bag's description. Qatar Airway asked if the Department would
consider passengers using carriers' online reporting system to have
started the clock.
An individual consumer objected to the airlines' approach and
argued that airlines determine how and when an MBR may be filed and
there is obvious conflict of interest on airlines' part. This commenter
suggested that a passenger arriving at 10 p.m. may not file an MBR
until 9 a.m. the next day. This commenter further indicated that
airlines' rejections of MBRs would increase DOT complaint volume.
Regarding the end of the delay, airline commenters supported the
Department's proposal to allow airlines to choose one of the three
options, arguing that this approach would allow carriers the
flexibility to recover bags and work with passengers for tailored
solutions. A4A commented that for option 2 (bag has arrived at the
destination airport, is available for pickup, and the carrier has
provided notice to the passenger of the location and availability of
the bag for pick-up), it is unreasonable to require carriers' baggage
office to open 24/7 so the clock should stop at the time of
notification even if the carrier's baggage office is closed. A4A, IATA,
Spirit, and Virgin Atlantic further indicated that the Department
should adopt a performance-based standard for notifications, taking
into account any future innovations, and the notification requirement
should focus on timeliness and not the form. A4A and IATA also stated
that the Department should not prescribe how carriers keep records of
the notifications as carriers use different systems to record
communications with passengers. A4A further commented that recording
the time of a voice call should be sufficient as evidence that a
notification by phone call has been provided.
Travelers United and Business Travel Coalition et al. opposed the
proposal. Business Travel Coalition et al. argue that allowing the
three options would result in airlines selecting the option that is
most likely to relieve them from the obligation of refund baggage fee
(i.e., option 2) and doing no more than the minimum necessary to avoid
having to refund. One individual consumer expressed support for the
proposal of three options and commented that the flexibility allows
carriers to provide the service in reasonable time and cost
effectively. Another consumer commented that the regulation should not
indicate that carriers may use app push notices to provide notification
because many passengers do not want to or have mobile apps for various
reasons, including the lack of memory to download the app, the lack of
cellular data, unwillingness to share location, or concerns about
viruses. The commenter suggested that consumers should have the right
to receive notifications through privacy-friendly means such as email
or text message.
ASTA commented that the clock should stop when the bag is
physically in the passenger's possession because passengers
continuously experience inconveniences until reunited with the bags.
ASTA further stated, however, that it recognizes that it is inequitable
to keep the clock running when a passenger delays the reclaim of a bag,
and as such, it suggests that the clock should stop when the bag is
delivered to a location designated by the passenger and the passenger
is notified.
DOT Responses: After carefully considering the comments provided,
the Department is requiring that the length of the delay for a carrier
to deliver a checked bag be calculated based on when the passenger
arrives at his or her destination and is given the opportunity to
deplane from the last flight segment (start of the delay) and when the
carrier delivers the bag to a mutually agreed upon location such as a
hotel or the passenger's home or when the passenger (or someone
authorized to act on behalf of the passenger) picks up the bag at the
airport (end of the delay). In determining the start of the delay, the
Department focused on the fact that the delay started when the bag did
not arrive with the passenger. In determining the end of the delay, the
Department focused on when the carrier relinquishes its custody of the
bag to the passenger, which is consistent with the Department's
position on U.S. airlines reporting of mishandled baggage.\66\
---------------------------------------------------------------------------
\66\ The Technical Directive issued by the Department's Bureau
of Transportation Statistics requires that reporting carriers must
report the number of mishandled bags, as reported by or on behalf of
passengers, that were mishandled while in its custody. https://www.bts.gov/topics/airlines-and-airports/number-30a-technical-directive-mishandled-baggage-amended-effective-jan.
---------------------------------------------------------------------------
Based on carriers' comments that in many circumstances carriers may
not know when a bag is delayed until the passenger files an MBR, and
consistent with the requirement of section 41704 note that passengers
must notify carriers of the baggage delay, the Department is specifying
that filing an MBR is
[[Page 32794]]
necessary to obtain a refund of the fee for a significantly delayed
checked bag. Typically, airlines obtain, through the filing of an MBR,
information such as the passenger's contact information, the bag's tag
number, and the bag's description which helps them search for and
deliver a bag. The provision in this final rule that a refund of the
bag fee for a significantly delayed checked bag is not due until the
passenger files an MBR with the last operating carrier is consistent
with the statute in 49 U.S.C. 41704 note that provides a refund shall
be provided if a carrier fails to meet the baggage delivery deadline
``and . . . the passenger has notified the [carrier] of the lost or
delayed checked baggage.'' The Department considers that a consumer
filing an MBR to be notification to the carrier of the lost or delayed
checked bag.
Regarding the end of the delay for a carrier to deliver a checked
bag, the Department had proposed in the NPRM to allow carriers to
consider as end of the delay, among other things, instances where the
carrier offers delivery service of the bag and the passenger accepts
such service and the carrier has provided notice to the passenger that
the bag has arrived and will be delivered to the passenger. The
Department has determined that this is not an appropriate end of the
delay because the bag remains under the carrier's custody and the
passenger is not reunited with the bag when the carrier provides notice
to the passenger that the bag has arrived and ``will be'' delivered. 49
U.S.C. 41704 note states that the baggage delay clock ends when the
carrier ``[delivers] the checked baggage to the passenger.'' Notifying
passengers that the bag will be delivered is not a form of
``delivery.'' \67\
---------------------------------------------------------------------------
\67\ The Merriam-Webster Dictionary defines ``deliver'' to mean
``to take and hand over to or leave for another.''
---------------------------------------------------------------------------
Similarly, the Department has determined that its proposal that the
end of the delay includes instances when the bag arrives at the
destination airport, is available for pickup, and the carrier has
provided notice to the passenger is inconsistent with 49 U.S.C. 41704
note. Again, notifying the passenger that the bag is available for
pickup is not a form of delivery. Further, the Department agrees with
consumer representatives that this option provides the easiest option
for airlines to stop the clock and may incentivize carriers to do the
bare minimum to assist passengers in reuniting with their bags. The
Department is also of the view that requiring passengers to return to
the airport to pick up their delayed bags, after they have already
experienced the inconvenience of leaving the airport without their
checked bags upon arrival, adds a potentially significant burden to
passengers in terms of their time, effort, and cost. As such, the
Department is revising this option in the final rule so the delay clock
stops at the time the passenger or someone authorized to act on behalf
of the passenger are timely notified of the arrival of the bag and
actually picks up the bag at the airport instead of when the carrier
has provided notice to the passenger of the location and availability
of the bag for pick-up.
The Department is adopting its proposal that the end of the delay
include instances when the bag is transported to a location (e.g.,
passenger's home, hotel) agreed to by the passenger and the carrier,
regardless of whether the passenger is present to take possession of
the bag. The Department agrees with comments that the clock should stop
when the carrier delivers the bag to a location designated by the
passenger and the passenger is notified. At this point, the bag is
effectively no longer under the custody of the airline because the
passenger agreed to delivery of the bag to the specified location. In
this final rule, airlines have the option to choose as the end of the
delay either (1) when the carrier delivers the bag to a mutually agreed
upon location; or (2) when the passenger picks up the bag at the
airport. The Department believes that these two options provide
flexibility for airlines to work with passengers in finding the best
solution to reunite them with their bags. If airlines determine that
passengers could or are purposefully delaying arriving picking up their
bags to receive a refund, carriers are free to choose option (1).
4. Entities Responsive for Refunds in Multiple Carrier Itineraries
The NPRM: The Department proposed that, in a multiple carrier
itinerary where a carrier collected the bag fee, the carrier that
collected the baggage fee be the entity responsible for refunding the
fee to a passenger should the checked bag be significantly delayed. The
Department tentatively rejected an ``at fault'' approach that assigns
the refund obligation to the carrier that causes the baggage delay,
reasoning that expecting consumers to track down which airline caused
the bag to be delayed would be an unreasonable burden on consumers. The
Department also noted that it would be costly for carriers to determine
which carrier is at fault for causing each bag delay.
With respect to multiple-carrier itineraries for which a ticket
agent collected the bag fee, the NPRM proposed to hold the carrier that
operated the last flight segment, rather than the ticket agent,
responsible for issuing the refund when a checked bag is significantly
delayed. There was discussion in the NPRM of ticket agents being
authorized by carriers to collect bag fees on the carriers' behalf.
Also, while the Department acknowledged that the carrier that operates
the last flight segment may be a fee-for-service carrier that normally
does not handle baggage fee refunds since these carriers generally do
not sell tickets or ancillary services, the Department added that
carriers can prorate the cost of refunds among themselves. The
Department solicited comment on whether, rather than requiring the
carrier that operated the last flight segment to provide the refund,
the Department should require the carrier that marketed the last flight
segment to issue the refund when a ticket agent collects the bag fee.
Comments Received: Most airline commenters supported requiring the
carrier that collected the baggage fees to provide refunds for delayed
bags in multiple carrier itineraries. Emirates agreed that the
collecting carrier should refund but notes that the collecting carrier
may not be the marketing/ticketing carrier. Virgin Atlantic commented
that the marketing carrier has the payment information but may not have
the information on the status of the bag, and the last operating
carrier has the status of the bag but may not have the payment
information. It suggested that carriers need to investigate together,
and that additional time is needed. RAA commented that fee-for-service
carriers that operate the last segments do not conduct transactions
with passengers and are unable to process refunds. NACA stated that
ULCCs that operate non-scheduled services often operate on behalf of
other ULCCs for scheduled services. It contended that these non-
scheduled operating carriers do not collect baggage fees or take
control of bags when passengers check in, and they should not be
responsible for refunds. A4A suggested that the ticket agents
collecting baggage fees for multiple carrier itineraries should refund
and the passenger should be required to notify the last operating
carrier about the bag delay. ASTA supported not requiring the carrier
at fault of mishandling baggage to refund when multiple carriers are
involved. It argued that this approach would result in passengers being
sent back and forth among
[[Page 32795]]
carriers. ASTA also supported requiring the carrier collecting the fee
be responsible for refunds.
DOT Responses: The Department is requiring that, in a multiple
carrier itinerary, the carrier that collected the baggage fee is the
entity responsible for refunding the fee to a passenger should the
checked bag be significantly delayed. Based on the comments received,
it appears that the carrier that markets the itinerary may not always
be the carrier that collects the baggage fee. Regardless of which
carrier is marketing the flight or which carrier is at fault for the
mishandling, the Department concludes that the most simplified and
straightforward approach, from the passengers' perspective, is to hold
the carrier that collected the baggage fee responsible for the refund
because the collecting carrier already has the passenger's payment
information for the baggage fee. The Department considers the carrier
whose name is shown in the consumer's financial statements for the
baggage fee transaction such as the debit or credit card charge
statements (commonly known as the merchant of record) to be the carrier
that collected the bag fee. As pointed out by commenters, the
Department recognizes that the carrier that collected payment may not
have information on the status of the bag. The Department agrees with
Virgin Atlantic's suggestion that those carriers need to work together.
In situations where the carrier that collected the bag fee and the
carrier operating the last flight segment are different entities, the
Department is requiring that the last operating carrier, which is the
carrier that accepts MBRs, to determine whether a bag was significantly
delayed and if so, provide the baggage delay information to the
collecting carrier without delay. The Department's Office of Aviation
Consumer Protection will determine the timeliness of the information
provided by the last operating carrier to the collecting carrier based
on the totality of the circumstances, including the operating carrier's
process and procedures for determining whether the checked bag is
significantly delayed and whether the last operating carrier informed
the collecting carrier of the refund eligibility soon after it
determined the bag was significantly delayed. The collecting carrier
remains responsible for providing the refund. Under this final rule,
the 7/20-day refund timelines start at the time the collecting carrier
receives information from the last operating carrier that the
passenger's bag has been significantly delayed and the passenger has
filed an MBR.
This final rule makes it an unfair practice for the last operating
carrier to fail to timely determine if a bag has been significantly
delayed and communicate that information to the collecting carrier.
Airlines not providing such information in a timely manner pause the
refund process and cause substantial harm to consumers by extending the
timeline for consumers to receive the money to which they are entitled.
This harm is not reasonably avoidable by consumers as they have no
control over the airlines' actions. The Department also sees no
benefits to consumers and competition from this conduct. Without this
requirement, the money that is due to consumers could take however long
an airline chooses, which in turn harms consumers and competition by
penalizing good customer service and rewarding dilatory behavior.
Regarding multiple-carrier itineraries for which a ticket agent
collected the bag fee (i.e., the ticket agent's name is in the
consumer's financial statement), the Department is adopting the NPRM
proposal to require the operating carrier for the last flight segment
to refund the baggage fee to the passenger when a checked bag is
significantly delayed. In these situations, neither the marketing nor
the operating carrier may have the payment information because the
ticket agent collected the fees, but the operating carrier for the last
flight segment will have information about the status of the bag. By
taking this approach in the final rule, the Department is recognizing
that when no carrier has collected the baggage fee, requiring the last
operating carrier to refund makes sense because the operating carrier
is the one that accepts and handles the MBRs and has information about
the status of the bag. In these situations, the operating carrier may
decide to request that the consumer completing the MBR form identify
the ticket agent that collected the bag fee and the consumer's payment
information in case a refund of the baggage fee should be necessary.
Also, based on comments from both ASTA and Travel Tech, it is the
Department's understanding that these types of situations will be
infrequent because ticket agents' involvement in collecting baggage
fees is minimal.
With regard to RAA's comment that fee-for-service carriers do not
transact with consumers and are unable to issue refunds, the
Department's understanding of the industry practice is that the
marketing carriers that contract and codeshare with fee-for-service
carriers are usually the entities that handle most aspects of customer
services for these flights, including accepting MBRs and compensating
passengers for expenses that they may incur while their bags are
delayed. Under this final rule, although a fee-for-service carrier
operating the last flight segment is ultimately responsible for issuing
refunds of baggage fees for ticket agent-transacted multi-carrier
itineraries, it is permissible for the carrier to rely on other
entities, such as their marketing codeshare partner, to process MBRs
and issue refunds to consumers on its behalf.
5. Refund Mechanism and Passengers' Responsibility To Notify Carriers
About Bag Delay
The NPRM: The Department proposed to require that airlines provide
refunds for delayed bags within seven business days of a refund being
due for credit cards and within 20 days of a refund being due for
payments using cash, check, vouchers, frequent flyer miles, or other
form of payment. Under the NPRM, for the refund process to start,
passengers would need to notify the airline that collected the bag fee
about the delay in receiving the bag. The Department proposed that, in
situations in which the carrier accepting and handling an MBR from the
passenger is the same carrier that collected the baggage fee, the
filing of an MBR would constitute notification from the passenger to
the carrier that the baggage was delayed for the purpose of receiving a
checked baggage fee refund.
As proposed, if the carrier that received an MBR about a delayed
bag and the carrier that charged the baggage fee are different
entities, the Department proposed to require the passenger inform the
carrier that collected the baggage fee of the lost or delayed bag. This
would mean that the passenger would need to file an MBR with one
carrier and then contact another carrier to state that his/her bag was
lost or delayed. In situations in which a ticket agent collected the
bag fee, the Department proposed that passengers would need to notify
the carrier that operated the last flight segment about the delay in
receiving the bag. The NPRM solicited comments on whether, instead of
requiring passengers to notify the carrier that operated the last
flight segment about the bag delays, the Department should require
passengers to notify the carrier that marketed the last flight segment.
The NPRM proposed that baggage fee refunds would be issued in the
same form of payment as the original baggage fee payment. Under this
proposal, in addition to credit card, cash, and check
[[Page 32796]]
payments being refunded in their respective original forms of payment,
baggage fees paid by airline credit/voucher or frequent flyer miles
would be refunded in their original forms of payment as well.
Comments Received: Airlines were generally in support of requiring
passengers to notify the last operating carrier and, if the last
operating carrier is not the entity that collected the bag fee, also
notify the entity (carrier or ticket agent) that collected the bag fee.
They reasoned that notifying the last operating carrier is necessary to
establish MBRs and provide the passenger's contact information, and
that notifying the collecting entity is needed to more effectively
determine liability among various entities. Contrary to this general
position, COPA commented that notifying the last operating carrier
alone is sufficient and the last operating carrier should be
responsible for the refunds. Several airline commenters suggested that
the Department should allow additional time (e.g., 30 days) to issue
refunds, especially when multiple parties are involved. A4A stated that
the Department should allow carriers the maximum flexibility to provide
refunds, with passengers' consent, in alternative electronic forms.
Although consumers and their advocacy groups did not specifically
comment on this subject, ASTA disagreed with the Department's proposal
that passengers should separately notify the collecting carrier if the
last operating carrier is not the collecting carrier. ASTA commented
that filing an MBR with the last operating carrier should be sufficient
and requiring passengers to provide two notifications is unduly
burdensome and may confuse passengers.
ASTA agreed with the proposed timelines to require the collecting
carrier to issue refunds.
DOT Responses: After carefully considering the comments received,
the Department has decided that in all situations, including when the
carrier that received an MBR about a delayed bag and the carrier or
ticket agent that collected the baggage fee are different entities, the
filing of an MBR constitutes adequate notification from the passenger
that the baggage was delayed for the purpose of receiving a checked
baggage fee refund. The Department agrees with ASTA that requiring
passengers to provide separate notifications to two entities to obtain
a baggage fee refund is unduly burdensome and may confuse passengers.
Further, 49 U.S.C. 41704 note requires carriers to provide ``prompt''
and ``automated'' baggage fee refund when the baggage delivery delay
has exceeded the specified delivery deadline. In this final rule, the
Department is defining an ``automated'' refund of the bag fee to mean a
refund provided to a consumer for a checked bag that has been
significantly delayed (i.e., delayed 12 hours or more for domestic
flights, delayed 15 hours or more for international flight that is 12
hours or less in duration, delayed 30 hours or more for an
international flight that is more than 12 hours in duration) without
action by the passenger beyond the filing of an MBR.
In situations where the carrier accepting and handling an MBR from
the passenger is the same carrier that collected the baggage fee, it
should be simple for the carrier to provide passengers automated
refunds if the checked bag is significantly delayed because that
carrier has the passenger's payment information and knows whether the
checked bag has been significantly delayed. In situations where a
carrier collected the baggage fee and a different carrier accepted the
MBR, both carriers are expected to work together to ensure that a
refund is issued promptly when due, with the carrier accepting the MBR
timely notifying the collecting carrier of the baggage delay status and
any other information collected from the passenger necessary for
processing the refund, and the collecting carrier promptly issuing the
automatic refund when it is notified that the delay has exceeded the
deadline. As stated earlier, both carriers will be held responsible
when a refund is not issued promptly. In situations where a ticket
agent collected the bag fee, under this final rule, the carrier that
operated the last flight segment is both the carrier accepting and
handling an MBR and the carrier required to provide an automated
refund. As the carrier accepting and handling the MBR, the carrier
knows whether the consumer's checked bag has been significantly delayed
entitling the consumer to a refund of the bag fee. While that carrier
may not know the identity of the ticket agent that collected the bag
fee or have the consumer's payment information should a refund be
necessary, the carrier can obtain such information from the consumer as
part of the MBR form that the consumer completes. The carrier may also
choose to use the information that the consumer provided about the
ticket agent that collected the bag fee to seek reimbursement.
In all the situations described above, the Department is requiring
that the refund of the bag fee for a significantly delayed checked bag
be prompt. The Department is defining a ``prompt'' refund of bag fees
to mean a refund issued within 7 business days of the expiration of the
baggage delivery deadline for tickets purchased with credit cards or 20
calendar days of the expiration of the baggage delivery deadline for
tickets purchased with other payments, unless the consumer did not file
an MBR before the expiration of the baggage delivery deadline, in which
case the refund is due within 7 or 20 days of the date when the MBR was
filed. The Department notes that its requirement for carriers to refund
baggage fees within 7 business days for credit card purchases and 20
calendar days for purchases with other payments is consistent with the
Department's existing refund regulation in 14 CFR 259.5 and 14 CFR part
374. The requirement in part 374, which implements Regulation Z's 7-day
refund timeline for credit card payments applies to all airline
transactions for which refunds are due, not just ticket refunds. The
Department disagrees with airline commenters that investigations of
refund eligibility involving multiple carriers warrant additional time
beyond the 7- or 20-day timeframes. As stated in the NPRM, our
understanding is that the vast majority of travel itineraries marketed
to consumers in the United States are either itineraries involving only
one carrier or itineraries involving fee-for-service codeshare
operations for which the operating fee-for-service carrier works
closely with the marketing carrier on baggage handling and resolving
MBRs. For delayed baggage claims in those itineraries, investigations
should be a straightforward process. In other cases, the Department
expects that carriers engaging in marketing codeshare or interline
arrangements will continue to improve inter-airline communication
channels to increase the efficiency of information exchange relating to
customer service, including delivering delayed bags to passengers as
soon as possible and providing refunds for baggage fees when
appropriate.
6. Other Issues
The NPRM: The NPRM raised a number of miscellaneous issues relating
to refunding fees for significantly delayed bags and asked for public
comments. These issues concern: (1) what types of bags are subject to
the refund requirement, including whether fees for oversized/overweight
bags should be exempt from refund requirement; (2) how to determine the
amount of refund if a fee was charged for multiple bags under an
escalated fee scale and one or some of multiple
[[Page 32797]]
checked bags are delayed, or if a passenger paid a fixed fee for a
baggage fee subscription program that covers the passenger's checked
bag fees for a specified period; (3) whether there are particular
circumstances in which airlines should not be required to issue a
refund for a significantly delayed bag; (4) whether a carrier can
require waiver of fees and liability if a passenger voluntarily agrees
to travel without the checked bag on the same flight; and (5) how the
baggage fee refund requirement should apply when airlines arrange
alternative transportation or when passengers choose not to travel on
the scheduled or substituted flight.
With regard to the types of checked bags subject to the refund
requirement, the Department noted that the statute requires the rule to
cover ``checked baggage'' and the Department interpreted this to
include not only bags checked with carriers at the ticket counters but
also gate-checked bags and valet bags. The Department added that the
statute makes no distinction or exception for special items that are
transported as checked bags and interpreted the statute to also cover
oversized and overweight bags.
As for the amount of baggage fee refund to be provided if a
passenger paid a lump sum fee for multiple bags under an escalated fee
scale and one or some of multiple checked bags are delayed, the
Department indicated its intention to require a carrier to refund the
highest baggage fee per bag if there is not a unique identifier for
each checked bag that correlates to the fee. The Department stated that
it would permit the specific fee paid for the significantly delayed bag
to be refunded if a carrier can identify the specific fee paid for that
delayed bag. For passengers who paid for a baggage fee subscription
program, the Department stated that it would require airlines to
provide refunds and solicited comment on how to determine the amount of
refund to which these passengers should be entitled. The Department
reasoned that a refund is appropriate because the subscribers are
paying a fee to transport their bags even if it is not on a per bag
basis.
Another issue that the Department examined in the NPRM is whether
the mandate for baggage fee refunds should exempt certain situations.
The Department provided examples of two instances in which a delay of a
bag may be a result of passenger inaction. The first example was of a
passenger who fails to comply with the requirement of U.S. Customs and
Border Protection to pick up a checked bag at the first point of entry
into the United States and recheck the bag, causing baggage delay. The
second example was of a passenger who is traveling with two separate
tickets and the passenger fails to collect the checked bag at the end
of the first itinerary and check it with the carrier on the second
itinerary. The Department also asked whether, instead of specifying
particular circumstances in which airlines are not required to issue a
refund for a lengthy delay in delivering the bag, a general exception
for checked baggage delays that were a result of a passenger's
negligence is preferable. The Department sought comment on what level
of proof, if any, carriers should be required to provide to show that a
bag delay was caused by the passenger's negligent action or inaction.
In addition, the Department analyzed and solicited comment on
whether a carrier should be allowed to require a waiver of fee refunds
for significantly delayed checked bags and a waiver of incidental
expenses associated with the delay from a passenger who voluntarily
agrees to be separated from his or her checked bags, usually due to
late check-in or traveling as a standby passenger. The Department also
asked whether it should require airlines to retain records of waivers
for a specified time period if it were to allow such waivers. A related
issue addressed in the NPRM was whether a baggage fee refund
requirement should apply when passengers choose not to travel on the
scheduled or substituted flight. In the NPRM, the Department noted that
it has tentatively determined that when passengers voluntarily choose
not to travel on the scheduled flight or a substitute flight offered by
the carrier, either by taking ground transportation that the passengers
arrange on their own, or by purchasing tickets on flights of another
carrier, the baggage fee refund requirement should not apply. The
Department stated, however, if it is the carrier that arranges the
alternative transportation, the bag fee refund requirement would apply,
and the baggage delay clock would start when the passenger arrives at
his or her destination in the alternative transportation provided.
Lastly, the Department stated that baggage fees included in
airfares, or baggage services provided as a complementary service due
to frequent flyer status or credit card benefits should not be included
in the refund requirement.
Comments Received: A4A and AAPA stated that the refund requirement
should not cover oversized/overweight bags and other specialty checked
bags such as pets. A4A asserted that transporting these bags involves
additional special care and costs, higher injury risks to employees,
and increased chance of delay due to weight and balance limits. Both
commenters argued that requiring carriers to refund fees for these bags
would disincentivize carriers from accepting them for transportation or
cause carriers to increase the price for transporting these bags. IATA
commented that it supports the proposal that airlines should assign a
specific fee to each bag if using an escalated fee scale and the
proposal that when no such assignment was made airlines should refund
the highest fee per bag.
A4A commented that passenger negligence or failure to meet the
conditions set forth by the carrier's contract of carriage that causes
bags to be delayed should exempt carriers from the refund obligation.
It specifically listed situations that it believes should qualify for
exemptions, including when: passengers fail to pick up and recheck bags
at the international entry points, passengers travel to ``hidden
cities'' (i.e., passengers book a through fare with intention to
disembark mid-travel but the bags are checked all the way through to
the final destination), passengers purchase two separate tickets and
then fail to collect the bag and recheck with the second carrier,
passengers do not meet the check-in and other contract of carriage
requirements, or passengers pack prohibited items in bags. A4A also
stated that the exemption should apply when passengers take an earlier
flight as standby or arrange their own alternative transportation, in
which case carriers should be allowed to request passengers sign a
waiver. A4A further contended that third-party actions that cause the
bag delay should also exempt carriers from refund liability and these
situations include bags being mistakenly claimed by another passenger,
bag delays due to government actions such as bags being held by customs
or airport security, bag delays due to airport-operated system failure,
negligence by third-party delivery services that is beyond carriers'
control, or bag delays due to carriers' compliance with positive bag
match requirements.
IATA, AAPA, Qatar Airways, and Spirit supported the proposal that
carriers may request a waiver from passengers when passengers arrange
their own alternative transportation or when passengers choose to
voluntarily separate from their bags. IATA further supported the
proposal that the refund requirement would apply when carriers arrange
the alternative transportation but suggests that the clock should start
at the time of MBR filing, as opposed to the arrival of the alternative
transportation as proposed in the
[[Page 32798]]
NPRM. Spirit and Qatar Airways supported the proposal that carriers are
not responsible for refunds when consumers arrange for alternative
ground transportation or travel on anther carrier's flight.
On baggage subscription programs, A4A, IATA, and AAPA argued that
baggage transportation services that are purchased as part of a baggage
fee subscription service should not be subject to the refund
requirement proposed in the NPRM. A4A argued that carriers should be
exempted from the refund requirement because carriers cannot accurately
calculate the cost of the bag transportation and the amount of refund
due. It further argued that passengers purchasing the subscription
program are receiving a bargain on baggage transportation and they
understand the risk of not receiving a refund when a bag is delayed.
A4A commented that not providing an exemption to the program will
stifle innovation on dynamic pricing and comparison marketplaces.
A4A, IATA, and AAPA argued that baggage transportation services
included as part of the fare or provided free of charge due to the
passenger's frequent flyer status or because the passenger holds a
branded credit card from the airline should not be subject to the
refund requirement. Spirit, on the other hand, stated that carriers
that do not separately charge a bag fee should be required to provide
partial ticket refunds when bags are delayed because these carriers
have incorporated the baggage fee into ticket prices.
Travelers United supported the proposal to treat oversized/
overweight bags the same as regular checked bags for the purpose of
baggage fee refunds. It also supported the rule covering gate-checked
and valet bags to the extent that baggage fees are charged. Travelers
United commented that if fees for all bags are paid in the same
transaction, when one of the bags are delayed, carriers should refund
the highest per bag fee. On carrier-arranged alternative
transportation, Traveler United expressed its belief that passengers
should be protected by the same rule regarding baggage fee refunds. It
further emphasizes that when passengers waive their rights to baggage
fee refunds, they are not waiving their rights to compensation related
to lost or damaged baggage. One individual consumer expressed
disagreement with airlines' suggestion that the rule should exempt
oversized or overweight bags. The consumer commented that the
suggestion introduces incentives for airlines to give these bags the
lowest priority.
The Colorado AG suggested that instead of adopting a general
category of ``passenger negligence'' that exempts carriers from the
refund obligation, the Department should specify the particular
circumstances in which carriers are exempted. The comment further
contended that a vague concept of ``passenger negligence'' would likely
post challenges to consumers, carriers, and the enforcement process,
and it would also invite carriers to deny refunds more readily and
place consumers in a challenging position. The comment recommended that
the structure of the rule place the burden on the airline to establish
any exception.
DOT Responses: After careful consideration of the comments, the
Department is: (1) defining checked bags subject to the refund
requirement to include gate-checked bags, valet bags, checked bags that
exceed carriers' normal allowance, oversized/overweight checked bags,
and specialty checked bags such as sporting equipment and pets; (2)
requiring the highest amount per bag fee on an escalated fee scale be
refunded if one or some of multiple checked bags are significantly
delayed without a unique identifier for each checked bag that
correlates to the fee; and (3) requiring the lowest amount of baggage
fee the carrier charges another passenger of similar status without the
subscription be refunded to a passenger who paid a fixed price for a
baggage fee subscription program and a checked bag is significantly
delayed. The Department is also exempting from the requirement to
refund a fee for significantly delayed checked bag instances where the
delay is a result of: (1) passengers failing to comply with the
requirement of U.S. Customs and Border Protection to pick up a checked
bag at the first point of entry into the United States and recheck the
bag; (2) passengers agreeing to travel without their checked bag on the
same flight because they checked in late for the flight or are flying
as stand-by passengers; (3) a third-party delivery service that is not
a contactor or an agent of the carrier and, instead, is contracting
directly with the passenger failing to deliver the bag promptly; and
(4) passengers not being present to pick up a bag that arrived on time
at the passenger's ticketed final destination.
(i) Types of Bags Covered by the Refund Requirement
The requirement adopted in this final rule for airlines to refund
baggage fees when airlines significantly delay delivery of checked bags
does not distinguish between different types of checked bags. The
Department is defining checked bags to include gate-checked bags, valet
bags, checked bags that exceed carriers' normal allowances, oversized/
overweight checked bags, and specialty checked bags such as sporting
equipment and pets. This interpretation is consistent with the language
of section 41704 note, which refers only to ``checked baggage'' and
does not distinguish between different types of checked bags.
The Department acknowledges the need for special handling for
oversized or overweight bags but notes that carriers are not required
to accept these bags for transportation and those carriers that do
generally charge a higher fee. The Department is not persuaded by the
airlines' argument that including oversized/overweight bags in the
refund requirement will disincentivize carriers from accepting these
bags. We view competition the main incentive for carriers to continue
to accept these bags for transportation, with the prices of baggage
fees determined by the free market, based on consumer demands,
carriers' costs and risk, and the likelihood of timely delivery.
(ii) Amount of Refund When Multiple Checked Bags Are Transported Under
Escalated Fee Scale or Passenger Paid for Baggage Subscription Programs
Having received no objections in the comments, we are adopting the
proposal that when one of the multiple bags checked by a passenger was
significantly delayed by a carrier that adopts an escalated baggage fee
scale, and there is no specific fee assigned to the delayed bag, the
highest per bag fee should be refunded.
Regarding what the amount of the refund should be if a passenger
paid for a checked bag through a baggage subscription program and the
checked bag is significantly delayed, the Department is requiring that
airlines refund the passenger the amount that is equal to the lowest
amount the carrier charges another passenger of similar frequent flyer
status without the subscription. The Department is not convinced by
airlines' argument that delayed bags paid through a baggage
subscription program should be exempted from the refund requirement. In
support of this argument, airlines comment that passengers purchasing
the subscription are receiving a bargain on baggage transportation and
they understand the risk of not receiving a refund when a bag is
delayed. We disagree. Although passengers choosing to purchase the
subscription program receive a discount on the total cost of baggage
transportation over the subscription period based on their
[[Page 32799]]
anticipated travel frequencies, they still paid a fee to airlines to
transport their checked bags. The Department believes that these
passengers should receive a refund if the bag delay exceeds the
applicable timeline. Because it is difficult and impractical to
determine the amount of refund due based on the actual per bag fee
charged for the delayed bag, the Department is requiring a refund in
the amount that is equal to the lowest amount the carrier charges
another passenger of similar frequent flyer status without the
subscription.
(iii) Exemptions From the Refund Requirement
The Department generally agrees with commenters that when
passengers' own negligence is the cause of baggage delivery delay,
carriers should be exempted from the refund requirement. The Department
also shares the Colorado Attorney General's concerns that adopting a
general category of ``passenger negligence'' that exempts carriers from
the refund obligation may pose challenges to both consumers and
carriers. As a result, the Department specifies in this final rule the
particular circumstances in which carriers are exempted.
In the NPRM, the Department described situations where the baggage
delivery delay was due to a passenger's failure to comply with the
requirement of U.S. Customs and Border Protection to pick up a checked
bag at the first point of entry into the United States and recheck the
bag and a passenger failure to pick up the bag at the transition point
and recheck the bag with the second carrier when traveling with two
separate tickets.\68\ Many other situations were also cited by the
airline commenters as potentially qualifying for exemptions because the
passengers' own action of negligence caused the baggage delivery delay.
Of the various examples suggested by commenters as potentially
qualifying for an exemption, the Department agrees that situations
where passengers fail to pick up and recheck bags at international
entry points into the United States qualify for an exemption from the
refund bag fee requirement. The Department is also persuaded that an
exemption is appropriate when passengers are not present to pick up a
bag that arrived on time at the passenger's ticketed final destination
whether that is because the passenger traveled to a ``hidden city,''
the passenger failed to pick up the bag before taking a flight on a
separate ticket, or any other reason that is due to the fault of the
passenger if documented by the carrier.
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\68\ 86 FR 38423 (July 21, 2021).
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For different reasons, the Department has concluded that the other
situations described do not qualify for an exemption. For example,
carriers suggest that the Department should exempt carriers from the
refund obligation when the baggage delay was because passengers packed
prohibited items in their checked bags. However, based on the
Department's understanding of the procedures of the Transportation
Security Administration (TSA), in the vast majority of these cases, the
prohibited items would be removed from the bags during the screening
process, and the bags would be allowed to continue their travel. Based
on this understanding, the Department does not believe it is
appropriate to categorically exempt bags that are temporarily held by
TSA due to prohibited items being found in the bags. In addition, a bag
is not late when passengers purchase two separate tickets and fail to
collect the bag and recheck the bag with the second carrier. The second
carrier could not transport the bag on the same flight as the passenger
when the bag was never checked by the passenger, and the first carrier
is exempted for the delay because the passenger failed to pick up the
bag that arrived on time at the passenger's ticketed final destination.
Similarly, a bag is not late when a third-party that contracted
directly with the passenger picks it up from the carrier before 12
hours for domestic flights, 15 hours for international flights of 12
hours or less in duration, and 30 hours for international flights of
over 12 hours in duration. If the third-party then caused a delay in
the bag reaching the passenger, the carrier does not owe a refund of
the bag fee to the passenger.
As for the comment that the Department should exempt carriers from
refund liability when the baggage delay was a result of third-party
actions, the Department is of the view that an exemption is not
appropriate when the third-party actions took place while the bag was
in the custody of the airline before it has been delivered to the
passenger. Airlines in their comments suggest that the Department
should exempt a list of situations in which actions by a third-party
cause the baggage deliver delay. The Department's view is that a third-
party's action that directly causes significant bag delivery delays
while the bag is under a carrier's custody should not be exempted from
the requirement to refund the bag fee. Consistent with the Department's
policy for reporting mishandled baggage by U.S. carriers, a bag is in
the custody of a carrier beginning at the point in time which the
passenger hands the bag to the carrier's representative or agent, or
leaves the bag at a location as instructed by the carrier; a carrier's
custody ends when the passenger, a party acting on the passenger's
behalf, or another carrier takes possession of the bag.\69\ Bag delays
due to third-party actions (e.g., security authority or Customs holding
bags, airport baggage processing system failure, or recovery bag delays
due to carriers' compliance with the positive passenger-bag match
requirement) are not permissible grounds for exempting the carriers
from the baggage fee refund obligation because the affected bags are
under carriers' custody. Also, bag delays caused by another passenger
picking up the bag by mistake before the passenger or a party acting on
the passenger's behalf takes physical possession of the bag is not
exempted because the passenger provided his or her bag to the carrier
and the bag was not available to be picked up by that passenger at the
passenger's final destination.\70\
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\69\ See, Technical Reporting Directive #30A--Mishandled Baggage
and Wheelchairs and Scooters (Amended), Dec. 21, 2018.
\70\ Id.
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Consistent with this approach, the Department considers baggage
delays caused by a third-party delivery service to be a ground to
exempt the carrier from refunding baggage fees only if the third-party
is not a contactor or an agent of the carrier and, instead, is
contracting directly with the passenger. For example, if a passenger
arranges a third-party delivery service to pick up the bag at the
passenger's final destination airport and transport it to a location
designated by the passenger, the airline is exempted from refunding
baggage fees if the baggage delivery is delayed by that third-party,
who took possession of the bag from the carrier on behalf of the
passenger.
(iv) Waiver of Fee Refunds and Incidental Expenses for Voluntary
Separation
The Department is exempting airlines from the refund obligation
when passengers voluntarily agree to travel without their checked bags
on the same flight as a way to make the flight when they checked in
late for the flight or are flying as stand-by passengers. We agree with
commenters that carriers offering passengers different travel options
that meet their needs, including the option of traveling without their
bags on the same flight, benefits consumers. In those situations where
carriers are willing to accommodate passengers but may not have
adequate time to load the
[[Page 32800]]
passengers' bags onto the same flights, we believe it is fair to exempt
carriers from the baggage fee refund obligation provided that carriers
clearly disclose to the passenger that the checked bag may not arrive
promptly. In those circumstances, carriers are permitted to require
passengers sign a document waiving their right to a refund of the
baggage fees if the bag delivery is delayed beyond the regulatory
timelines. The waiver that carriers seek from passengers in these
situations must be limited to passengers relinquishing their right to
refund of bag fees if delayed beyond the regulatory timelines. The
waiver should also include an estimated delivery time and a delivery
location that the carrier and the passenger agreed upon. The waiver
must not include language suggesting that the passengers are
relinquishing their right to refund of bag fees if the bag is lost,
their right to compensation for damaged, lost, or pilfered bags, or
their right to incidental expenses arising from delayed bags beyond the
agreed upon delivery date/time consistent with the Department's
regulation in 14 CFR part 254 and applicable international treaties.
(v) Alternative Transportation
The Department has considered the comments regarding whether the
baggage fee refund requirements should apply to significantly delayed
bags when passengers arrange for alternative transportation. Passengers
choosing to arrange their own alternative transportation even after
already having handed over their checked bags to carriers' custody
often do so because their flight has been canceled or significantly
delayed. As explained later in this document, if a flight is canceled
or significantly changed and the passenger chooses not to fly with the
carrier, the passenger is entitled to receive a refund of the ancillary
service fee, including baggage fee, for a service that they paid for
and did not receive. Unless the carrier delivers the checked bag to the
passenger at an agreed-upon location, the checked bag fee must be
refunded.
The Department is also not persuaded that it should exempt from the
requirement to refund fees for significantly delayed bags when the
carrier arranges alternative air travel for its passengers because of a
flight cancellation or significant change by the carrier. The
requirement to refund fees for significantly delayed bags still applies
when the alternative transportation that the carrier arranges is a
later flight operated by that carrier or a flight by another carrier.
In those situations, the start of the delay when measuring the length
of the delay for a carrier to deliver a checked bag is when the
passenger arrives at his or her destination on the alternative air
transportation, consistent with the Department's position on start of
the baggage delay when passengers fly on their original scheduled
flight. Because the statute applies to delays in transporting bags on
flights and not on ground transportation, however, this rule requiring
carriers to refund fees for significantly delayed bags does not apply
to the alternative ground transportation.
As a final matter, the Department is providing clarification that
the refund requirement of 49 U.S.C. 41704 note covers ``any ancillary
fees paid by the passenger for checked baggage'' (emphasis added). It
is irrelevant whether the consumer uses a credit card, frequent flyer
miles/points, travel vouchers, or something else to pay the fee for the
checked bag. An ancillary fee is a fee for an optional service that is
not included as part of the fare and includes baggage fees charged
separately from the ticket price. To the extent that there was no
separate bag fee paid by any form of payment (e.g., credit card,
airline miles) because the transport of baggage was included as part of
the fare or the baggage fee was waived due to the passenger's airline
loyalty program status or as a benefit of using an airline-associated
credit card, carriers are not required to provide a refund as the
passenger did not pay an ``ancillary fee'' for the checked bag.
III. Refunding Ancillary Service Fees for Services Not Provided
1. Covered Entities and Flights
The NPRM: The Department proposed to mandate U.S. and foreign air
carriers provide refunds to consumers of the fees a passenger pays for
an ancillary service related to air travel on a flight to, from, or
within the United States that the passenger does not receive, including
retaining the existing regulatory requirement for such refunds due to
oversales and flight cancellations \71\ and other situations when the
ancillary service is not available to the passenger. The Department is
required by 49 U.S.C. 42301 note prec. to cover U.S. and foreign air
carriers that offer ancillary services for a fee on their domestic and
international flights.\72\ With respect to ticket agents, similar to
the requirement on refunding baggage fees for significantly delayed
bags, although the Department is not required by statute to cover them,
the NPRM stated that the Department has independent authority under 49
U.S.C. 41712, which prohibits ticket agents from engaging in unfair or
deceptive practices in air transportation, to include them in the
regulation if deemed appropriate. As such, in the NPRM, the Department
sought a general overview of ticket agents' role in the transaction and
collection ancillary service fees and the process of how fees collected
by ticket agents are transferred to carriers. The NPRM stated that this
information would assist the Department in determining whether its
regulation on ancillary fee refund should address ticket agents' role
and the role of other non-carrier entities involved in the sale of
ancillary fees.
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\71\ 14 CFR 259.5(b)(5) requires carriers to provide prompt
refunds where due, including refunding fees charged to a passenger
for optional services that the passenger was unable to use due to an
oversale situation or flight cancellation.
\72\ Section 421 of the FAA Reauthorization Act of 2018 (2018
FAA Act), which was codified under 49 U.S.C. 42301 note prec.,
directs the Department to promulgate regulations requiring ``each
covered air carrier'' to provide refunds of ancillary service fees
that a passenger paid for but did not receive. Section 401 of the
2018 FAA Act defines ``covered air carrier,'' as used in Section
421, to mean means an air carrier or a foreign air carrier as those
terms are defined in section 40102 of title 49, United States Code.
https://www.congress.gov/bill/115th-congress/house-bill/302/text?q=%7B%22search%22%3A%5B%22FAA+Reauthorization%22%5D%7D.
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Comments Received: The Department received no comments regarding
the scope of covered flights and covered carriers. With respect to
ticket agents, IATA indicated that the entity that collected the
ancillary fee should be responsible for the refund. Spirit also
supported a requirement for ticket agents to issue refunds if they
collected the fees. Ticket agent representatives' position on whether
they should be required to refund ancillary service fees when the
services are not provided is similar to their view on refunding baggage
fees for significantly delayed bags, which was summarized in that
section. In short, ticket agent representatives believe that based on
the statutory language of 49 U.S.C. 42301 note prec., which referred
only to air carriers, the infrequency of ticket agent-transacted
ancillary fees, and the role of ticket agents in those transactions
(i.e., acting as the agents of airlines), ticket agents should not be
required to refund ancillary service fees.
DOT Responses: The Department is requiring U.S. and foreign
carriers that operate scheduled passenger service to, within, and from
the U.S. to provide a refund to passengers of fees charged for an
ancillary service that is paid for but
[[Page 32801]]
not provided. The Department is applying this requirement to carriers
regardless of the aircraft size that the carriers operate. With regard
to ticket agents, the Department is not adopting in this final rule a
specific requirement for ticket agents to provide refunds of ancillary
service fees even if ticket agents collect the fees. The Department
believes that whether an ancillary service paid by a consumer was
provided by an airline is a factual matter better handled directly by
the airline through direct communication with passengers. The
Department views that placing responsibility to provide such refunds on
ticket agents may further complicate the matter and cause unnecessary
delays for consumers to receive a refund. Further, 49 U.S.C. 42301 note
prec. directs the Department to promulgate regulations requiring
``covered air carriers'' to provide refunds for ancillary service fees.
For these reasons, in this final rule, the Department is placing the
responsibility to provide refunds of ancillary service fees for
services not provided on carriers rather than ticket agents. The
Department will continue to monitor the transactions of ancillary
service fees conducted by ticket agents and may revisit the issue in
the future should it become necessary.
2. Need for Rulemaking
The NPRM: The Department proposed to require refunds of ancillary
service fees for services paid for but not provided to implement a
statutory provision of the FAA Reauthorization Act of 2018 (49 U.S.C.
42301 note prec.), and to codify the Department's longstanding
enforcement practice of viewing any airline practice of not refunding
fees for ancillary services that passengers paid for but are not
provided as an unfair or deceptive practice in violation of 49 U.S.C.
41712. The statutory provision in 49 U.S.C. 42301 note prec., requires
the Department to promulgate a rule that mandates that airlines
promptly provide a refund to a passenger of any ancillary fees paid for
services related to air travel that the passenger does not receive,
including on the passenger's scheduled flight, on a subsequent
replacement itinerary if there has been a rescheduling, or for a flight
not taken by the passenger. Currently, the Department's regulation in
14 CFR part 259.5(b)(5) explicitly requires that airlines refund fees
charged to a passenger for optional services that the passenger was
unable to use due to an oversale situation or flight cancellation.
Under the statutory authority of 49 U.S.C. 41712, which authorizes the
Department to investigate and, if necessary, take action to address
unfair or deceptive practices or unfair methods of competition by air
carriers, foreign air carriers, or ticket agents, the Department has a
longstanding enforcement policy that considers any airline practice of
not refunding fees for ancillary services that passengers paid for but
are not provided to be an unfair or deceptive practice in violation of
49 U.S.C. 41712, which goes beyond the situations related to oversales
or flight cancellations. In the NPRM, DOT proposed to retain the
existing regulatory requirement regarding ancillary fee refunds arising
from flight oversales or cancellations, and to further clarify that the
refund requirement would apply to any other situation in which an
airline fails to provide passengers the ancillary services that
passengers have paid for (e.g., passengers paid for using the in-flight
entertainment (IFE) system on a scheduled flight but the IFE system was
broken and could not be used by the passengers). DOT stated that the
inclusion of regulatory text requiring that airlines must refund
ancillary fees for services related to air travel that passengers did
not receive, as provided in 49 U.S.C. 42301 note prec., would not
impose additional requirements on airlines as airlines are already
providing refunds of ancillary fees when they fail to provide services
that passengers paid for, consistent with the Department's
interpretation of section 41712.
Comments Received: Virtually all consumers and consumer rights
advocacy groups who submitted comments expressed their general support
for this rulemaking. The majority of airlines and airline trade
associations that commented on the NPRM also supported the Department's
rulemaking to implement the Congressional mandate. Among airline
commenters, however, AAPA argued that it is not necessary to promulgate
a new rule because airlines generally are already providing refunds for
services not rendered on their initiative. AAPA also noted that
mandating prescriptive rules such as compulsory refunds for ancillary
services would stifle innovation and restrict consumers' freedom of
choice as it limits airlines' ability to offer other methods of
compensation, such as vouchers or airline miles, which could be more
attractive to the customer. Qatar Airways commented that it already
offers refunds of ancillary service fees when there is a flight
cancellation. Qatar also states that the majority of ancillary products
are transferred to the new itinerary when a schedule change has
occurred.
DOT Responses: The Department has concluded that the promulgation
of this regulation not only fulfills a statutory mandate, but also is
necessary to provide consistency and clarity to the regulated industry.
Although many airlines are already providing refunds of fees for
various ancillary services that they did not provide, this final rule
defines the scope of ancillary services that are subject to this refund
requirement and ensures that all carriers comply with the mandatory
requirements following a unified standard with respect to the method
and timeliness of refunds. The Department rejects AAPA's argument that
having a compulsory refunds requirement would stifle innovation as
under the mandatory refund requirement, airlines continue to have the
option to offer other compensation such as vouchers or airline miles to
consumers who did not receive the ancillary services they paid for, as
long as carriers clearly inform consumers that they are entitled to a
refund for the fees at the same time or before offering vouchers or
other non-cash compensation.
3. Definition of Ancillary Services
The NPRM: The provision in 49 U.S.C. 42301 note prec. requires that
airlines refund ancillary fees paid for services ``related to air
travel.'' As stated in the NPRM, the Department has not defined
``ancillary services'' in its aviation economic regulations and
proposes to adopt a definition that is substantially identical to the
definition for ``optional services'' in 14 CFR 399.85(d) \73\ which
requires U.S. and foreign air carriers to prominently disclose on their
websites marketing air transportation to U.S. consumers information on
fees for all optional services available to a passenger purchasing air
transportation. Specifically, DOT proposed to define ``ancillary
service'' to mean any service related to air travel provided by a
covered carrier, for a fee, beyond passenger air transportation. DOT
specified that such service includes, but is not limited to, checked or
carry-on baggage, advance seat selection, access to in-flight
entertainment system, in-flight beverages, snacks and meals, pillows
and blankets and seat upgrades. DOT noted that the definition in
section
[[Page 32802]]
399.85(d) does not include fees charged for services to be provided by
entities other than airlines, such as hotel accommodations or rental
cars, which are commonly offered by some airlines as a package during
the airfare reservation process. DOT sought comments on whether
adopting a definition for ``ancillary service'' that is similar to the
definition of ``optional service'' in section 399.85(d) is appropriate
in the context of ancillary service fee refunds.
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\73\ ``Optional services'' is defined as any service the airline
provides, for a fee, beyond passenger air transportation. Such fees
include, but are not limited to, charges for checked or carry-on
baggage, advance seat selection, inflight beverages, snacks and
meals, pillows and blankets and seat upgrades. 14 CFR 399.85(d).
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Comments Received: Airline and consumer commenters supported the
proposed definition for ``ancillary service.'' Spirit stated that it
supports the Department's efforts to harmonize the definition of
``ancillary services'' with that of ``optional services.'' AAPA
commented that an alignment of definitions is crucial to avoid
confusion for all stakeholders concerned, including passengers,
airlines, and service providers. A4A noted that Department should
clarify, in the definition, that ancillary service fees are not costs
included in a fare or as a prerequisite; and that ``ancillary
services'' do not include services provided pursuant to an agreement
directly between the passenger and a third-party service provider.
Among consumer commenters, Travelers United expressed its support for
the Department's proposed definition of ``ancillary services.''
Panasonic Avionics, a manufacturer of in-flight entertainment
(``IFE'') and in-flight connectivity (``IFC'') systems and a service
provider, commented that the proposed refund requirement should apply
only to covered carriers when they enter into a contract directly with
a passenger for the provision of an ancillary service and process that
passengers' payment for that ancillary service. It further stated that
the rule should not be construed to obligate covered carriers to issue
refunds when a passenger has contracted with a third-party service
provider for an ancillary service and made payment to that third-party
provider because in that case, the passengers' right to a refund will
be governed by the terms and conditions of sale between the third-party
provider and the passenger, with the third-party provider being
governed by the consumer protection regulations of its applicable
industry. Panasonic suggested that the Department's final rule should
clarify in the applicability section that the regulation ``is not
intended to address services provided by third-party service providers
that entered into a service contract and/or terms and conditions
directly with the passenger.'' Panasonic also suggested that the
definition of ``ancillary service'' should clarify that it does not
include services provided by third-party service providers that entered
into a service contract directly with the passenger.
The Department also received a comment from the Colorado Attorney
General, who, among other things, recommended that the Department's
final rule ensure that consumers paying additional fees for add-on
services truly receive items of tangible value.
DOT Response: With minor modifications, the Department is adopting
the NPRM's proposed scope and definition for ``ancillary services'' in
this final rule. The Department has considered A4A's comment that
ancillary services subject to the refund requirement should not include
services the costs of which are included in the airfare. We agree and
have modified the definition of ancillary service by adding the word
``optional'' to reflect that the ancillary services covered under this
rule are services that consumers can purchase at their discretion, and
they do not include services mandatorily included in airfares or
complimentary services provided to passengers without a separate
fee.\74\
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\74\ For passengers who did not receive an ancillary service
because of an airline cancellation or a significant change of flight
itinerary and the cost of the ancillary service is included in the
airfare as a mandatory charge, carriers are required to refund the
entire amount of airfare (all government taxes and fees and all
mandatory carrier-imposed fees). See 14 CFR 260.6(a). To the extent
that the cost of the ancillary service is not included in the
airfare, carriers are required to refund the fee when the ancillary
service was not provided because of a flight cancellation or
significant change. See 14 CFR 260.4(a).
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The Department has also considered Panasonic's and A4A's comments
regarding the need to expressly clarify that ``ancillary services'' in
this rule do not include services provided pursuant to an agreement
directly between the passenger and a third-party service provider. The
Department's authority to prohibit unfair or deceptive practices under
49 U.S.C. 41712 is limited to practices by U.S. carriers, foreign air
carriers, and ticket agents in air transportation or the sale of air
transportation. Also, the Department's authority to mandate prompt
refund to a passenger of any ancillary fees paid for services related
to air travel that the passenger did not receive pursuant to 49 U.S.C.
42301 note prec. is limited to carriers. The Department does not have
the authority to regulate the practices of other entities under these
statutory provisions. Accordingly, while not adopting the suggested
rule text amendments by Panasonic, we are clarifying that services
provided to passengers in relation to air travel pursuant to a contract
between passengers and an independent third-party provider that does
not act as an agent or contractor of an airline are not covered by this
refund requirement. The Department understands that some independent
third-party service providers may rely on airlines to refer interested
customers to them for service purchases. In circumstances where an
airline facilitates the purchase of an ancillary service but is not a
direct party in the service contract, the Department expects the
airline to provide clear disclaimer regarding the nature of the service
contract and inform consumers that they should communicate directly
with the service providers for any issues related to the service.
4. Refund Eligibility and Promptness of the Refund
The NPRM: The provision at 49 U.S.C. 42301 note prec. requires
covered carriers to refund ancillary service fees for services that ``a
passenger does not receive, including on the passenger's scheduled
flight, on a subsequent replacement itinerary if there has been a
rescheduling, or for a flight not taken by the passenger.'' The
Department interpreted the statute to mean that a passenger would be
eligible for a refund if he or she did not receive the ancillary
service paid for because (1) the service was not made available to the
passenger on the flight he or she took (either the original flights or
an alternative flight due to cancellation or schedule changes made by
the airlines or due to an oversales situation); or (2) if the passenger
did not take any flight due to the airline canceling the flight or
making a significant change to the flight. The proposal was focused on
whether a carrier failed to fulfill its obligation to provide the
service, as opposed to whether the service was utilized by the
passenger. If the service was available but a passenger did not use the
service, the passenger would not be entitled to a refund. Also under
this proposal, if the ancillary service is not available because a
flight schedule change affirmatively made by the passenger or due to
passenger action, carriers are not required to refund the service fee.
Regarding ``prompt'' refunds, the Department proposed to apply the
same standards to ancillary service fees when refunds are due that is
currently applicable to airline ticket refunds. In both situations,
prompt refund would mean refunds within seven days for credit card
transactions and 20 days for transactions involving cash, checks,
vouchers, or frequent flyer miles after the entity responsible for
issuing a
[[Page 32803]]
refund receives a request for a refund and the documentation necessary
for processing the refund.
Comments Received: Virtually all airlines and airline trade
organizations that provided comments supported the Department's
proposal that a passenger would be entitled to a refund of the
ancillary service fee if the passenger did not receive the ancillary
service. Several airlines commented that the Department's rule should
expressly state that a refund would not be required when the service
was available but was not used by the passenger, when the passenger
voluntarily changes or cancels their flight, or when the passenger
violates the check-in requirements, the contract of carriage, or
related policies. Spirit requested clarification on how to determine
whether a service ``was not provided'' and whether a partial provision
of the service would entitle a passenger to a refund. A4A stated that a
refund should not be required for issues relating to partial provision
of a service or the quality of the purchased ancillary service, as it
would be impossible for a carrier to determine when refunds would be
due or the proper amount of the refund. IATA and AAPA expressed their
support for applying the same ``promptness'' standards to refunding
ancillary service fees when refunds are due that is currently
applicable to refunds for tickets, fees for optional services that
could not be used due to an oversale or flight cancellation, and fees
for lost bags.
A joint comment by Business Travel Coalition and multiple other
consumer rights advocacy groups \75\ stated that the Department should
require carriers to automatically provide refunds for ancillary
services not provided without consumers needing to complain. The
consumer advocacy groups further stated that carriers should be
required to proactively track when ancillary services paid for by
passengers are not provided and to issue refunds automatically. They
also expressed concerns that any regulation requiring passengers to
seek out refunds will result in fewer refunds than consumers are
entitled to receive. Travelers United stated its support of the
Department's proposal and opines that passengers must request any
refund of ancillary fees. Travelers United further suggested that the
Department establish a form that can be used to notify both the airline
and DOT at the same time regarding any refund request for ancillary
service not provided.
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\75\ Consumer Action, Consumer Federation of America, Consumer
Reports, Edontravel.Com, Flyersrights.Org, National Consumers
League, Travel Fairness Now, and U.S. PIRG.
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In relation to its comments regarding the exclusion of third-party
provided services from the definition of ``ancillary services,''
Panasonic stated that in the context of satellite services it provides,
the discussion around refund eligibility must be left to the terms and
conditions established between the customer and the service provider,
not the covered carrier. However, Panasonic suggested that covered
carriers be required to post information related to contacting the
third-party service providers' support centers on carriers' websites or
other locations.
DOT Response: After carefully considering the comments received,
the Department has determined that, under certain circumstances where
consumers' rights to refunds of ancillary services is undisputed, it is
not necessary for carriers to wait to receive consumers' refund
requests to provide refunds. More specifically, carriers are required
to automatically refund fees for ancillary services in instances where
the service was not available for any passenger who paid for the
service, such as unavailable Wi-Fi for the entire flight. It should not
be necessary for the consumer to separately request a refund under
these circumstances because the carrier knows that no one on that
flight received the service.
The Department does not believe an ``automatic'' refund approach in
the same way is workable if the ancillary service is only unavailable
to an individual passenger or passengers (e.g., seatback entertainment
equipment malfunction). In these situations, the operating carrier of
the flight on which the paid ancillary service was not provided will
need to be informed of the issue so they can conduct an investigation
and verify refund eligibility. In our view, the affected consumer
notifying the operating carrier when a paid-for service is not received
is the most direct and efficient way to initiate the refund process.
Notifying the operating carrier about the service not being provided is
implicitly a request for refund by a consumer. The Department believes
that notifying the operating carriers about the service issue should
not be a significant burden to consumers. Carriers should make
information available on their website on the different avenues
available to customers to report such problems. Further, to the extent
the operating carrier and the carrier that collected the ancillary
service fee (merchant of record) are different carriers, the Department
is requiring the operating carrier to, without delay, verify the
passenger's claim about the ancillary service not being provided and
notify the collecting carrier if this is the case as described more
fully in the next section, so that the collecting carrier can provide
an automatic refund. The collecting carrier is responsible for
providing the refund. However, if a ticket agent collected the
ancillary service fee, then the operating carrier that failed to
provide the ancillary service is responsible for providing the
automatic refund.
Regarding comments on how to determine whether a service ``was not
provided'' and whether a partial provision of the service would entitle
a passenger to a refund, the Department interprets the provision of
section 42301 note prec. requiring refunds of fees for services that
``the passenger does not receive'' to mean a carrier has failed to
fulfill its obligation to provide the service as opposed to the quality
of the purchased ancillary service not being up to the expectation of
the passengers. The Department does consider partial service such as
providing Wi-Fi service for only a portion of the flight when a
consumer paid for Wi-Fi service to entitle a consumer to a refund.
The Department generally agrees with airlines' comments that a
refund should not be required when the service was available but was
not used by the passenger. The Department further recognizes that
actions by consumers may directly result in the pre-paid ancillary
services not being available to passengers and in these situations,
carriers are not required to provide refunds for the ancillary service
fees. The actions by passengers that exempt carriers from the
obligation to refund fees for ancillary services that a passenger does
not receive include the passenger taking another flight due to non-
compliance with minimum check-in time requirement or passengers being
denied boarding on a flight due to non-compliance with carriers'
contracts of carriage or governmental requirements. The Department
notes that passenger-initiated cancellations or changes permitted by
the terms of the tickets should not be a ground for carriers to refuse
refunds of ancillary service fees that the passengers do not receive.
For example, if a passenger holds a flexible ticket that allows the
passenger to change flights without charge and the passenger changes to
a new flight where the ancillary service that the passenger has paid
for is not available, the passenger is entitled to a refund of the fee
for that ancillary service.
With respect to Panasonic's comments on how to determine whether a
refund
[[Page 32804]]
is due for services provided by an independent third-party provider, as
stated in the previous section, passengers not receiving a service they
purchased directly from a third-party provider are not eligible to
receive a refund under this rule as this rule applies to carriers and
ticket agents. The passengers' refund eligibility will be governed by
the terms and conditions of the service contract with the third-party
provider and subject to applicable consumer protection laws. As
suggested by Panasonic, the Department encourages carriers to provide
consumers information on how to contact these third-party entities. The
Department also reminds carriers that when promoting or facilitating
the purchase of ancillary services or products provided by third-party
entities, carriers may not provide information that is misleading to
consumers as to which entity is responsible for providing the service
or issuing refunds to dissatisfied consumers.
On the timeliness of refunds, the Department is adopting the same
``promptness'' standards for refunding ancillary service fees as
proposed. A ``prompt'' refund of ancillary service fees means a refund
issued within 7 business days for credit card payments or within 20
calendar days for non-credit card payments. For automatic refunds, the
7/20-day clock starts when a consumer's right to a refund of an
ancillary service fee is clear. For circumstances where an
``automatic'' refund approach is not applicable, the 7/20-day clock
starts when the passenger has notified the operating carrier about the
unavailability of the service. The Department notes that adopting the
7- and 20-day refund timelines across the board on various refund
issues provides consistency to consumers, carriers, and other
stakeholder and streamlines carriers' customer service procedures,
complaint resolutions, and training.
5. Entity Responsible for Refund
The NPRM: The Department recognized that for codeshare or interline
itineraries or ticket agent-involved ancillary service fee
transactions, the entity that collected the ancillary fee may not
necessarily be the entity that is responsible for providing the
ancillary service. Similar to the multiple-carrier scenario for
refunding baggage fees for significantly delayed bags, the Department
proposed to hold the carrier that collected the ancillary service fee
responsible for issuing a refund when the ancillary service was not
provided. When a ticket agent collected the ancillary service fee, the
Department noted its understanding that the fee collected by a ticket
agent is passed on to the carrier whose ticket stock is used for
issuing the ticket and proposed to hold that carrier responsible for
issuing the refund. The Department further noted that 49 U.S.C. 42301
note prec. requires airlines to refund ancillary fees paid for services
related to air travel. For multiple-carrier itineraries for which a
ticket agent collected the fee, the Department proposed that the last
operating carrier issue the refunds, similar to the proposal for
refunding baggage fees for delayed bags. The Department sought general
information on ticket agents' role in the transaction and collection of
ancillary service fees.
Comments Received: Comments on ticket agents' responsibility to
refund were largely focused on refunding baggage fees for delayed bags.
However, most comments also mentioned that their positions on ticket
agents' responsibility to refund baggage fees should also apply to
refunding ancillary fees for services not provided. In summary, airline
commenters believed that ticket agents should be responsible for
refunding ancillary service fees if they collected the fees, especially
for multiple-carrier itineraries. One consumer rights advocacy group
argued that airlines should ultimately be responsible for refunds,
while two ticket agent representatives argued that airlines should be
responsible. Details of these comments are provided in the comment
summary section for refunding baggage fees for significantly delayed
bags.
DOT Response: For multiple-carrier itineraries where one of the
carriers collected the ancillary service fees, the Department is
adopting the same approach as for refunding fees for delayed bags to
require the carrier that collected the ancillary service fees (i.e.,
merchant of record) to provide refunds when the services were not
provided, regardless of whether the ancillary service at issue was not
provided on a flight operated by the collecting carrier. In the
Department's view, this approach is the most straightforward way to
initiate and process a refund request from consumers' perspectives. The
Department believes that the collecting carriers are in the best
position to process and issue refunds as they have direct visibility of
the passengers' selected ancillary services, the total amounts
consumers were charged, and consumers' payment information. As noted in
the prior section, automatic refunds are not required when the
ancillary service is only unavailable to an individual passenger or
passengers and under these circumstances passengers would need to
notify the operating carrier that an ancillary service that they paid
for was not available to them (e.g., seat upgrade was not provided or
seatback entertainment equipment malfunction), so carriers can conduct
an investigation to verify refund eligibility.
In situations where the carrier that collected the ancillary
service fee and the carrier(s) operating the flights are different
entities, the Department is requiring the carrier(s) that failed to
provide the passenger the ancillary service that the passenger paid for
to provide that information to the collecting carrier without delay.
Should the carrier that failed to provide the ancillary service not
know which entity collected the ancillary service fee from the
passenger, it can obtain that information from the passenger. The
Department's Office of Aviation Consumer Protection will determine the
timeliness of the information provided to the collecting carrier based
on the totality of the circumstances, including how soon after becoming
aware of the lack of service to the passenger did the carrier that
failed to provide the ancillary service notify the collecting carrier.
The collecting carrier remains responsible for providing the
refund. For example, a passenger purchased an itinerary that has two
flight segments, with the first segment operated by Carrier A, and the
second segment operated by Carrier B. Carrier A collected the ancillary
service fee (merchant of record) for a seat upgrade on the second
flight segment but the service was not provided. As this ancillary
service was unavailable only to this passenger, automatic refund is not
required. To obtain a refund, the passenger must inform Carrier B that
the paid for seat upgrade was not provided on the second segment.
Carrier A will be responsible for issuing the refund because it is the
collecting carrier, and Carrier B is responsible for informing Carrier
A that the paid for seat upgrade was not provided. The 7/20-day refund
timeline starts for Carrier A at the time that it receives information
from Carrier B that the paid for ancillary service was not provided.
For the same reasons articulated in the section on refunding
baggage fees for significantly delayed bags, in cases where ancillary
service fees are collected by a ticket agent for a single-carrier
itinerary, the Department will hold that carrier responsible for
issuing the refund. The Department notes that ticket agent
representatives stated in
[[Page 32805]]
their comments that when ticket agents collect ancillary service fees
including baggage fees, they do so primarily with the authorizations of
airlines and act as airlines' agents. Airline commenters did not
dispute this assertion. This approach is also consistent with 49 U.S.C.
42301 note prec., which requires ``each covered carrier'' to refund
ancillary fees paid for services that are not provided. Ticket agents
are encouraged to establish effective communication channels with
airlines that authorize them to transact ancillary service fees and
facilitate the refunds by providing necessary information to airlines.
Furthermore, when a ticket agent collects ancillary service fees
for multiple-carrier itineraries, the Department is requiring the
operating carrier of the flight on which the paid ancillary service was
not provided to issue the refund. To the extent that the carrier that
failed to provide the ancillary service does not know whether the
entity that collected the ancillary service fee from the passenger is a
ticket agent or a carrier, that information can be obtained from the
consumer. The Department believes that when no carrier is the merchant
of record, the operating carrier that failed to provide the service is
in the best position to issue refunds to the affected consumers. That
carrier would know if a service was not provided on the entire flight
that it operated or if specific passengers on that flight did not
receive the service. Because the operating carrier that failed to
provide the service is the entity that knows or can verify whether the
passenger received the ancillary service that the passenger paid for
when the service was to be provided on its own flight, that carrier is
the responsible party for providing a prompt refund when due. The
Department notes that, to the extent that the carrier that failed to
provide the ancillary service does not know whether the entity that
collected the ancillary service fee from the passenger is a ticket
agent or a carrier, that information can be obtained from the consumer.
Although the operating carrier that failed to provide the passenger
that ancillary service remains responsible for providing the refund
when a ticket agent collected the fee, a fee-for-service carrier that
fails to provide the ancillary service may choose to rely on other
entities, such as their marketing codeshare partner, to issue refunds
to consumers on its behalf. The Department expects the parties to work
together and develop effective communication to ensure that information
necessary to process passengers' refunds is transmitted in an accurate
and efficient manner.
This final rule makes it an unfair practice for carriers that did
not provide the paid for ancillary service to fail to timely inform the
collecting carrier or, if a ticket agent collected the fee, the last
operating carrier, that the service was not provided. The failure to
provide in a timely manner information about ancillary services that
have been paid for but not provided pauses the refund process and
causes substantial harm to consumers by extending the timeline under
which they are expected to receive the money they are entitled to. This
harm is not reasonably avoidable by consumers as they have no control
over how quickly this information is relayed which is what starts the
refund process. The Department also sees no benefits to consumers and
competition from this conduct. Without this requirement, money that is
owed to consumers may be kept by others indefinitely, which in turn
harms consumers and competition by penalizing good customer service and
rewarding dilatory behavior.
IV. Providing Travel Vouchers or Credits to Passengers Due to Concerns
Related to a Serious Communicable Disease
1. Statutory Authorities
The NPRM: The Department proposed this rulemaking pursuant to the
authority set forth in 49 U.S.C. 41712 to take action to address unfair
or deceptive practices or unfair methods of competition by air
carriers, foreign air carriers, or ticket agents. The Department also
relied on its authority in 49 U.S.C. 41702 to require air carriers to
provide safe and adequate service in interstate air transportation. The
Department noted that 49 U.S.C. 40101(a) directs the Department in
carrying out aviation economic programs, including issuing regulations
under 49 U.S.C. 41702 and 41712, to consider certain enumerated factors
as being in the public interest and consistent with public convenience
and necessity. These factors include ``the availability of a variety of
adequate, economic, efficient, and low-priced services without
unreasonable discrimination or unfair or deceptive practices'' and
``preventing unfair, deceptive, predatory, or anticompetitive practices
in air transportation,'' as well as ``assigning and maintaining safety
as the highest priority in air commerce.'' In issuing the NPRM, the
Department also discussed the Airline Deregulation Act of 1978 (ADA)
and noted that the ADA liberalized airlines' ability to freely price
air travel products based on, among other things, consumer demand, and
how airlines today offer a ``non-refundable'' ticket booking class that
restricts passengers' ability to change or cancel the reserved flights
in exchange for a lower price than tickets with more flexibilities for
consumers.
Regarding the authority under 49 U.S.C. 41712, the Department
stated its tentative position that it is an ``unfair practice'' \76\ by
an airline or a ticket agent to not provide non-expiring travel credits
or vouchers to consumers who are restricted or prohibited from
traveling by a governmental entity due to a serious communicable
disease (e.g., as a result of a stay at home order, entry restriction,
or border closure) or are advised by a medical professional or
determine consistent with public health guidance (e.g., CDC guidance)
not to travel to protect themselves or others from a serious
communicable disease. The Department articulated that consumers are
substantially harmed when they pay money for a service that they are
unable to use because they were directed or advised by governmental
entities or medical professionals or determine consistent with public
health guidance not to travel to protect themselves or others from a
serious communicable disease, and the airline or ticket agent does not
provide a non-expiring credit or voucher or a refund. The Department
pointed out that this substantial harm is not reasonably avoidable
because the only way to avoid it is to disregard public health guidance
or direction from governmental entities or medical professionals not to
travel and risk inflicting serious health consequences on themselves or
others. The Department added that the tangible and significant harm to
consumers of losing the entire value of their ticket is not outweighed
by potential benefits to consumers or competition. The Department
expressed concern that, to avoid financial loss, consumers who have or
may have contracted a serious communicable disease may choose to travel
even when they have been advised not to travel, which is not in the
public interest.
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\76\ A practice is ``unfair'' to consumers if it causes or is
likely to cause substantial injury, which is not reasonably
avoidable, and the harm is not outweighed by benefits to consumers
or competition. Proof of intent is not necessary to establish
unfairness. 14 CFR 399.79.
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The Department further stated that aside from enhanced protection
of consumers' financial interests, it believes that a regulation
providing protection to non-refundable ticket holders who are unable to
travel by air
[[Page 32806]]
due to reasonable concerns related to a serious communicable disease is
needed to promote and maintain a safe and adequate aviation
transportation system. Citing 49 U.S.C. 41702, which requires U.S.
carriers to provide safe and adequate interstate air transportation,
and 49 U.S.C. 40101(a), which directs the Department to consider
certain enumerated factors including ``assigning and maintaining safety
as the highest priority in air commerce'' in carrying out aviation
economic programs, the Department asserted that the proposals would
encourage certain consumers to postpone travel and avoid potential harm
to themselves and others in the aviation system. The Department sought
comments on whether requiring airlines and ticket agents to issue
travel credits or vouchers to non-refundable ticket holders in these
situations and refunds when entities receive government assistance is
an appropriate way for the Department to promote safe and adequate air
transportation.
Comments Received: Airline commenters stated that the NPRM failed
to establish legal justification for the proposals relating to
communicable diseases. A4A, RAA, IATA, AAPA, and Air Canada argued that
the proposals interfere with airlines' tiered fare structure and
threaten ``the availability of a variety of adequate, economic,
efficient, and low-priced service'' and therefore, are inconsistent
with the ADA and section 40101. They added that the proposals will
result in a smaller pricing gap between refundable fares and non-
refundable fares, with tickets priced closer to the higher fare group,
decreasing load factors, and impacting the commercial viability of
marginal routes and remote markets. A4A and IATA commented that it is
important to maintain non-refundable fares because they increase access
to air travel by providing the least expensive form of travel with a
trade-off that consumers who choose this option may not be able to
change or cancel the tickets. Air Canada commented that the proposals
violate the pricing freedom principle set forth in the U.S.--Canada
bilateral agreement.
A4A argued that any consumer harm stated in the Department's
analysis for ``unfair'' practice can be mitigated by readily available
market solutions such as travel insurance, refundable tickets, or
airlines waiving change fees during a public health emergency.
Similarly, two ticket agent representatives, ABTA and ASTA, commented
that they oppose the proposal because the harm that the proposal is
intending to address can be prevented by purchasing insurance or
refundable tickets and is therefore reasonably avoidable by consumers.
Furthermore, on the analysis for ``unfair'' practice, A4A contended
that any harm to consumers during a public health emergency is not
caused by a ``practice'' by a carrier or a ticket agent. A4A also
commented that the asserted authorities under sections 41712 and 41702
contradict the conclusion included in the Regulatory Impact Analysis
(RIA) for the NPRM that states the proposals would not decrease the
spread of a serious communicable disease by a measurable amount.
Lastly, A4A commented that the proposal on travel credits or vouchers
is inconsistent with the Federal Trade Commission (FTC) and agency
practices of other modes of transportation and other industries.
FlyersRights commented that the Department has the clear authority
and responsibility to promulgate the pandemic related provisions to
ensure airlines ``provide safe and adequate interstate air
transportation.'' It stated that the proposals would ensure any
passenger who has a serious communicable disease, who is complying with
government orders pertaining to pandemics, or who is following the
advice of governmental health and safety agencies, is able to cancel or
change their flight reservations through non-expiring travel credits,
releasing airlines from their obligation to transport the passengers
during a pandemic or when the passengers are contagious. FlyersRights
further argued that the Department also has the clear authority to
determine it is an unfair or deceptive practice for airlines to deny
refunds or non-expiring credits to passengers who have COVID-19 or
COVID-19 symptoms, who have had immediate exposure to someone with
COVID-19, or who have health conditions or fears that made it unsafe to
fly on planes or congregate at airports.
Regarding airlines' argument that the proposal will circumvent the
``non-refundable'' feature of the ticket booking class and result in
price increases, FlyersRights argued that in their view non-refundable
tickets do not provide a cheaper alternative for passengers. Regarding
airlines' rationale that enforcing the ``non-refundable'' feature
provides needed certainty that confirmed passengers will actually take
the flights and reduces the risk of airlines being unable to sell empty
seats closer to flight departure, which in turn allows airlines to keep
price low, FlyersRights commented that the same rationale can be
applied to passengers when their flights are cancelled or changed by
airlines closer to departure date, at which point passengers are likely
to pay a premium for alternative transportation. According to
FlyersRights, the airlines' rationale will result in the conclusion
that passengers having their flights cancelled or significantly changed
by airlines should receive a premium of the ticket price in addition to
refunds.
U.S. Travel Association commented that the proposals relating to
serious communicable disease are problematic because they are overly
broad, ambiguous, subjective, and outside of DOT authority. USTOA also
opposed the proposals and argued that the circumstances triggering the
proposed requirements are beyond airlines' control and the Department
fails to explain why not complying with the proposed requirements is an
unfair or deceptive practice. It also supported the airlines' argument
that there are other solutions for consumers such as travel insurance
or higher-priced fares with more flexibility. It stated that the RIA
acknowledges that the proposals would not be likely to reduce the
spread of disease, therefore weakening the argument for authority under
section 41702. U.S. Chamber of Commerce stated that the proposals are
overly broad and subject to abuse and the Department should require
vouchers or credits to be issued only when there is a public health
emergency that inhibits travel.
DOT Responses: The Department has carefully considered the comments
by stakeholders regarding the Department's stated authorities for
imposing requirements to protect consumers whose air travel plans are
affected by a serious communicable disease. We have reached the
conclusion that such protections are consistent with the Department's
authority to prohibit unfair or deceptive practices in air
transportation and are necessary to ensure consumers are treated fairly
when unexpected interruptions arising from a serious communicable
disease result in them being unable to travel by air or hesitant to
travel by air because traveling would pose potential harm to themselves
or others. The Department has further concluded that such protections
will contribute to the Department's mission in ensuring safe and
adequate interstate air transportation through economic regulations and
will not interfere with airlines' freedom of pricing as provided by the
ADA and bilateral agreements between the United States and other
jurisdictions.
[[Page 32807]]
A. Unfair Practice
Airline commenters do not dispute that consumers suffer a harm if
they do not receive travel credits or vouchers when they are unable to
travel due to a serious communicable disease. Instead, airline
commenters contended that the Department failed to demonstrate that not
providing travel credits or vouchers to consumers is an ``unfair
practice'' pursuant to 49 U.S.C. 41712 because: (1) the consumer harm
articulated in the NPRM is the result of a communicable disease
outbreak and is not caused by the ``practices'' of carriers; (2) the
harm is avoidable by consumers through the purchase of travel insurance
or refundable tickets; and (3) the harm is outweighed by countervailing
benefits to consumers or competition. For the reasons described below,
the Department disagrees with these assertions.
In the 2020 final rule \77\ that codifies the definition of
``unfair'' in 14 CFR 399.79, the Department also discussed the meaning
of the term ``practice.'' While that rule did not adopt a definition
for ``practice,'' it discussed how the Department would determine if an
act or omission was a practice. To be a ``practice'' in the aviation
consumer protection context, the conduct must generally be more than a
single incident, however, ``even a single incident may be indicative of
a practice if it reflects company policy, practice, training, or lack
of training.'' \78\ A carrier policy of not providing travel credits or
vouchers when consumers are unable to travel due to a serious
communicable disease is a practice. The fact that the outbreak of a
serious communicable disease is not the fault of a carrier does not
make carriers' policies of not providing travel credits or vouchers any
less of a practice.
---------------------------------------------------------------------------
\77\ Final Rule, Defining Unfair Or Deceptive Practices, 85 FR
78707, December 7, 2020.
\78\ See 85 FR 78707, 78710-78711 (Dec. 7, 2020).
---------------------------------------------------------------------------
The Department is not persuaded by the argument by airlines and
ticket agents that the proposed requirements ignore readily available
market solutions that could prevent the consumer harm. While refundable
tickets and travel insurance are intended to address uncertainty in
travel, the Department believes that it is unreasonable to expect
consumers to purchase travel insurance or refundable tickets to protect
their money just in case a pandemic occurs, or just in case a
government imposes a restriction or prohibition in relation to a
serious communicable disease when a pandemic has not been declared.
Also, some travel insurance policies do not provide protection against
cancellations related to a pandemic. The Department agrees that persons
who purchase airline tickets after a pandemic has been declared should
know the potential risks of purchasing a non-refundable ticket without
travel insurance. These consumers have the option to purchase
refundable tickets or appropriate travel insurance to avoid financial
loss should they not be able to travel due to a pandemic-related
reason. For consumers who are advised not to travel to protect
themselves during a public health emergency or consumers who are
prohibited or required to be quarantined for a substantial portion of
their trip by a governmental entity, the Department in this final rule
requires airlines to provide travel credits and vouchers to individuals
who purchased tickets prior to a public health emergency being declared
or, if there is no declaration of a public health emergency, before the
government prohibition or restriction for travel to that region. In
addition, the reason that the individuals are not traveling must be
because they want to protect themselves from a serious communicable
disease that led to the declaration of the public health emergency or
their travel is affected by the government prohibition/restriction
related to a serious communicable disease.
With respect to consumers who have or are likely to have contracted
a serious communicable disease, the Department requires that airlines
provide travel credits or vouchers to them regardless of whether their
travel is during a public health emergency and regardless of when they
purchased their tickets. It would not be reasonable to expect a
consumer to purchase a refundable ticket or travel insurance to ensure
that his or her financial interests are protected in case the consumer
contracts a serious communicable disease when a public health emergency
has not been declared. A consumer could not reasonably avoid the harm
of financial loss under those circumstances because the consumer likely
would not even think of conducting a risk assessment of contracting a
serious communicable disease when a public health emergency has not
been declared. For a consumer who purchased the ticket while a public
health emergency is ongoing, the Department believes that this
individual could have done a risk assessment and decided to purchase
travel insurance or a refundable ticket if the individual wished to not
risk financial harm. This individual traveling on a flight to avoid
financial harm, however, will cause or is likely to cause substantial
harm to the health of the other passengers on the flight. These other
passengers are not reasonably able to avoid this harm as they have no
control over this individual's actions and whether the airline seats
them in close proximity to this individual. The Department believes
that airlines not providing an incentive for the infected consumer to
postpone travel is likely to cause significant harm to other passengers
on the same flight by substantially increasing the likelihood of these
passengers being exposed to the disease and infected during the flight
and such harm cannot be reasonably avoided by these passengers as they
are likely to have no knowledge about them being seated in a close
proximity to an infected passenger. This harm is not outweighed by
benefits to consumers or competition as suggested by airlines. The
Department is of the view that the requirement to provide travel
credits or vouchers would not result in the elimination of
nonrefundable fares or in distorting the difference between a
refundable and non-refundable fare as some commenters have suggested
given that a public health emergency affecting travel to, within, and
from the United States on a large scale is infrequent and this
requirement only applies to consumers who purchased tickets prior to a
public health emergency and are unable or advised not to travel during
a public health emergency. Further, not providing vouchers and credits
to consumers who are advised not to travel during a pandemic could
result in some consumers risking their health or the health of others
to avoid financial loss, which is not in the public interest. The
Department doesn't believe there would be any benefit to consumers or
competition among airlines in infected or potentially infected
travelers possibly choosing to travel by air and infecting other
passengers.
B. Assertion of Inconsistency With FTC Policies
Regarding A4A's comment that the proposals relating to serious
communicable diseases are inconsistent with the policies of the FTC,
the practices of other modes of transportation, other segments of the
travel industry, or other industries, the Department notes that its
unfair or deceptive practices regulations are modeled on FTC's
regulations and policies. To the extent that there are differences
between DOT and FTC regulations, the Department notes that when
determining its own regulations and policies, it routinely considers,
among other things, the unique characteristics of the aviation
[[Page 32808]]
environment and context as well as any problematic areas, as reflected
by consumer complaints, for which a regulatory remedy should be
considered. In this instance, the Department has considered the large
number of consumer complaints it received during the COVID-19 pandemic
regarding the hardships consumers experienced when requesting credits
from airlines so they could postpone travel. These hardships include
airlines' refusal to issue credits or imposing limitations on the
credits that consumers view as unreasonable. In the Department's view,
these complaints are clear evidence that a regulation pursuant to the
Department's authority is needed. While the Department views
consistency among Federal consumer protection regulations as likely to
benefit consumers by reducing confusion, the Department also
appreciates the importance of regulations tailored to each regulated
industry.
C. Airline Deregulation Act
The Department disagrees with the comments that a requirement for
airlines to provide travel credits or vouchers for passengers unable to
travel due to a serious communicable disease is inconsistent with the
Airline Deregulation Act of 1978 and 49 U.S.C. 40101(a). These
commenters argue that the proposals interfere with airlines' freedom of
pricing, including the freedom of offering tiered fare structure that
incorporates different pricing reflecting the levels of flexibilities
for consumers to cancel or change tickets. In essence, the commenters
argue that the proposals will largely require more flexibility for non-
refundable tickets, blurring the lines between refundable fares and
non-refundable fares, resulting in higher prices for all consumers and
reduced load factors that also, in some cases, impact the commercial
viability of small and remote markets. IATA and A4A also note, in their
substantive comments on the Regulatory Impact Analysis for the proposed
rule, that the proposal to require travel credits and vouchers may
result in airlines eliminating basic economy fares if airlines can't
enforce basic economy change restrictions.
First and foremost, the proposals that we are finalizing here do
not affect the restrictions applicable to non-refundable tickets in
most cases outside of the context of a serious communicable disease
outbreak, such as the COVID-19 pandemic. The requirements protecting
consumers who are prohibited or restricted from travel by a government
order or consumers who are advised not to travel during a public health
emergency to protect themselves apply only to very specific cases in
which non-refundable ticket holders are impacted by an unforeseeable
event relating to a serious communicable disease and, as the result of
the impact of the event, consumers are either unable or advised not to
travel. Further, the Department is revising the proposal to enhance
measures airlines and ticket agents may adopt to prevent fraud and
abuse. For similar reasons, the Department disagrees with Air Canada's
comment that the proposals violate the pricing freedom principle set
forth in the bilateral aviation agreement between the United States and
Canada. Airlines can fully comply with the consumer protection
requirements finalized in this rule and continue to exercise freedom of
pricing and offer a variety of air travel products, including non-
refundable fares with lower prices and more restrictions, to meet the
market demands for adequate, economic, and efficient air transportation
services.
D. Safe and Adequate Interstate Air Transportation
With regard to the application of the legal authority under 49
U.S.C. 41702, which requires air carriers to provide safe and adequate
interstate air transportation, airline and ticket agent commenters
argue that the RIA prepared by the Department concludes that the
proposals would not decrease the spread of a serious communicable
disease by a measurable amount. The commenters state that the RIA
conclusion contradicts the NPRM's stated purpose of ensuring safe and
adequate interstate air transportation. We disagree. The Department
acknowledges that the RIA accompanying the NPRM stated that the
proposals would not have decreased the spread of serious communicable
disease by a measurable amount. In the RIA accompanying this final
rule, the Department estimates that 0.7% of COVID-19 infections were
transmitted on aircraft.\79\ The Department continues to believe that
the requirement to provide travel credits or vouchers to consumers who
have or are likely to have contracted a serious communicable disease
and would pose a direct threat to the health of others will reduce the
likelihood of passengers contracting communicable diseases in air
travel. As stated in the NPRM, it is the Department's understanding
that airlines in general would allow and prefer that a passenger with a
serious communicable disease in the contagious stage not travel, and
airlines would likely grant an exception from the tickets' non-
refundability to allow the passenger to reschedule travel. The
Department believes the low COVID-19 transmission rate was influenced
by airlines' actions of allowing passengers to reschedule travel. By
making the airlines' voluntary action mandatory, this rule would
further ensure safe and adequate interstate air transportation as
passengers would be assured that they can reschedule travel for when
they are well without facing financial loss.
---------------------------------------------------------------------------
\79\ See, Barnett, A., Fleming, K. Covid-19 Infection Risk on US
Domestic Airlines. July 2, 2022, https://link.springer.com/article/10.1007/s10729-022-09603-6#Sec3.
---------------------------------------------------------------------------
2. Need for Rulemaking
The NPRM: In the NPRM, the Department stated its view that a
regulation is needed to ensure consumers are consistently treated
fairly when they are unable or advised not to travel due to reasonable
concerns related to a serious communicable disease. The Department
further explained that the Department's existing regulation does not
require airlines to issue refunds or travel credits to passengers
holding non-refundable tickets when the airline operated the flight and
the passengers do not travel, regardless of the reason that the
passenger does not travel. The Department described its goal as
protecting consumers' financial interests when the disruptions to their
travel plans were caused by public health concerns beyond their
control. The Department also shared that it expects that the financial
protection would further incentivize individuals to postpone travel
when they are advised by a medical professional or determine consistent
with public health guidance not to travel because they have or may have
a serious communicable disease that would pose a threat to others. The
Department described how the COVID-19 pandemic imposed unprecedented
challenges on air travelers when numerous consumers were caught off
guard by the sudden events of government travel restrictions or the
widespread incidence of a serious communicable disease that impacted
their travel plans. The Department expressed its view that the need for
regulatory intervention arises when, despite airlines voluntarily
offering travel credits or vouchers in situations where a passenger
states that he or she was unable to travel or advised not to travel due
to COVID-19 related reasons, consumers were frustrated by the short
validity periods of the credits and vouchers, the strict conditions
imposed
[[Page 32809]]
on them, and the difficulties to obtain and redeem them.
The Department stated its view that consumers are acting reasonably
when they decide to not travel because they have or may have contracted
a serious communicable disease that may pose risks to others during air
travel, or because their own health conditions are such that traveling
during a public health emergency may put them at higher risk of harm to
their health. Further, the Department pointed out that consumers may be
unable to travel due to government travel restrictions related to the
pandemic. In the NPRM, the Department stated its tentative position
that a regulation is needed to ensure consumers are consistently
treated fairly when they are unable or advised not to travel due to
reasonable concerns related to a serious communicable disease. It
further stated that a regulation defining the baseline of
accommodations to non-refundable ticket holders and identifying the
specific circumstances that would give rise to the need to accommodate
passengers when they cancel or postpone their travel would greatly
enhance consumer protection. The Department pointed out that without
such requirements, airlines and ticket agents may have different
interpretations of what types of events would be sufficient to justify
a deviation from the non-refundable terms of a ticket, and such
different application of interpretations may result in increased
consumer confusion and frustration, as well as increased administrative
cost to airlines and ticket agents for handling customer service
requests and complaints from consumers with different perspectives.
Comments Received: Most ticket agent representatives argued that
the proposals may create tremendous financial burden and disincentivize
airlines from offering non-refundable fares. Global Business Travel
Association argued that airlines should have the flexibility to deal
with public health emergency related issues. It further added that the
Department, airlines, and ticket agents lack public health expertise to
navigate the proposals.
FlyersRights asserted that without the proposed protections,
consumers would be forced to forfeit the money they paid for the
tickets or to take a flight against the orders, recommendations, or
medical advice of government health agencies or medical professionals,
resulting in some passengers making the financial decisions to fly
while sick, contagious, or immunocompromised, or with the strong
suspicion of being sick.
National Consumers League expressed its view that the Department
should require airlines and ticket agents to provide travel credits or
vouchers to consumers who cannot fly due to health-related reasons,
regardless of public health emergency declarations, public health
agency guidance, or serious risk of communicable disease. It commented
that developing a health condition that would make air travel dangerous
to the passenger or others after purchasing the airline ticket is
something beyond the passenger's control. It suggested that it is in
the public interest for the passenger to be protected from losing the
ticket investment. Travelers United also supported a broader ``airline
sick passenger rule'' that would require airlines to allow passengers
with legitimate illnesses to postpone flights without additional costs.
Travelers United provided examples of inflight disease outbreaks and
argues that airlines charging change fees for sick passengers to
postpone travel could result in additional cost to airlines.
U.S. Travel Association asserted that the proposals affect
passengers who have bought travel insurance policies because they would
have to wait until the credits or vouchers expire before they can be
reimbursed by the insurance carrier, and many passengers would not
prefer vouchers. It further stated that the proposals introduce fraud
risk because some consumers may attempt to file insurance claims and
also receive credits or vouchers. Travel Tech supported a rulemaking to
address consumer protection in the context of communicable disease but
argued that the requirements should exempt ticket agents.
DOT Responses: The Department continues to be of the view that a
regulation is needed to ensure consumers are consistently treated
fairly when they are unable or advised not to travel due to reasonable
concerns related to a serious communicable disease. Approximately 20%
of the refund complaints that the Department received from January 1,
2020 to June 30, 2021, involved instances in which passengers with non-
refundable tickets chose not to travel because of considerations
related to the COVID-19 pandemic.\80\ As for U.S. Travel Association's
comment that insurance companies require consumers to wait until
credits or vouchers expire before consumers can be reimbursed, the
Department anticipates that insurance companies will offer a variety of
products that meet consumers' different needs to stay competitive after
the final rule takes effect. The Department also acknowledges the
concerns by several consumer rights advocacy groups regarding the need
for a broader regulation requiring airlines to allow passengers with
any legitimate illness to postpone travel without additional cost.
Because the NPRM's focus is on the three categories of consumers
affected by a serious communicable disease, however, and the public did
not have the opportunity to fully consider and comment on this broader
issue, we decline to address it here.
---------------------------------------------------------------------------
\80\ See Report to the White House Competition Council, p. 11.
---------------------------------------------------------------------------
3. Covered Entities
The NPRM: The Department proposed to require the entity that
``sold'' an airline ticket (i.e., the entity identified in the
consumer's financial statement, such as credit card statement), whether
a carrier or a ticket agent, provide travel credits or vouchers to
eligible consumers affected by a serious communicable disease. The
Department noted, however, that it is open to suggestions on whether
the entity obligated to issue credits or vouchers should be determined
based on other criteria and solicited comment on whether airlines
should solely be responsible for issuing credits or vouchers because
they are the direct providers of the air transportation paid for by
consumers and the ultimate recipients of the consumer funds. The
Department asked how it can best ensure that credits and vouchers
issued by an airline is prompt if a ticket agent is the entity that
``sold'' the ticket. The Department inquired about what role and
responsibility it should place on ticket agents that sold airline
tickets to facilitate the issuance of credits or vouchers by airlines
when the ticket agents are the principals of the transactions.
Comments Received: A4A supported the proposal to require ticket
agents to provide travel credits valid for use within the ticket
agent's system, arguing that ticket agents cannot issue credits valid
for use on a carrier. National Consumers League supported the
Department's proposal as applicable to airlines and ticket agents.
Ticket agent representatives expressed concerns about applying the
proposals to ticket agents. USTOA stated that the Department did not
consider the training and administrative costs for ticket agents to
screen passenger documentation. It further stated that such a
requirement has never been placed on ticket agents, only on airlines.
Travel Management Coalition commented that airlines should issue
[[Page 32810]]
credits to eligible travelers, but that for business travelers, the
corporate clients would not want the travelers to get credits that can
be used for their personal travel. It suggested that ticket agents
should be involved in those situations for the issuance and management
of credits. Travel Tech provided the following reasons for which it
believes that the proposals should not apply to ticket agents: (1)
airlines should be the origination of the credits that are airline
instruments designed for future travel on the airline on which the
consumer originally scheduled to travel, even when the ticket agents
are the merchants of record; (2) airline fare rules dictate the
conditions of the credits; (3) ticket agents may have assisted the
issuance of credits during the COVID-19 pandemic according to the
instructions provided by airlines; requiring ticket agents to issue
their own credits is administratively wasteful because ticket agents
will have to work with each airline and create their own credits; and
(4) requiring ticket agents to issue credits can be confusing to
consumers because there could be situations in which the rule empowers
both airlines and ticket agents to evaluate consumer documentation,
which may create inconsistency.
DOT Responses: The Department is requiring that airlines are the
sole entities responsible for issuing travel credits or vouchers to
eligible consumers whose travel is affected by a serious communicable
disease, even if the original tickets were purchased from a ticket
agent who acted as the merchant of record. The comments from airlines
and ticket agents noted that ticket agents cannot issue credits valid
for future travel with a carrier. The Department also agrees with the
comment that it is a significant burden to create and manage their own
credits or voucher systems including coordinating with various airlines
to ensure that the credits or vouchers are usable. The Department
considers this burden to be particularly substantial for small ticket
agents. In addition, like Travel Tech, the Department believes having
both airlines and ticket agents issue travel credits and vouchers could
further increase the likelihood of consumer confusion. Airlines that
are the merchants of record for the ticket transactions will be
responsible for issuing the travel credits or vouchers to eligible
consumers. When a ticket agent is the merchant of record, each
operating carrier is responsible for issuing a travel credit or voucher
to the consumer. Under this final rule, although a fee-for-service
carrier operating the flight is ultimately responsible for issuing
travel credits or vouchers for ticket agent-transacted itineraries, it
is permissible for the carrier to rely on other entities, such as their
marketing codeshare partner, to process and issue travel credits or
vouchers to consumers on its behalf.
This does not mean that ticket agents don't have a role to play in
the issuance of travel credits or vouchers. The Department encourages
ticket agents to assist airlines by providing information that airlines
may need to complete the issuance of the travel credit or voucher, such
as consumers' contact information or the price paid by consumers for
the original tickets.
4. Definition of Serious Communicable Disease
The NPRM: The Department proposed to define a serious communicable
disease to mean a communicable disease as defined in 42 CFR 70.1 \81\
that has serious consequences and can be easily transmitted by casual
contact in an aircraft cabin environment. The Department did not
propose to include a list of communicable diseases under the
definition. Instead, it stated that the analysis of whether a
communicable disease is ``serious'' under the NPRM is similar to the
analysis of ``direct threat'' under the Department's Air Carrier Access
Act regulation,\82\ which considers the significance of the
consequences of a communicable disease and the degree to which it can
be readily transmitted by casual contact in an aircraft cabin
environment. The Department further provided examples of diseases that
do and do not meet the two-prong analysis under the proposed
definition--readily transmissible in the aircraft cabin and likely to
result in significant health consequences. For example, the Department
explained that the common cold is readily transmissible in an aircraft
cabin environment but does not have severe health consequences. AIDS
has serious health consequences but is not readily transmissible in an
aircraft cabin environment. Both the common cold and AIDS would not be
considered serious communicable diseases. SARS is readily transmissible
in an aircraft cabin environment and has severe health consequences.
SARS would be considered a serious communicable disease. The Department
asked whether it is sufficiently clear to the regulated entities and
the public as to which types of communicable diseases would and would
not be considered serious.
---------------------------------------------------------------------------
\81\ 42 CFR 70.1 states ``Communicable diseases means illnesses
due to infectious agents or their toxic products, which may be
transmitted from a reservoir to a susceptible host either directly
as from an infected person or animal or indirectly through the
agency of an intermediate plant or animal host, vector, or the
inanimate environment.''
\82\ See 14 CFR 382.21(b)(2).
---------------------------------------------------------------------------
Comments Received: Airline commenters were concerned about the
proposed definition for ``serious communicable disease,'' stating it
uses terms that are too vague. A4A asked for more clarity on the terms
``easily transmissible in the aircraft cabin'' and ``casual contact.''
IATA further commented that the term ``serious consequence'' in the
analysis for serious communicable disease does not consider that the
consequence of a disease could differ from person to person.
Airline commenters also disputed statements in the NPRM that COVID-
19 is easily transmissible in aircraft cabins. In written comments,
IATA and A4A separately asserted that the NPRM's claim that COVID-19 is
easily transmissible in aircraft cabin is inconsistent with the
research that shows it is not highly transmissible in aircraft cabin
due to the filtration and air circulation system. During the March 21,
2023 public hearing, however, an IATA Medical Advisor suggested that
the final rule should highlight only those diseases that medical
consensus suggests is likely to be spread by aerosols or droplets in an
aircraft environment as ``serious communicable diseases,'' which he
stated is likely to include only respiratory infections that are highly
contagious such as measles or COVID-19 and perhaps in unusual cases,
gastrointestinal ones such as Norovirus. He opined that any medical
assessment even by medical professionals needs to have the information
on what is a ``serious communicable disease'' to adequately determine
the risk onboard. The IATA Medical Advisor also pointed out that
certain diseases that could be considered communicable in other
locations may be less threatening in aircraft environment due to cabin
conditioning flow rates, filtration systems, and other aircraft
characteristics making transmission significantly less likely than in
other public gathering locations.
DOT Responses: The Department is adopting the proposed definition
for ``serious communicable disease,'' which means a communicable
disease as defined in 42 CFR 70.1 that has serious health consequences
and can be easily transmitted by casual contact in an aircraft cabin
environment. The Department declines to adopt a definition with an
exclusive list of
[[Page 32811]]
communicable diseases or highlight only those communicable diseases
that are spread by aerosols or droplets in an aircraft environment
because the Department does not believe a list based on currently known
diseases would serve its purpose in the long term. The definition of
serious communicable disease continues to include the examples provided
in the NPRM to demonstrate that a ``serious communicable disease'' must
meet both prongs of the definition--``serious health consequence'' and
``can be easily transmitted by casual contact in an aircraft cabin
environment.''
The Department acknowledges that the consequence of contracting a
communicable disease on an individual may vary depending on the
individual's health condition. ``Serious health consequence'' is
referring to the health of an average person rather than health of each
individual. For example, the average person would not have serious
health consequences from a common cold, though it can be life
threatening for people with weak immune systems, such as a cancer
patient undergoing treatment.
As for the meaning of ``can be easily transmitted by casual contact
in an aircraft cabin environment,'' the Department has reviewed public
health guidance issued by CDC and WHO, which find that although modern
aircraft ventilation and air filtration systems do play an important
role in reducing the likelihood of disease transmissions, transmissions
of infection may occur \83\ between passengers who are seated in the
same area of an aircraft, usually by contact with infectious droplets
(as a result of the infected individual coughing or sneezing) or by
touch (direct contact or touching communal surfaces that other
passengers touch).\84\ Accordingly, the Department determines that a
communicable disease that ``can be easily transmitted by casual contact
in the aircraft cabin environment'' to mean a disease that is easily
spread to others in an aircraft cabin through general activities of
passengers such as sitting next to someone, shaking hands, talking to
someone, or touching communal surfaces.
---------------------------------------------------------------------------
\83\ A study led by MIT scholars estimated that between June
2020 and February 2021, the probability of contracting COVID-19
onboard an average domestic flight was about 1 in 2000. See fn. 75,
supra.
\84\ See, CDC Air Travel Yellow Book 2024, https://wwwnc.cdc.gov/travel/yellowbook/2024/air-land-sea/air-travel#inflight; World Health Organization Air Travel Advice,
https://www.who.int/news-room/questions-and-answers/item/air-travel-advice.
---------------------------------------------------------------------------
5. Passengers Who Are Advised by a Medical Professional Not To Travel
To Protect Themselves During a Public Health Emergency
The NPRM: The Department proposed that, when there is a public
health emergency, airlines and ticket agents must provide non-expiring
travel credits or vouchers to non-refundable ticket holders who are
advised by a medical professional or determine consistent with public
health guidance issued by the CDC, comparable agencies, or WHO not to
travel by air to protect themselves from a serious communicable
disease. Under this NPRM, to be eligible for the travel credits or
vouchers, the non-refundable ticket holder must have booked the ticket
before the beginning of the public health emergency and the travel date
must be during the public health emergency. The Department proposed to
define ``public health emergency'' based on the U.S. Department of
Health and Human Services (HHS) regulation addressing measures taken by
CDC to quarantine or otherwise prevent the spread of communicable
diseases, 42 CFR 70.1.\85\ The Department sought comments regarding
whether the proposal is reasonable with respect to the passengers
protected, asking whether the protection should be extended to
passengers who purchased their tickets after the public health
emergency is declared but did not develop the underlying health
condition until after the tickets are purchased. The Department also
sought comments regarding whether it is reasonable to extend the
proposed requirements to passengers who sought to defer travel because
they are the caregivers of persons with a health condition and at a
higher risk, and passengers who would have difficulty traveling alone
when their travel companion qualifies for a voucher or refund. The
Department also asked whether there are obstacles airlines and ticket
agents faced when some of them voluntarily provided travel vouchers to
consumers who decided not to travel during the COVID-19 pandemic. The
Department also solicited comment on whether consumers experienced
difficulties in redeeming credits and vouchers issued to them and what
the Department should consider in the proposed regulation to address or
resolve these difficulties.
---------------------------------------------------------------------------
\85\ The definition for public health emergency in 42 CFR 70.1
is: (1) Any communicable disease event as determined by the Director
with either documented or significant potential for regional,
national, or international communicable disease spread or that is
highly likely to cause death or serious illness if not properly
controlled; or (2) Any communicable disease event described in a
declaration by the Secretary pursuant to 319(a) of the Public Health
Service Act (42 U.S.C. 247d (a)); or (3) Any communicable disease
event the occurrence of which is notified to the World Health
Organization, in accordance with Articles 6 and 7 of the
International Health Regulations, as one that may constitute a
Public Health Emergency of International Concern; or (4) Any
communicable disease event the occurrence of which is determined by
the Director-General of the World Health Organization, in accordance
with Article 12 of the International Health Regulations, to
constitute a Public Health Emergency of International Concern; or
(5) Any communicable disease event for which the Director-General of
the World Health Organization, in accordance with Articles 15 or 16
of the International Health Regulations, has issued temporary or
standing recommendations for purposes of preventing or promptly
detecting the occurrence or reoccurrence of the communicable
disease.
---------------------------------------------------------------------------
Comments Received: Airline commenters stated that the proposal
includes vague and unclear terms and subjective standards that will
cause substantial consumer and carrier confusion. A4A commented that
the proposed definition for ``public health emergency'' is too broad.
It noted that there are over 100 events during the past five years that
would qualify under the definition. It further argued that there needs
to be a connection between a passenger's travel and the public health
emergency, and that an event in another country should not be used to
protect domestic passengers. IATA argued that governments around the
world took different approaches towards COVID-19, from being very
restrictive to extremely permissive, but the NPRM presupposes that all
governments take a uniform approach. Both A4A and IATA also commented
that more clarity is needed on what are ``comparable agencies in other
countries'' that would be qualified to issue the public health
guidance. AAPA opined that it is difficult for airlines to verify the
authenticity of the documentation from various governments that
passengers may provide airlines to prove their eligibility for travel
credits or vouchers. Further, A4A and IATA commented that the term
``medical professional'' is a vague term that is not defined. A4A and
IATA both opposed the proposal to allow passengers to ``determine''
whether they should travel. A4A argued that this is a subjective
standard and IATA added that allowing passengers to self-determine
whether they should travel based on public health guidance is
inconsistent with the rule text that allows airlines to request medical
documentation.
A4A suggested and IATA supported that: (1) the requirement cover
only a public health emergency that occurs in the United States at a
national level; (2) eligible passengers must have purchased their
tickets before the public health
[[Page 32812]]
emergency declaration; (3) the travel must have been planned to occur
during the public health emergency; and (4) the reason that an eligible
passenger is not traveling must be because of the public health
emergency. Similar to A4A, U.S. Chamber of Commerce also suggested that
the Department should limit travel credits or vouchers to medical
situations when there is a Public Health Emergency and to situations
that inhibit travel (such as a prohibition by a government entity).
U.S. Chamber of Commerce commented that the Department's proposal would
be subject to abuse by bad actors. SATA opposed the proposal and stated
that when passengers holding non-refundable tickets are not comfortable
with traveling and the flight is operated, airlines offer higher fares
with more flexibilities and airlines should not be obligated to issue
refunds or credits.
Regarding the Department's inquiry in the NPRM on whether the
credits or vouchers protection should be extended to passengers who are
the caregivers of persons with a health condition and at a higher risk,
and passengers who would have difficulty traveling alone when their
travel companion qualifies for a voucher, A4A opposed the expansion of
the proposal and argued that including flight credits to caregivers
will exacerbate the potential for mistakes, misunderstandings, and
fraud by introducing another undefined and unclear mandate. IATA also
opposed the expansion of the credits to caregivers. It further argued
that children should not be eligible for credits based on the provision
of a credit to their adult companion because parents concerned about
such a possibility can purchase travel insurance. AAPA opposed the idea
of providing travel credits or vouchers to passengers who are
caregivers of individuals with underlying health conditions, arguing
that this is too broad a scope that would be open to fraud. USTOA also
opposed requiring credits or voucher to be issued to caregivers of
persons with health conditions, either though family relationship or
employment.
Many individual consumers expressed their general support for the
proposals relating to serious communicable diseases, including the
proposal to provide travel credits and vouchers to passengers who do
not travel during a public health emergency because of concerns about
their health. Consumer rights groups commented that the proposals
should be expanded to cover medical situations beyond public health
emergency or communicable diseases. The ACPAC voted to support the
Department's proposal to protect travelers affected by a serious
communicable disease, including the proposal to require airlines and
ticket agents to issue travel credits or vouchers to passengers who
purchased the airline ticket before a public health emergency was
declared, the consumer is scheduled to travel during the public health
emergency, and the consumer is advised by a medical professional or
determines consistent with public health guidance issued by CDC,
comparable agencies in other countries, or the WHO not to travel by air
to protect himself or herself from a serious communicable disease.\86\
At least one individual commenter supported providing regulatory
protections for caregivers.
---------------------------------------------------------------------------
\86\ Among the four members of ACPAC, three members voted in
support of this recommendation and the member representing airlines
abstained, stating that there are many terms in the proposal that
are not clear and may cause more passenger confusion.
---------------------------------------------------------------------------
DOT Responses: After reviewing and carefully considering the
comments, the Department is requiring airlines to provide travel
credits or vouchers to passengers who have been advised by licensed
treating medical professionals not to travel during a public health
emergency to protect themselves from a serious communicable disease.
The Department is not expanding this requirement to provide travel
credits and vouchers to cover situations beyond a public health
emergency or serious communicable diseases as suggested by consumer
groups. The Department agrees with A4A and U.S. Chamber of Commerce
that the requirement for travel credits or vouchers should be limited
to medical situations when there is a public health emergency. Under
this rule, to be eligible for a travel credit or voucher, the passenger
must have purchased the airline ticket before the public health
emergency was declared, and the ticket must be for an itinerary to,
from, or within the United States that involves traveling to or from a
point affected by the public health emergency during the public health
emergency.
The Department does not agree with the suggestion from airlines to
limit the requirement to provide travel credits or vouchers to only
public health emergencies that occur in the United States because an
outbreak of a serious communicable disease in another country can
affect passengers traveling between the United States and that country.
However, the Department agrees that there needs to be a connection
between a passenger's travel and the public health emergency. For
example, a public health emergency relating to an outbreak of Ebola in
another country would be grounds for a passenger to request a travel
credit or voucher only if the passenger's planned travel, as reflected
in a single itinerary, is between the United States and that country.
In that regard, if the passenger booked two separate tickets, one from
the United States to a connecting third country not subject to the
public health emergency, and the other from the third country to the
outbreak country, the Department would not require airlines to issue
credits or vouchers based on the passenger's health-related concerns
about traveling to the outbreak country.
The Department is persuaded by comments that its proposal to allow
individuals to self-determine consistent with public health guidance
whether to travel to protect themselves from a serious communicable
disease is subjective. Unless otherwise directed by HHS, this rule
allows airlines to require medical documentation from passengers who
state that they do not wish to travel during a public health emergency
for a medical reason to protect themselves. An airline may not require
passengers to provide documentation from a medical professional if HHS
issues public health guidance declaring that requiring such medical
documentation is not in the public interest.
The Department further acknowledges comments from industry seeking
clarity about the meaning of the terms ``medical professional'' and
``comparable agencies in other countries.'' In this final rule, the
term ``medical professional,'' is defined in the regulation. The
Department is adopting a definition for the term ``licensed treating
medical professional'' to mean an individual, including a physician, a
nurse practitioner, and a physician's assistant, who is licensed or
authorized under the law of a State or territory in the United States
or a comparable jurisdiction in another country to engage in the
practice of medicine, to diagnose or treat a patient for a specific
physical health condition that is the reason for the passenger to
request a travel credit or voucher. The Department is providing further
explanation of this definition in the section that discusses medical
documentation. The Department no longer uses the term ``comparable
agencies in other countries'' when referencing public health guidance
that the consumers' licensed treating medical professionals may rely on
or reference when providing professional opinions regarding whether the
consumers should travel because that term is also subjective. In this
final rule, the Department states ``consistent with
[[Page 32813]]
public health guidance issued by the Centers for Disease Control and
Prevention (CDC) or the World Health Organization (WHO).''
Regarding whether caregivers of high-risk passengers should be
protected, the Department is persuaded that extending the requirement
to provide travel credits or vouchers to caregivers of people who have
health conditions that place them at a higher risk of contracting a
serious communicable disease may increase the risk of fraud. The
Department also agrees that the complexity of appropriately defining
this expanded group and verifying their eligibility can be burdensome
for airlines. While not expanding the scope of the rule to these
consumers, the Department encourages carriers to provide good customer
service by offering maximum flexibilities to consumers who request to
postpone their travel due to a genuine concern about the health of
their families and others who are dependent upon them for care.
6. Passengers Who Are Prohibited From Travel or Required To Quarantine
for a Substantial Portion of Trip by Government Entity
The NPRM: The Department proposed to require airlines and ticket
agents to provide travel credits or vouchers to ticket holders who are
unable to travel because of a U.S. (Federal, State, or local) or
foreign government restriction or prohibition related to a serious
communicable disease regardless of whether there is a public health
emergency. Examples of such government restrictions or prohibitions
include government issued ``stay at home'' orders, ``shelter in place''
orders, or government-instituted border closure or entry restrictions
because of a serious communicable disease for certain types of
passengers. The Department further explained that under the proposal,
the requirement would cover passengers who can travel under the
government order, but the restriction has rendered the passenger's
travel ``meaningless.'' Passengers would not be entitled to a travel
credit or voucher if they simply failed to exercise due diligence to
ensure that all conditions for travel imposed by the governments of the
departure, transit, or arrival locations are met (e.g., negative test
result for a communicable disease). The Department solicited comments
on whether the proposed requirement for a non-expiring voucher or
credit strikes the right balance given that the travel restrictions are
out of the airlines' and ticket agents' control and the differential
economic impact of a refund mandate versus a travel credit or voucher
on airlines and ticket agents in these circumstances.
Comments Received: Airlines in general were concerned about the
scope of the proposal which, in their view, is too broad and
subjective, making it difficult to determine whether a passenger is
eligible for a travel credit or voucher. Spirit opposed the proposal,
stating that it shifts the risk of whether a consumer can fly entirely
to airlines when the restriction is not the fault of airlines or
consumers. It commented that there should be a reasonable balance of
risks between airlines and passengers. A4A commented that the proposal
does not explicitly require that a government order prevent the
passenger from traveling, instead, by using the term ``restriction'' it
implies that passengers could be eligible for credits even if they have
partial discretion to travel. Several airline commenters argued that
determining whether a passenger is ``unable to travel'' or the
restriction renders travel ``meaningless'' requires a case-by-case
analysis looking into the purpose of each passenger's travel, subject
to different interpretations. They were also concerned about
significant resources needed for airlines to determine whether a
passenger has exercised ``due diligence'' to comply with each
jurisdiction's travel requirements. Also, airlines were concerned about
the proposal's language that does not limit the eligible travel to
``air travel.'' In that regard, they argued that the Department is
burdening carries with obligations to provide travel credits when the
non-air portion of the travel, not under the carrier's control, may be
prohibited by a government order.
A4A provided several suggestions on how the proposal should be
revised. First, A4A suggested that the term ``unable to travel'' should
be replaced by the term ``prohibited from travel by air.'' Second, A4A
recommended that the Department should remove the ``rendering travel
meaningless'' standard from the regulation. Third, A4A asked the
Department to include an explicit list of all scenarios that would
disqualify a passenger for receiving travel credits. Fourth, A4A
suggested that carriers should be required to issue travel credits only
when the government order directly and substantially impacts the
origination or destination of the passenger's itinerary. Over 1,500
individual consumers expressed their general support for the proposed
protections for consumers affected by a serious communicable disease.
Consumer rights advocacy groups did not specifically comment on the
proposal of requiring airlines and ticket agents to issue travel
credits or vouchers to passengers who are unable to travel due to a
government restriction or prohibition relating to a serious
communicable disease.
Among ticket agent's representatives, ASTA, DWHSA, Travel Tech, and
ABTA supported this proposal. ASTA commented that consumers should be
provided credits or a voucher because they are prevented from travel by
government actions and failing to so do meets the standard for unfair
practice. USTOA stated that modifications of the proposal are needed
because ``unable to travel'' is too broad and vague and the term
``prohibited from travel'' should be used instead. It also opposed the
inclusion of situations in which travel is rendered ``meaningless''
because this term is too subjective. GBTA commented that the proposal
is enormously burdensome to airlines and ticket agents because it would
require them to consider foreign government orders and public health
guidance when determining passenger's eligibility to travel credits or
vouchers, and also consider the timing of these documents' issuance
relative to the ticket purchase date and the travel date. The ACPAC
voted to support the Department's proposal to, regardless of whether
there is a public health emergency, require airlines and ticket agents
to provide travel credits or vouchers to consumers who are unable to
travel because of a U.S. (Federal, State or local) or foreign
government restriction or prohibition (e.g., stay at home order, entry
restriction, or border closure) in relation to a serious communicable
disease that is issued after the ticket purchase.\87\
---------------------------------------------------------------------------
\87\ Among the four members of ACPAC, three members voted in
support of this recommendation and the member representing A4A voted
against the recommendation, stating that there are many terms in the
proposal that are not clear, and it will cause more passenger
confusion.
---------------------------------------------------------------------------
DOT Responses: Having fully considered the comments, the Department
has decided to adopt a final rule largely along the lines set forth in
the NPRM, with a few changes to address comments received from airlines
about the difficulty and cost in determining which government
restrictions would render travel ``meaningless'' and whether a
passenger exercised ``due diligence'' to comply with each
jurisdiction's travel requirements. These changes also further ensure
the Department's actions are within its statutory authority. In this
final rule, the Department is requiring airlines to provide travel
credit or vouchers to non-refundable ticket holders who are prohibited
from travel or required to quarantine for a
[[Page 32814]]
substantial portion of the planned trip by the U.S. or foreign
government in relation to a serious communicable disease. The
Department has decided to replace the term ``unable to travel'' by the
term ``prohibited from travel'' and to remove the ``rendering travel
meaningless'' standard as suggested by airline commenters. In place of
``rendering travel meaningless,'' the Department is specifying that the
travel restriction that would entitle a consumer to a travel credit or
voucher is a mandatory quarantine for more than 50% of the length of
the passenger's scheduled trip at the destination (excluding travel
dates) as shown on the passenger's itinerary. In addition, the
Department is limiting the requirement for airlines to provide travel
credits and vouchers to consumers who purchased the airline ticket
before a public health emergency affecting the passenger's origination
or destination was declared or, if there is no declaration of a public
health emergency, before the government prohibition or restriction for
travel to or from the affected region is imposed. Passengers cannot
reasonably avoid the harm of financial loss under these circumstances
because they would have no reason to think there would be a government
prohibition from travel or mandatory quarantine requirement at the
passenger's origination or destination in relation to a serious
communicable disease when a public health emergency has not been
declared.
Beginning in January 2020, governments all over the world began
taking various measures to try to curb the spread of COVID-19,
including government-issued stay-at-home orders, business closure
orders, border entry limits or quotas, quarantine requirements for
arrivals, and restrictions or bans for commercial flights from certain
originations. Many of these government orders impacted air travelers
directly by making travel impossible through prohibitions from travel
or indirectly by severely limiting the activities that travelers
intended to engage in at the destinations through mandatory
quarantines. Based on the comments, it appears that all stakeholders
agree that passengers who are banned or prohibited from travel by air
should be protected by the proposed requirement. The Department does
not agree, however, that the scope of the consumer protection
requirement should be limited to these passengers. The proposal's goal
is to mitigate the financial losses suffered by air travelers during a
communicable disease outbreak so severe that it triggers drastic
actions by governments to restrict the movements of people. It is the
Department's view that consumers who bought their airline tickets
before the issuance of a public health emergency or, if there is no
declaration of a public health emergency, before a government order
prohibiting travel or restricting movement through mandatory
quarantines should have the ability to retain the value they paid into
the airline tickets.
The Department acknowledges the concerns about certain language
used in the NPRM that could be construed as vague and subjective. As
such, in finalizing this proposal, we are amending the rule text to
provide more clarity. Specifically, the term ``unable to travel'' is
replaced by ``prohibited from travel.'' The Department notes that the
government order does not have to prohibit air travel. A passenger is
entitled to a travel voucher or credit if the passenger is prohibited
from travel by a government order (i.e., an order prohibiting the
passenger from traveling to or from the airport at the origination or
destination) from entering the destination country/city as show in the
passenger's itinerary or from boarding the flight(s). As proof of
eligibility, airlines may require these passengers to provide the
relevant government order and any appropriate supporting documentation
to show the nexus between the government order and their inability to
travel. For example, if a passenger states that he or she is prohibited
from entering the destination country by a government order because of
the passenger's nationality, carriers may require proof of the
passenger's nationality in addition to the relevant government order
prohibiting passengers of certain nationalities from entering.
With respect to government orders that do not prohibit travel but
substantially restrict travel, the Department has considered airline
comments that ``the restriction that renders travel meaningless''
standard is subjective and requires a case-by-case analysis into the
purpose of each passenger's travel. As a result, the Department has
removed the ``rendering travel meaningless'' standard. In the NPRM, the
Department had explained what it meant by renders travel meaningless
through an example of a passenger who plans to spend a week at the
vacation destination and the local government imposes a seven-day
quarantine requirement for all arriving passengers, which eliminates
the purpose of the travel. Allegiant Air criticized the Department for
picking the ``low-hanging fruit'' by providing this example and asked
that the Department also opine on whether a passenger would be eligible
for the proposed protection if only a part of the time at the
destination is lost. The Department agrees that more clarity is needed
in this respect so that airlines have more certainty on their
obligation and consumes are treated consistently from airline to
airline.
In place of the ``rendering travel meaningless'' standard, the
Department specifies in this final rule that the travel restriction
that would entitle a consumer to a travel credit or voucher is a
mandatory quarantine at the passenger's destination for more than 50%
of the length of the passenger's planned trip. As proof of eligibility,
airlines may require passengers to provide the relevant government
order mandating a quarantine which includes information about the
length of the quarantine and documentation to show the length of the
passenger's planned time at the destination, excluding the travel
dates. This amendment should address carriers' concern about fraud and
abuse.
7. Passengers Who Are Advised by a Medical Professional Not To Travel
To Protect the Health of Others
The NPRM: Beyond widespread infections of a communicable disease
that lead to a ``public health emergency'' declaration or government
orders restricting or prohibiting travel, the Department also proposed
to require airlines and ticket agents to issue travel credits or
vouchers to passengers who are advised or determine not to travel to
protect the health of others because they have or may have contracted a
serious communicable disease, regardless of whether there is a public
health emergency. The Department stated that it believes that airlines
in general would allow and prefer that a passenger with a serious
communicable disease in the contagious stage not travel, and airlines
would likely grant an exception from the tickets' non-refundability to
allow the passenger to reschedule travel. The Department described
airlines' current practices in assessing whether a passenger with a
communicable disease would pose a direct threat to the health of others
such as requesting medical documentation and in minimizing risk to
other passengers such as taking precautions to prevent the transmission
of the disease in the cabin while transporting the passenger, or if
appropriate, denying boarding and allowing the passenger to reschedule
travel. The Department expressed its belief that it would be in the
interest of carriers, passengers, and the public at
[[Page 32815]]
large for the travel to be postponed. The Department noted that this
proposal would cover only passengers who have or may have contracted a
serious communicable disease and the consumer's condition is such that
traveling on a commercial flight would pose a direct threat to the
health of others based on advice from a medical professional or the
consumer's determination consistent with public health authorities
issued by CDC, comparable agencies in other countries, or WHO.
The Department noted that using economic tools as incentives to
discourage passengers who would pose a risk to the health of others
from traveling is consistent with its mission to ensure that the air
transportation system is safe and adequate for the public. It also
noted its expectation that requests for credits or vouchers under this
circumstance should be infrequent and will likely place minimal burden
on the airlines outside of the context of public health emergencies.
The Department solicited comment on the potential for abuse and whether
a documentation requirement is sufficient to prevent abuse. Further,
the Department asked for suggestions on alternative methods to protect
consumers who are advised by a medical professional or determine
consistent with public health guidance not to travel because they have
or may have a serious communicable disease.
Comments Received: A4A expressed its concern about this proposal
not being tied to either a public health emergency or a government-
issued order. It argued that the proposal allowing passengers to
subjectively determine that they should not travel ``consistent with''
public health guidance will cause tremendous confusion and impose
significant costs to carriers. Like A4A, several other airline
commenters expressed their concerns about the broad scope of the
proposal that protects not only passengers advised by a medical
professional not to travel due to contracting a serious communicable
disease, but also passengers who rely on public health guidance issued
by governments around the world to determine that they should not
travel. Airline commenters were generally concerned about allowing
consumers who ``may have'' a serious communicable disease to receive
travel credits or vouchers. Commenters asserted that this broad scope
will would lead to bad faith actors engaging in fraud and abuse and
good faith consumers cancelling travel based on misinformation,
creating a huge workload for carriers and the Department to resolve
complaints. A4A also asked the Department to clarify whether the
``comparable agencies in other countries'' whose guidance may be relied
on by consumers include third-party non-government entities if these
entities' guidance is relied on by state or local level governments.
IATA and AAPA stated that airlines already have policies in place
to accommodate passengers who are not able to travel due to a
communicable disease, including requiring medical documentation. They
argued that the Department has offered no evidence to show that these
policies do not work. NACA stated that it is too broad to impose the
proposal irrespective of a public health emergency. A4A also commented
that the proposal does not require that passengers must have purchased
their tickets before contracting the disease, which could result in
passengers who purchased tickets while knowing they have a serious
communicable disease to be eligible for the protection.
Travelers United stated that an airline ``sick-passenger rule''
would help stop disease spread and should be enforced all the time, not
just during public health emergencies. It commented that airlines'
current ``sick passenger rule,'' which allows postponing travel but
with a fee, has resulted in sick passengers deciding to continue
travel. On the other hand, according to Travelers United, airlines that
allow sick passengers to postpone travel without charge have reported
no problems of fraud.
Similar to airlines, ticket agent representatives raised concerns
about the scope and ambiguity of certain terms used in the proposal.
USTOA commented that requiring credits or vouchers be issued to
passengers who ``may have'' contracted a serious communicable disease
will invite abuse and fraud. It stated that the protection should be
tied to a public health emergency. GBTA asserted that the NPRM does not
define ``serious communicable disease'' in an actionable way and the
Department, airlines, and ticket agents lack the public health
expertise to navigate the requirements of the proposed definition. It
further commented that the proposal leaves it open on who would need to
verify a passenger's health status and what mechanism would be used to
settle disputes. ABTA suggested that if the Department moves forward
with this proposal, airlines and ticket agents should be allowed to
require clear evidential documentations issued by certificated and
qualified medical professionals. Travel Tech opined that instead of the
proposed requirement, airlines should be required to rebook without
charge to accommodate passengers who have or may have contracted a
serious communicable disease. The ACPAC discussed this proposal and
recommended to the Department to adopt a rule that requires airlines
and ticket agents to provide travel credits or vouchers when a consumer
is advised by a medical professional or determines consistent with
public health guidance issued by CDC, comparable agencies in other
countries, or WHO not to travel by air because the consumer has or may
have contracted a serious communicable disease, and the consumer's
condition is such that traveling on a commercial flight would pose a
direct threat to the health of others. The ACPAC recommended that the
requirement apply regardless of whether there is a public health
emergency.\88\
---------------------------------------------------------------------------
\88\ Among the four members of ACPAC, three members voted in
support of this recommendation and the member representing airlines
abstained, stating that there are many terms in the proposal that
are not clear and may cause more passenger confusion.
---------------------------------------------------------------------------
Public Hearing: The March 21, 2023, public hearing held under the
requirement of 14 CFR 399.75 discussed the subject of whether a
consumer can make reasonable self-determination regarding contracting a
serious communicable disease. In the Notice announcing the hearing, the
Department requested interested parties to provide information on
airlines' and ticket agents' current practice in handling consumers'
requests to cancel or postpone travel due to contracting a serious
communicable disease. The Department further asked for data on the
volume of such requests, the volume of requests that were considered
fraudulent, and the volume of requests that were not considered
fraudulent but were rejected because they were deemed ``unreasonable
self-determination.'' The Department also requested information on the
costs to airlines and ticket agents to verify consumers' claims
regarding contracting a serious communicable disease and the type of
diseases being claimed as a reason to postpone or cancel travel.
During the March 21 public hearing, a representative of
FlyersRights commented that consumers can make reasonable self-
determinations regarding contracting a serious communicable disease. He
specifically mentioned that during the COVID-19 pandemic, many
passengers avoided flying when they self-determined that they were
COVID-positive. A representative from National
[[Page 32816]]
Consumers League stated that the Department should not accept the
assumption that consumers cannot make reasonable self-determinations
and that consumers will abuse this proposed right. He further argued
that the proposal is consistent with the CDC's longstanding approach
that advises people to stay home while they are sick. On the subject of
abuse, he stated that should an airline determine that a passenger is
serially abusing this right, nothing would prevent the airline from
refusing service to such a passenger in the future. On the cost of the
proposal, he commented that the Department should not accept the
assertion that consumers exercising this right will significantly
increase cost to airlines. In that regard, he pointed out that airlines
are required to issue credits, not refunds, which means they can
continue to earn interest from the money consumers used to purchase the
tickets, until the credits are used. He further commented that airlines
can also sell the vacated seats, likely for a higher price because it
would be closer to travel dates.
Several airline representatives provided comments during the public
hearing. One A4A representative commented that nearly all the data
sought by the Department in the public hearing notice does not answer
the question that is the subject of the hearing because there is no
current standard applied for seeking credits or refunds for a ``serious
communicable disease'' and that the information sought by the
Department would have nothing to do with the reasonableness of
consumers' self-determinations. Two representatives from MedAire spoke
at the hearing at the request of A4A and IATA. One speaker commented
that from his experiences as a medical doctor for MedAire, he strongly
believes that self-determining a medical condition regarding
communicable disease is not a simple matter. He opined that properly
trained medical professionals are the only ones who can ultimately make
these determinations. He concluded that if the practice of self-
determination is to be entertained, strict and specific criteria need
to be applied, and such criteria should be subject to changes according
to prevailing public health guidance issued by central health
authorities. The other speaker from MedAire commented that the
Department should analyze the topic from an operational perspective. He
stated that MedAire trains crew members on how to handle medical
conditions and how to comply with the Air Carrier Access Act
regulation, 14 CFR part 382. He stated that there could be confusion
among crew members and customer service agents regarding the
requirement of this NPRM and the requirement of Part 382. He expressed
his concern that the terminology associated with Part 382 and the
terminology proposed in this NPRM, such as ``direct threat'' and
``serious communicable disease,'' is not aligned and that the
Department should look into achieving some alignment to avoid
confusion. A doctor from Harvard medical school also spoke at the
request of A4A and IATA. As an expert in airborne transmission of
disease during transportation and a lung physician, he stated that his
perspective is to try to assess the potential for individuals to judge
whether they have a serious transmissible infection. He indicated that
for diseases such as COVID that can be tested at home, there is
consensus that an individual who tested positive should not travel. He
commented that, however, there are a variety of viral respiratory
infections for which there are no tests. He opined that even erring on
the side of assuming there was a respiratory infection, particularly
when accompanied by a fever, during a pandemic or endemic, it is still
difficult for an individual to be sure that they have a disease that is
communicable. He expressed his concerns about the accuracy of self-
determination as well as the potential for a reasonable public health
precaution being used by individuals who change travel plan for reasons
not related to health. He concluded that it is very difficult to self-
determine that one has a serious communicable disease in a way that is
operationally honest and fair to both sides.
Next, an IATA medical advisor specializing in occupational and air
space medicine provided comments. He pointed out that airlines today
already regularly accommodate passengers by offering travel credits or
vouchers to passengers who have been diagnosed by a medical doctor as
having a communicable disease that could threaten the health of other
passengers on an aircraft, and airlines normally make the determination
on the validity of the passenger's claim through reviews of the medical
documentation provided by airline medical advisers, either in house or
contracted by external organizations such as MedAire. He stated that he
believes a final rule in this area must provide greater guidance as to
what should or should not be considered a threat to other passengers in
an aircraft environment. He stated that the medical system is based on
the premise that trained medical professionals are best positioned to
diagnosis diseases, weigh medical risks, and prescribe appropriate
management. He concluded that any final rule in this area must require
passengers seeking a refund or voucher to present documentation
verifying that a medical professional has seen the passenger and
assessed them for a particular serious communicable disease and that
the presence of that passenger in the aircraft threatens the safety of
other passengers. In that regard, he urged the Department to eliminate
the self-diagnose option from any final rule, to provide a short list
of likely conditions of concern, to require that any definition of
communicable disease recognize the unique nature of aircraft
environment, and to provide that the airline's medical service be given
the final determination in any case of doubt.
Following the March 21 public hearing, A4A and IATA filed
supplemental comments to reiterate their positions that consumers
cannot reasonably self-diagnose and medical professionals are best
positioned to diagnose and proscribe appropriate treatments. This
position is supported by Spirit. USTOA also supported the airlines'
position and added that, if the Department moves forward with this
proposal, it should be limited to consumers who present a medical
attestation completed by a licensed physician who is actually treating
the individual.
DOT Responses: After considering all the comments, the Department
is requiring airlines to provide travel credits or vouchers to
consumers who are advised by a medical professional not to travel,
irrespective of a public health emergency, because the consumers have
or are likely to have contracted a serious communicable disease and
would pose a direct threat to the health of others. An airline may
require documentation from a passenger under these circumstances absent
a public health directive or order issued by HHS stating that requiring
medical documentation is not in the public interest.
This final rule differs from the proposal in that it allows
airlines to require documentation from a licensed medical professional
that the passenger has or is likely to have a serious communicable
disease and the consumer's condition is such that traveling on a
commercial flight would pose a direct threat to the health of others.
Under this final rule, unless directed otherwise by HHS, airlines are
not required to accept consumers' self-diagnosis as evidence that they
[[Page 32817]]
contracted a serious communicable disease ``consistent with'' public
health guidance as proposed. The Department has determined that a
documentation requirement is in the public interest as it would prevent
consumer confusion on whether they should or shouldn't take a flight
and minimize likelihood of fraud or abuse.
In addition to allowing airlines to require medical documentation,
the Department has made other smaller changes in response to the
comments received in the docket and at the public hearing. Regarding
covered passengers, we agree with airline and ticket agent commenters
that the phrase the consumer ``may have contracted a serious
communicable disease'' could potentially be misunderstood should
individuals self-diagnose whether they have a communicable disease. As
stated in the prior paragraph, under this final rule, airlines are not
required to accept the assertion by consumers, based on self-diagnosis,
that they contracted or may have contracted a serious communicable
disease as evidence of their eligibility for credits or vouchers.
However, the Department disagrees with some airlines' suggestion that
the Department eliminate the term ``may have'' entirely and only
include passengers who have been clinically confirmed to have a serious
communicable disease. As medical professionals indicated during the
public hearing, some communicable disease cannot be diagnosed with a
simple test that can be administered at home or at a clinic. Instead,
diagnosing certain serious communicable diseases would require much
more comprehensive medical procedures. Also, at the public hearing, a
medical expert stated that during a pandemic or epidemic when a
communicable disease is known to be widespread, public health experts
may tend to be in favor of erring on the side of assuming infection
when an individual displays typical symptoms of a communicable disease
and there is no confirmation of infection available. Further, requiring
a confirmed diagnosis for a disease, particularly when readily
available testing is not an option, does not serve the public interest.
Accordingly, instead of a passenger who ``may have'' contracted a
serious communicable disease, the final rule uses the term ``is likely
to have'' contracted a serious communicable disease and, in absence of
HHS stating that requiring medical documentation is not in the public
interest, an assertion that a passenger ``has or is likely to have'' a
serious communicable disease must be supported by credible medical
documentation. The Department believes that this amendment to the NPRM
proposal enhances clarity and will reduce fraud and abuse, while
ensuring that the rule appropriately includes passengers who don't have
a confirmed diagnosis but were considered likely to have an infection
by a treating medical professional so they are incentivized to postpone
travel while medically considered to be potentially contagious.
Also, on the scope of protected passengers, the final rule
clarifies that when a passenger who has or is likely to have a serious
communicable disease purchased a ticket is irrelevant to the
passenger's eligibility for a travel credit or voucher. As stated in
the legal authority section, the Department believes that it is
unreasonable to expect a passenger to purchase a refundable ticket or
travel insurance for the purpose of gaining more flexibility to
postpone travel due to contracting a serious communicable disease when
a public health emergency has not been declared. Passengers who
purchased their tickets during a public health emergency, however,
could reasonably have imagined contracting a serious communicable
disease and could have purchased a refundable ticket or travel
insurance to avoid risk of financial loss. Nevertheless, an airline's
practice of not providing travel credits or vouchers to those
passengers is an unfair practice because it is likely to cause harm to
the health of other passengers, which they cannot reasonably avoid if
the potentially infected passengers choose to continue travel to avoid
financial loss as set forth in section IV.1(i).
Regarding comments to align the definition of ``direct threat'' and
``serious communicable disease'' in this proposed rule to the
definition of those terms in the Department's disability regulation,
the Department views that these terms as used in this final rule to be
consistent with the terms as used in the disability regulation. The
Department's regulation implementing the Air Carrier Access Act, 14 CFR
part 382, provides that a ``direct threat'' is a significant risk to
the health or safety of others that cannot be eliminated by a
modification of policies, practices, or procedures, or by the provision
of auxiliary aids or services.\89\ We note that the context for the
``direct threat'' assessment under Part 382 is different from the
context here. In Part 382, the regulatory goal of requiring carriers to
conduct a ``direct threat'' assessment is to ensure that carriers apply
reasonable standards to determine that the carriage of a passenger
would pose a direct threat to others before imposing travel
restrictions on or denying boarding of the passenger who wishes to
travel despite having contracted a communicable disease. Here, however,
the goal of the regulation is to ensure that carriers apply a
reasonableness standard to determine whether the assertion by the
passenger's treating medical professional of posing a direct threat is
sufficiently valid to warrant the issuance of travel credits or
vouchers to a passenger who wishes to postpone travel. Nonetheless, in
both regulations, the determination of ``direct threat'' is based on
the same set of objective, factual, and science-based standards that
looks into the nature of the communicable disease, the consequence of
the disease, the likelihood of disease transmission in the aircraft
cabin by casual contact. With respect to the term ``serious
communicable disease,'' as explained earlier in this document, the
definition of this term as adopted in this final rule is consistent
with that of Part 382.
---------------------------------------------------------------------------
\89\ 14 CFR 382.3.
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8. Supporting Documentation
The NPRM: The Department proposed to allow carriers and ticket
agents, as a condition for issuing travel credits or vouchers, to
require certain documentation dated within 30 days of the initial
departure date of the affected flight. For consumers stating an
inability to travel due to a government restriction or prohibition in
relation to a serious communicable disease, the Department proposed to
allow carriers to require the government order or other document
demonstrating how the consumer's ability to travel is restricted. The
Department explained that a quarantine isolation order or a border
closure notice or entry restriction issued by a government would all be
acceptable documents. The Department added that even a local stay at
home order that restricts local travel would be reasonable if it
impacts the passenger's entry or exit of the local vicinity through air
travel. For consumers stating that they are not traveling because they
have been advised by a medical professional or have self-determined
consistent with public health guidance not to travel by air to protect
themselves from a serious communicable disease, the Department proposed
to allow carriers to require the applicable guidance or a written
statement from a licensed medical professional attesting that it is the
medical professional's opinion that the consumers should not travel by
commercial air transportation to protect themselves. The Department
[[Page 32818]]
made clear that a general fear about traveling when there is a public
health emergency declared would not be sufficient to entitle that
passenger to a travel credit or voucher. For consumers stating that
they have been advised by a medical professional or self-determined
consistent with public health guidance not to travel because they have
or may have contracted a serious communicable disease that poses a
direct threat to the health of others, the Department proposed to allow
carriers to require the applicable guidance or a written statement from
a licensed medical professional attesting that it is the medical
professional's opinion that the consumer should not travel by
commercial air transportation to protect the health of others. Under
the proposal, the type of document that a carrier could require of
consumers seeking not to travel to protect themselves or others would
be dependent on whether the consumer was advised by a medical
professional or making a self-determination based on public health
guidance. To the extent that a passenger is providing a written
statement from a medical professional, the Department proposed to
permit airlines and ticket agents to request that the documentation be
current.
The Department asked whether the types of information that the
Department would allow airlines and ticket agents to seek from
passengers is adequate; whether there are ways to reduce or prevent
passengers from falsely claiming that they have a serious communicable
disease without airlines and ticket agents requesting documentation
from passengers about their health; whether the Department should
specify that the medical documentation explain the reason that the
passenger is more susceptible than others to contracting a serious
communicable disease during air travel and whether there are any
implications on privacy concerns; and whether the proposal that medical
documentation be dated within 30 days of the initial departure date is
reasonable and appropriate.
Comments Received: Several airline commenters were concerned about
the term ``medical professional,'' asserting that the term is too broad
and potentially invites fraud. Commenters stated that this issue is
analogous to the emotional support animal (ESA) situation under the
Department's Air Carrier Access Act rule prior to its revision in 2020,
which required carriers to accept ESAs as service animals provided that
passengers present medical documentation from a licensed mental health
professional. They further asserted that like the ESA regulation, the
proposed rule here allows unscrupulous passengers to take advantage of
the undefined term by seeking documentations from a broad range of
medical professionals who may have no knowledge about the relevant
information sought, or even purchasing documentations from online
sources without actual medical treatment or evaluation.
A4A commented that a more robust documentation scheme will reduce
the likelihood of travel credits being sought by ineligible passengers.
A4A suggested that similar to the 2020 service animal final rule,\90\
the Department should prescribe a government form that includes a
warning of the potential Federal criminal penalty under 18 U.S.C. 1001
for any person to knowingly or willfully make materially false or
fraudulent statements to obtain travel credits. A4A further suggested
that the form should be dated within 15 days of the departure and
should require certain information including the passenger's name, date
of birth, diagnosis, method of diagnosis, test result, information
regarding the medical professional (name, license information,
location, signature), a clear statement that the passenger should not
travel, a statement regarding when the passenger can travel again. IATA
supported A4A's suggestion that the medical documentation should
include a criminal penalty warning and that the documentation should be
dated within 15 days of departure. IATA further commented that it does
not see any privacy concerns on requiring medical attestation from
passengers because passengers are choosing to waive their rights to
privacy to avoid losing the money invested in the tickets. Allegiant
commented that the proposed documentation requirement creates
opportunities for abuse when passengers only need to present a doctor's
note stating that they may have a serious communicable disease.
Allegiant opined that this will become a refuge for passengers who want
to avoid paying ticket change fees.
---------------------------------------------------------------------------
\90\ Final Rule, Traveling by Air With Service Animals, 85 FR
79742, Dec. 10, 2020.
---------------------------------------------------------------------------
Air Canada expressed its concerns about the burden of carriers'
manually reviewing and assessing documentations, arguing that different
public health policies adopted by different countries and subjective
interpretations will create a complex and ever-changing set of rules
that would greatly interfere with carriers' ability to sell seats with
predictability. It further suggested that the Department should remove
all documentary evidence that requires a subjective assessment of a
passenger's condition or reason not to travel to avoid the burden and
costs to carriers associated with a manual review process.
A number of individual commenters also provided their views on the
proposed documentation requirement. One individual commenter
recommended that medical documentation should be required only when the
communicable disease is not demonstrable via a test result. Another
commenter stated that the ``medical professionals'' issuing the
documentation should include not only physicians, but also other
primary care providers such as nurse practitioners or physician's
assistants. In contrast, another individual opined that the proposal
failed to provide guidance regarding the types of medical professionals
who are qualified to issue the documentation, resulting in a broad
scope of the type of medical professionals that is untenable to
airlines. One individual commented that the scope of the types,
formats, and language of the proposed documentation requirement is
enormous, and verifying their authenticity will be burdensome, with a
high possibility of fraud. This commenter suggested that the Department
consider imposing stricter requirements to prevent abuse. Another
individual commenter expressed concerns about fraud and abuse and
argued that consumers should be required to provide a certification
from a registered medical professional or positive test result from a
professional third party (as opposed to a home test kit).
The Department also received comments from ticket agent
representatives on the issue of documentation. USTOA agreed with
airline commenters and argued that the Department should define the
scope of qualifying public health guidance and medical professionals to
ensure clarity on the required documentation. It further echoed
airlines' comments that the Department should prescribe the medical
form that includes a warning of Federal crime for false statements.
USTOA further commented that ticket agents should be able to require
that documentation be in English or in any other language of their
choice to avoid the cost of translation. Travel Management Coalition
stated that it should be entirely airlines' responsibility to require
health-related evidentiary documents and that ticket agents should not
be involved in determining whether passengers are
[[Page 32819]]
entitled to travel credits. In that regard, it offered that, to limit
the number of parties involved and to protect passenger privacy,
passengers should provide documentation directly to airlines even if
ticket agents are the merchants of record for the ticket sales.
The ACPAC discussed the issue of defining ``medical professional''
and recommended to the Department to replace the term ``medical
professional'' with the term ``treating physician,'' and adopt the
definition for ``treating physician'' as the following:
A ``treating physician'' means an individual who is licensed or
authorized under state law to engage in the practice of medicine or
the practice of osteopathic medicine and surgery, who furnishes a
consultation or treats a patient for a specific physical or mental
health condition, and who may use the results of a diagnostic test
in the management of the patient's specific physical or mental
health condition. For purposes of this rule alone, the term
``treating physician'' includes physicians, osteopaths, nurse
practitioners, social workers, licensed professional counselors,
psychiatrists, physician's assistants, and other medical providers
who are licensed in the state in which the treatment is or has been
provided and who are allowed, pursuant to state and federal
licensing regulations, to provide individualized care to the patient
without medical supervision by another medical provider.\91\
---------------------------------------------------------------------------
\91\ This definition, based on Michigan law and regulation of
Centers for Medicare & Medicaid Services, is provided by the State
Attorney General of Michigan, who is a member and chair of the
ACPAC. Two additional members representing consumer rights advocacy
groups and airports, respectively, support this recommendation. The
member representing A4A is against the recommendation, stating that
it includes practitioners such as social workers and psychiatrists
who would not be treating an infectious or communicable disease. The
member further reiterated that A4A's belief that ``treating
physician'' should be treating the person for the infectious disease
or serious communicable disease based on which the consumers are
seeking flight credit.
Public Hearing: DOT also addressed the topic of whether the
proposed documentation requirements (medical attestation and/or public
health guidance) are sufficient to prevent fraud in the notice
announcing the March 21, 2023, public hearing. In the notice, DOT asked
participants to provide information on whether medical attestations
currently provided to airlines from consumers seeking to cancel or
postpone travel are primarily based on consumers' self-assessments,
medical professionals' assessments, or a combination of both; the types
of medical professionals currently providing the attestations accepted
by airlines and ticket agents; the types of public health authority-
issued guidance currently affecting air travel; and airlines'
validation of medical attestations, including the procedures, the
volume, and the costs associated with the validation.
During the hearing, the representative from FlyersRights and the
representative from National Consumers League both spoke against
airlines' argument that the situation of passengers fraudulently
claiming a communicable disease is analogous to the situation where a
small percentage of passengers fraudulently obtain paperwork that
allows them to bring a pet animal onboard as an ESA. They stated that
in the matter regarding ESAs, airlines faced potential injury of losing
revenue for transporting the animals as a pet as well as potential
safety and health concerns. They pointed out that in contrast, there is
little incentive for consumers to engage in fraud here because the
appeal of fraud is to net a monetary gain and there is no monetary gain
in this instance when a consumer simply avoids a loss of the money that
they already paid by obtaining a travel credit or a voucher. They view
DOT's proposed requirement as sufficient and well-conceived and urge
the Department to disregard the industry petitioners' concerns, which
they believe rest on a flawed assumption that consumers will have such
an incentive to obtain travel credits under the proposal and that the
cost will outweigh public health and consumer protection benefits. The
consumer advocates argued that no rule will completely prevent fraud,
and instances of fraud should be investigated and punished.
A representative from A4A commented that the hearing request
initiated by the airline industry on this issue is broader than the
questions posed by the Department in the hearing notice. He commented
that the data sought by the Department in the hearing notice will not
answer the questions at hand. Specifically, he stated that both the
basis of current medical attestations provided to airlines by
consumers, and the types of medical professionals currently providing
such attestations have no bearing on the actual adequacy of the
documentation to prevent fraud under the proposed standards for credits
or refunds, especially when airlines' current standards differ from
those proposed. He further stated that U.S. airlines typically don't
provide credits or refunds when the passenger only may have a
communicable disease or when the consumer wants to protect him or
herself from a communicable disease. He noted that Part 382 requires
the medical professional to be, at least, the passenger's physician,
and even with that, the airline can require the passenger to undergo
specific review under certain circumstances. He also commented that the
types of guidance ``affecting air travel'' issued by public health
authorities currently has no bearing on whether providing such
information is adequate to prevent fraudulent claims. He opined that
what matters is the guidance related to communicable diseases and
whether, with no other information presented to the airline, simply
providing such guidance would allow the airline to determine whether
the consumer is making a fraudulent claim. He concluded that the
proposed documentation standard will only confuse consumers into
believing that they can submit unsubstantiated attestations or public
health guidance to support their claims.
A representative from MedAire, which provides medical advisory
services to airlines, stated that he was commenting strictly from a
medical standpoint and without considering the economic aspects around
the question. From that perspective, the MedAire medical expert stated
that a public health authority-issued criteria and guidelines in
concert with a properly trained medical professional to diagnosis and
to attest the presence of a transmissible disease is the ideal and the
best practice possible to minimize fraud and abuse to a manageable
level.
A representative from A4A commented that A4A's concerns regarding
the proposals go beyond fraud and asserted A4A's belief that the
proposal is impractical and unworkable and an example of regulatory
overreach by a transportation regulatory agency lacking expertise in
the area of public health. He offered that A4A members that currently
accept medical documentation in connection with passenger-initiated
itinerary changes typically require the documentation to be in the form
of a medical professional document issued by a treating physician, and
in cases where documentation from a non-treating physician is allowed,
the airlines would require the documentation to be on official
letterhead. He stated that the current level of fraud is low because
most airlines' policies would not contemplate allowing passengers to
self-certify their conditions or produce public health guidance without
accompanying statement by a treating physician.
On the Department's request for information regarding the types of
public health authorities that issue guidance affecting air travel, the
A4A representative stated that many airline
[[Page 32820]]
members do not routinely track this information because, in the current
environment, change and cancellation fees for most fare types have been
eliminated. He further identified various aspects of the NPRM that A4A
believes depend on factual issues that are genuinely in dispute. First,
he stated that DOT assumes in the NPRM that the medical professional
completing the attestation possesses sufficient knowledge of not only
the communicable disease but also the passenger's current condition. He
asserted that if this medical professional is not the passenger's
treating physician and has not examined the passenger, the reliability
of the documentation becomes highly questionable and the possibility of
fraud is heightened. Second, he stated that DOT's finding that the
required production of relevant public health guidance will reduce
fraud assumes such guidance will be given due to the person's
condition. He asserted that, for example, guidance recommending an
individual having been exposed to serious disease refrain from travel
for a set number of days would not prevent unscrupulous individuals who
have not had any exposure from misusing the guidance. Third, he stated
that the NPRM assumes that the guidance produced by the passenger will
be authentic, yet there's no provision in the draft rule text
addressing validation by airlines. Fourth, he commented that DOT's
implicit assumption is that airlines have the ability, if they so
choose, to confirm the authenticity of the documentation through
reasonable inquiry without external efforts. He offered that this is
not the case, for example, with public health guidance not widely
posted on a governmental website. Lastly, he disputed two claims made
in the NPRM. Regarding DOT's claim that the proposal will promote
public health by discouraging travel by persons who have contracted or
been exposed to a communicable disease, he commented that this is
highly questionable given that there's little to no correlation between
the non-expiring travel credit proposal and slowing communicable
disease spread, a point that A4A asserts the Department's own
regulatory impact analysis concedes. Regarding DOT's claim that it will
benefit consumers by protecting their financial interests and
expenditures made on tickets, he commented that any such benefit may be
eliminated by the proposal's longer-term impact on ticket pricing. He
elaborated that airlines will not be able to resell seats suddenly
returned to inventory because of passengers who have availed themselves
of the non-expiring travel option. He stated that to recoup their
losses and account for the longer-term liability of non-expiring travel
credit, airlines may have to increase fares, and, in some cases, that
means routes may be rendered uneconomical, potentially leading to
service cuts.
An economist from A4A spoke on data aggregated by A4A on
significant fraud associated with customers who claim that their pets
were ESAs, arguing that the topic of ESA is relevant to this hearing
because it demonstrates why carriers are concerned about the potential
fraud that will result from this rulemaking. He commented that the ESA
issue also demonstrated that fraud occurs when a regulation fails to
define or loosely defines terms and allows passengers to make
suggestive interpretations that carriers are prevented from disputing,
questioning, or validating. He stated that the ESA data clearly
demonstrates that fraud was extensive and substantial. According to the
speaker, from 2016 to 2019, the number of ESAs traveled had more than
doubled, skyrocketing from 540,000 in 2016 to 1.13 million in 2019. He
stated that DOT ultimately changed the definition of a service animal
to exclude ESAs. He commented that this rulemaking similarly creates
new, ambiguous, and inconsistent standards, including medical related
standards unknown to Federal health agencies regarding ``serious
communicable disease.'' Next, he commented that U.S. airlines have been
and remain responsive to refund requests and frequently exceed DOT
recommendations regarding consumer protections. He provided that the
annual cash refunds in 2021 and 2022 exceeded pre-pandemic 2019 level
and in 2022, the 11 largest U.S. carriers issued $11.2 billion in
refunds. He noted that DOT received less than one complaint about
refunds for every 100,000 passengers. He concluded his presentation by
stating that there is no evidence of a market failure or unfair or
deceptive practice in this area.
DOT Responses: The Department is continuing to allow airlines, as a
condition for issuing travel credits or vouchers, to require certain
documentation. This final rule differs from the proposal in that it
allows airlines to require current medical documentation from consumers
as evidence that they are not traveling to protect themselves or others
from a serious communicable disease. Airlines are not required to
accept consumers' self-diagnoses that they contracted or may have
contracted a serious communicable disease ``consistent with'' public
health guidance and providing the applicable guidance as proposed. An
airline's ability to require medical documentation from a passenger
under these circumstances is conditioned on the absence of a public
health directive or order issued by HHS stating that requiring medical
documentation is not in the public interest. For consumers stating an
inability to travel due to a government restriction or prohibition in
relation to a serious communicable disease, the Department has not
changed the documentation allowed from what was proposed at the NPRM
stage but specifies that the documentation must be current. This final
rule permits carriers to require passengers provide a current
government order or other document demonstrating how the consumer's
ability to travel is restricted. A government order is current if it is
valid for the planned travel date.
After carefully reviewing the comments provided, as well as the
ACPAC recommendation, the Department has decided to specify that the
medical documentation must be from a licensed treating medical
professional and define that term. The Department is adopting a
definition for ``licensed treating medical professional,'' to mean an
individual, including a physician, a nurse practitioner, a physician's
assistant, or other medical provider, who is licensed or authorized
under the law of a State or territory in the United States or a
comparable jurisdiction in another country to engage in the practice of
medicine, to diagnose or treat a patient for a specific physical health
condition that is the reason for the passenger to request a travel
credit or voucher. The Department believes that limiting the medical
professionals to those who provide or have recently provided diagnoses
or treatment to passengers for the specific health condition that is
the reason for requesting the travel credits or vouchers will better
ensure passengers do not rely on persons who have no medical knowledge
about their health conditions. The Department notes that the licensed
treating medical professional may provide in-person medical diagnosis
and treatment as well as virtual diagnosis and treatment, as deemed
appropriate by common medical practice. The Department also notes that
treating medical professionals may include a primary care provider or a
specialist that treats the passenger on a regular basis, as well as
medical professionals that the passenger sees on an ad hoc basis, such
as care providers
[[Page 32821]]
from a walk-in clinic, an emergency care facility, or a medical
facility that the passenger visits while away from home.
Regarding the treating medical professional's license, the
definition requires that the medical professional be licensed in a
State or territory of the United States or a comparable jurisdiction in
another country. In that regard, the rule allows carriers to require
that the documentation be on the medical professional's letterhead and
include information on the type and date of the medical professional's
license, the license number, and the state or other jurisdiction in
which it was issued. The Department interprets ``comparable
jurisdiction in another country'' to mean the appropriate governing
body in a foreign country that oversees the issuance of medical
licenses, either at a national or state level.
For medical documentation provided by passengers who seek travel
credits or vouchers due to an underlying health condition, the rule
allows carriers to require that the medical documentation be current,
specify that the passenger has an underlying health condition that is
being treated or has recently been treated by the medical professional,
and that based on the licensed treating medical professional's opinion,
including references to relevant public health guidance if available
and applicable, the passenger should not travel on a commercial flight
during a public health emergency to protect his or her own health. To
protect passengers' privacy, carriers may not insist that the
documentation specify what the underlying health condition is. Further,
because this medical documentation specifically concerns the
passenger's planned travel during a public health emergency, to ensure
that the medical documentation is ``current'' with respect to the
passenger's medical condition, carriers may require that it be dated
after the declaration of the public health emergency but be within one
year of the scheduled travel date.
For medical documentation provided by passengers seeking travel
credits or vouchers because the passenger has contracted or is likely
to have contracted a serious communicable disease, the rule allows
carriers to require that the documentation be current, specify that the
medical professional has recently diagnosed and/or provided medical
care to the passenger with regard to a serious communicable disease,
and be based on the licensed treating medical professional's opinion,
including reference to relevant public health guidance if available and
applicable, that the passenger has contracted or is likely to have
contracted a serious communicable disease and should not travel on
commercial flights to protect the health of others on the flights. The
carriers may further require the medical documentation provide a
medically reasonable timeframe during which the passenger is advised
against travel. The purpose of the medical documentation under this
rule is to attest that it is the medical professional's opinion, based
on current medical knowledge about the serious communicable disease at
issue and the passenger's current health condition, that the passenger
should not travel to protect others from that serious communicable
disease. This rule allows carriers to apply a reasonable standard to
determine whether medical documentation is current. For example, if
according to public health guidance on a particular communicable
disease, an individual would normally remain contagious for 15 days
from the date of diagnose or onset symptom, it would be reasonable for
carriers to interpret that ``current'' medical documentation means the
documentation is dated within 15 days of the scheduled departure. The
Department believes that this flexibility serves the public interest by
allowing carriers to tailor the medical documentation's validity period
based on objective and scientific information, i.e., the common
contagious period of a particular communicable disease, therefore
screening out passengers who would generally have passed the contagious
period on the travel date while ensuring that passengers who are likely
to pose a direct threat during travel will not be unduly burdened to
seek medical documentation very close to the travel date.
In addition to addressing the date of the supporting documentations
that must be ``current,'' the Department has considered the timing of
passengers providing the current documentation to airlines when
requesting a travel credit or vouchers. Although it is conceivable that
passengers requesting travel credits or vouchers based on a government
travel restriction would have the ability to provide the documentation
right away because the government orders are readily available to the
public, passengers requesting travel credits or vouchers based on a
health condition may need additional time to schedule a visit with a
medical professional and obtain the documentation. The Department is
concerned that the rule would not effectively protect consumers as
intended if airlines are permitted to require that the medical
documentation must be provided before the planned travel date. For
example, if a public health emergency was declared right before a
passenger's travel date, and the passenger has an underlying health
condition that would put the passenger at risk during travel, the
passenger would be deprived the required credit or voucher because
there is no time to obtain a medical documentation before the travel
date. Further, passengers could be infected with a serious communicable
disease very close to the travel date but there is not enough time to
seek an appointment with a treating medical professional and obtain a
medical documentation before the scheduled travel date. In such
situations, the final rule requires that carriers allow a reasonable
time for the passenger to provide relevant medical documentation after
the scheduled travel date as long as the passenger notifies the carrier
before the flight's departure about the illness. The carrier may wait
to issue the travel credit or voucher until receiving current medical
documentation within that time period. The Department notes that,
although the medical documentation may be dated after the scheduled
travel date, carriers may require that the documentation specify that
based on the licensed treating medical professional's opinion,
including reference to relevant public health guidance if available and
applicable, the passenger has contracted or is likely to have
contracted a serious communicable disease and should not travel by air
on the scheduled travel date to protect the health of others on the
flight. The Department believes that requiring airlines to provide a
reasonable time for passengers who suffer acute illness close to travel
dates to submit medical documentation allows passengers to seek medical
diagnoses and obtain written documentation to prove their eligibility
for travel credits or vouchers and avoid the situation that passengers
choose to travel while feeling ill for fear of losing the money paid
for the tickets, potentially endangering others on the flight.
The Department has also decided against creating a Federal medical
form that includes a criminal penalty warning for false statements, as
some carriers and ticket agents have suggested. We do not agree that a
DOT form is the best format to incorporate all the information
permitted by the rule. Each passenger's health condition (including the
underlying heath condition increasing their risk level while traveling
during a public health emergency or their personal medical history of a
serious communicable
[[Page 32822]]
disease infection) may be different, which warrants more flexibilities
for medical professionals to customize content in the medical
documentations that they prepare. The Department has also taken into
account consumer rights advocacy groups' view that consumers in
situations discussed here may be less likely to commit fraud or abuse
the regulatory protection in comparison to situations related to ESAs
as suggested by carriers because consumers requesting travel credits or
vouchers due to a serious communicable disease have already paid
airlines for their travel and the potential net gain of abusing the
consumer protection requirement is simply avoiding paying a ticket
change fee. The Department also agrees with consumer rights advocacy
groups that airlines have effective tools to investigate and pursue
punitive actions against serial offenders who repeatedly engage in
fraudulent actions to receive travel credits or vouchers, including
banning the individual from traveling on their flights. In conclusion,
the Department is confident that the criteria for the documentations
listed in the rule that carriers may request and carriers' own
deterrence tools would place adequate safeguards against fraud and
abuse.
9. Travel Credits or Voucher
The NPRM: In the NPRM, the Department addressed various issues
regarding the travel credits and vouchers to be provided to passengers
due to government restrictions or health concerns related to a serious
communicable disease. These issues concern: (1) the appropriate
validity period of the credits or vouchers provided to consumers,
including whether an indefinite validity period for credits or vouchers
issued under this proposal is reasonable (2) the transferability of the
travel credits or vouchers to others; (3) the value of the travel
credits or vouchers, including establishing a minimum value of equal to
or greater than the airfare and allowing a deduction from the credit or
voucher for service charges by ticket agents when issuing the original
ticket and credit/voucher processing fees by airlines and ticket
agents; and (4) the disclosure of any material restrictions,
limitations, or conditions on the use of the credits and vouchers. More
specifically, the Department proposed to require airlines and ticket
agents provide covered passengers non-expiring credits or vouchers for
future travel and invited comment on requiring that the travel credits
or vouchers be transferrable at the consumers' discretion. The
Department also proposed that the travel credits or vouchers issued to
these consumers be ``a value equal to or greater than the fare
(including government-imposed taxes and fees and carrier-imposed fees
and surcharges).'' Further, the Department proposed to allow airlines
and ticket agents to charge a processing fee for the issuance of
credits or vouchers and sought comment on whether allowing ticket
agents to retain the service fees charged when issuing the original
ticket is reasonable and appropriate.
(1) Validity Period and Transferability
The Department proposed to require that airlines and ticket agents
provide non-expiring credits or vouchers for future travel to
qualifying consumers. The Department sought comments on whether an
indefinite validity period for credits or vouchers issued under this
proposal is reasonable, and if not, why and what a reasonable minimum
validity period should be. Commenters were encouraged to provide
information on what challenges airlines and ticket agents may face when
accommodating the redemptions of travel credits and vouchers that have
no expiration dates. Also, the Department sought comments on whether it
should require that the travel credit or voucher be transferrable at
the consumers' discretion. The Department explained that
transferability would ensure that eligible consumers who spent money on
tickets that they no longer need wouldn't completely lose the value of
the tickets.
(2) Value of Tickets and Processing Fees To Issue Travel Credits and
Vouchers
The Department proposed that the travel credits or vouchers issued
to qualified consumers be ``a value equal to or greater than the fare
(including government-imposed taxes and fees and carrier-imposed fees
and surcharges).'' The Department also proposed that the credits or
vouchers include any prepayment of unused ancillary services such as
baggage fees or seat selection fees as those services have not been
provided by the carrier.\92\ The Department asked whether airlines
should be required to offer an option to consumers in which consumers
may choose to receive the travel credit or voucher redeemable for the
same itinerary as the original ticket, regardless of what the ticket
cost is at the time of redemption, noting that as airfare fluctuates,
some consumers may benefit from and prefer this option if they plan to
travel on the same itinerary in the future without worrying about price
increases, while airlines may benefit when the redeemed tickets are
priced less than the original purchase price of the ticket.
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\92\ The Department's rulemaking on Refunding Fees for Delayed
Checked Bags and Ancillary Services That Are Not Provided proposes
that airlines must refund any ancillary service fees when a
passenger traveled on the scheduled or an alternative flight and the
service was not provided. See 81 FR 75347. That proposal is
discussed and finalized in Section III of this rule.
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Based on the Department's view that neither the airline or ticket
agent initiated the communicable disease-related change that is
resulting in the need for a credit or voucher, we proposed to allow
airlines and ticket agents to charge a processing fee for the issuance
of credits or vouchers to non-refundable ticket holders when consumers'
travel plans are affected by concerns related to a serious communicable
disease, provided that the fee is on a per passenger basis and
appropriate disclosures were made to the consumer prior to the consumer
purchasing the airline tickets. The Department sought comments on
whether it is reasonable to permit airlines and ticket agents to charge
a processing fee for the issuance of travel credits or vouchers, and if
so, what type and manner of disclosure would be sufficient to avoid
consumer confusion for fees applicable for these specific
circumstances.
(3) Restrictions and Disclosures
The Department proposed to prohibit conditions, limitations, and
restrictions imposed on the credits and vouchers that are unreasonable
and would materially reduce the value of the credits and vouchers to
consumers as compared to the original purchase prices of the airline
tickets. The Department provided a list of examples that would be
deemed unreasonable under the proposal. These examples included a
credit or voucher that: would severely restrict bookings with respect
to travel date, time, or routes; can only be used on one booking and
voids any residual value; or would impose a booking fee for a new
ticket that reduces the value of the voucher or credit available to be
used on the new ticket. With regard to material restrictions,
limitation, and conditions on the use of the credits and vouchers that
are not deemed unreasonable, the Department proposed to require
airlines and ticket agents provide full disclosure. The Department
sought comments on whether regulating the terms and conditions of the
credits or voucher in this specific context is reasonable and what
other steps the Department should consider ensuring that passengers
[[Page 32823]]
receiving credits and vouchers for future travel are adequately
protected.
Comments Received: The Department received comments on these issues
from airlines, ticket agents, and consumer rights advocates with the
validity period for the travel credits and vouchers being the most
controversial.
(1) Validity Period and Transferability
A4A expressed strong concerns about the proposal requiring that the
credits or vouchers be non-expiring, arguing that such requirement
would lead to rampant fraud and abuse, exposing carriers to significant
financial and accounting liabilities. A4A commented that the
requirement would (1) impose financial hardship on carriers by building
up significant liability on their accounting books that materially harm
credit ratings; (2) impose administrative costs to carriers by
requiring permanent record retention and data access on ticket and
voucher records; (3) cause technical issues to distribution systems as
those systems need an expiration date populated to function; (4) raise
tax issues because airlines have to absorb taxes remitted to
governments that cannot be refunded and repurposed if consumers elect
to not travel within a reasonably short timeframe; and (5) raise legal
compliance issues under State escheat laws, if they are not preempted
by the Department's authority. For these reasons, A4A recommended that
the Department should not mandate the validity period of credits or
vouchers longer than one year, and if the credits or vouchers are
issued during a public health emergency and that emergency lasts beyond
one year, the Department would require that the airlines extend the
validity period by one year at a time. A4A's position was supported by
IATA, RAA, Spirit, Qatar Airways, and SATA. These commenters also were
against requiring the travel credits or vouchers be transferable,
arguing that it would create a second-hand market that could lead to
fraud.
The ACPAC discussed this issue and voted to recommend that the
final rule require the travel credits or vouchers be non-expiring and
transferrable.\93\ Travelers United also supported the proposal to
require the credits or vouchers to be non-expiring, stating that they
should be treated as a store credit with no restrictions on booking and
transferability. It further argued that the current airline credit
rules are different from airline to airline and the Department should
adopt a uniform and clear rule for credits and vouchers.
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\93\ Three members representing consumer rights advocacy groups,
State Attorneys General, and airports, respectively, voted for the
recommendation. The member representing A4A voted against the
recommendation, stating that the issue of transferability has not
been analyzed and that requiring transferrable credits may result in
fraud and abuse.
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Most ticket agent representatives, including Travel Management
Coalition, ABTA, USTOA, and Travel Tech, opposed requiring credits or
vouchers be non-expiring. They argued that the non-expiring requirement
creates uncertainties and long-term liability for airlines and ticket
agents and unreasonable administrative and reporting burdens to them.
DWHSA, on the other hand, supported the proposal to require credits or
vouchers be non-expiring, arguing that if some airlines are currently
offering non-expiring credits, all airlines should be able to do so.
(2) Value of Tickets and Processing Fees To Issue Travel Credits and
Vouchers
On the value of the credits or vouchers, A4A commented that the
Department should allow airlines to adjust the amount to reflect non-
refundable foreign taxes. Several airline commenters expressed their
support for the proposal to allow airlines and ticket agents to charge
a service fee for the issuance of the credits or vouchers, and some
commenters also support the disclosure requirement in relation to the
service charge. On booking restrictions, A4A opined that DOT should not
regulate specific terms and conditions of the credits or vouchers.
Qatar Airways suggested that clarity is needed on the term ``severe
restriction.'' A4A and IATA commented that the Department should let
the market determine whether the credits or vouchers can be used for
booking with one carrier or others. Qatar Airways, on the other hand,
stated that the credits or vouchers should only be redeemed with the
issuing airline.
Travelers United commented that all credits or vouchers issued
under the proposals should be uniform and clear to passengers and the
Department should ensure that any residual values after one booking be
available to consumers. It further stated that the only limitation on
the credits or vouchers should be that they must be used on the issuing
airline. Travelers United also provided examples of existing
restrictions that it believes to be unreasonable, including the
requirement that the credits or vouchers cannot be used to pay
ancillary service fees and the requirement that the credits or vouchers
issued for a business class ticket can only be used to book another
business class ticket.
As for processing fees, IATA, Spirit, AAPA, and Qatar Airways
supported the proposal to allow airlines and ticket agents to charge a
processing fee for issuing credits or vouchers. Several ticket agent
representatives also supported the proposal. Two individual consumers
commented that if airlines are allowed to charge a processing fee,
there should be a cap or clearly defined limit to these fees. This
individual opined that if airlines are given too much leeway to
determine the amount of the fee, consumers may end up paying the fee
that is the majority of the cost. Another individual commented that
allowing airlines to charge a processing fee for vouchers would result
in airlines charging a high fee, removing the consumer protection
provided by the rule. Another individual commented that it is
inconsistent for the Department to propose that the credits or vouchers
be ``a value equal to or greater than the fare'' yet allow airlines to
charge a processing fee.
(3) Restrictions and Disclosures
On booking restrictions, A4A opined that DOT should not regulate
specific terms and conditions of the credits or vouchers. Qatar Airways
suggested that clarity is needed on the term ``severe restriction.''
A4A and IATA commented that the Department should let the market
determine whether the credits or vouchers can be used for booking with
one carrier or others. Qatar Airways, on the other hand, stated that
the credits or vouchers should only be redeemed with the issuing
airline.
Travelers United commented that all credits or vouchers issued
under the proposals should be uniform and clear to passengers and the
Department should ensure that any residual values after one booking be
available to consumers. It further stated that the only limitation on
the credits or vouchers should be that they must be used on the issuing
airline. Travelers United also provided examples of existing
restrictions that it believed to be unreasonable, including the
requirement that the credits or vouchers cannot be used to pay
ancillary service fees and the requirement that the credits or vouchers
issued for a business class ticket can only be used to book another
business class ticket.
ABTA opposed imposing a blanket requirement on what restrictions
are permissible for the credits or vouchers, stating that these
decisions should be made by each business on a case-by-case basis.
USTOA also commented that the Department should not dictate the
contractual terms of credits or vouchers.
DOT Responses:
[[Page 32824]]
(1) Validity Period and Transferability
The Department has considered airlines' arguments against requiring
non-expiring travel credits and vouchers and is convinced that although
the non-expiring feature would provide consumers the maximum
flexibility to use the credits or vouchers, the difficulty for airlines
to manage and track these technically perpetual liabilities is not
trivial. The Department, however, disagrees with airlines' suggestion
that a one-year validity period is adequate to ensure that consumers
have sufficient time to use the credits and vouchers. Although airlines
suggest that the one-year period can be extended if a public health
emergency extends beyond a year, the Department believes that the
extension of travel credits or vouchers imposes administrative burdens
to airlines and potential confusion and uncertainty to consumers. As
such, we are adopting a final rule requiring that the travel credits or
vouchers issued under the conditions related to a serious communicable
disease be valid for at least five years from the date of the issuance.
The Department views a five-year validity period to be a sufficient
timeframe to ensure passengers who are affected by a serious
communicable disease can use the credits or vouchers for future travel
while not imposing undue burdens on airlines. The Department also notes
that the five-year validity period is consistent with the Credit Card
Accountability Responsibility and Disclosure Act of 2009 (CARD Act)
\94\ and the CFPB regulation implementing the CARD Act, 12 CFR 1005.20,
which require that the expiration date of a store gift card or gift
certificate cannot be earlier than 5 years after the date on which the
gift certificate was issued. Although the travel credits or vouchers
issued pursuant to this final rule are not ``gift certificates'' or
``store gift cards'' that are subject to the CARD Act and the CFPB
rule,\95\ the Department views that adopting a similar restriction on
the validity period as the CARD Act and its implementing rule benefits
consumers by avoiding potential confusions arising from different
regulatory entities' regulations on electronic financial documents
issued by businesses.
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\94\ Public Law 111-24, May 22, 2009.
\95\ The CARD Act and the CFPB implementing rule definitions for
``gift certificate'' and ``store gift card'' require that the
instruments must be purchased or issued ``on a prepaid basis'' ``in
exchange for payment.'' As the travel credits or vouchers under this
final rule are not purchased or issued on a prepaid basis in
exchange for payment, they are not considered ``gift certificate''
or ``store gift card'' that are subject to the CARD Act and the CFPB
rule in 12 CFR 1005.20.
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Further, the Department is requiring that the credits or vouchers
issued under this final rule be transferrable to address concerns from
numerous consumers regarding the situations relating to a serious
communicable disease that make them unable able to use the travel
credit or voucher due to their age, health condition, or other reasons.
For example, in complaints received by the Department during the COVID-
19 pandemic, some elderly passengers with a severe underlying health
condition expressed that given their ages and the medical conditions
they have, air travel will not be an activity that they would consider
in the future even with the COVID-19 public health emergency coming to
an end. Also, infrequent travelers who booked travel for a specific
event that was canceled due to a serious communicable disease expressed
concerns that they have no use for the credits or vouchers because they
are not likely to have the need to travel in the foreseeable future.
The Department views these concerns as reasonable grounds for requiring
the travel credits or vouchers be transferrable so the air
transportation that these consumers invested their money in can be
utilized by others of their choosing before expiring.
The Department is not convinced by the airlines' arguments that
transferability will invite and increase fraud. The initial issuance of
the credits and vouchers under this rule are subject to conditions
airlines are permitted to impose, including documentation proof for
eligibility. Once they are issued to eligible consumers, whether the
eligible consumers choose to redeem the credits or vouchers on their
own or transfer to another individual would not make a difference to
the airlines financially. We are also not troubled by a secondary
market made possible by the transferability feature of the credits or
vouchers in which consumers who obtained the credits or vouchers on
legitimate grounds can trade them with other consumers in order to
recoup the value, or the partial value, they paid into the airline
tickets. To comply with the transferability requirement, airlines may
simply eliminate the requirement that only the passengers in the
original bookings may use the credits or vouchers, similar to a store
gift card that can be redeemed by anyone.
(2) Value of Credits and Vouchers and Service Fee for Processing
Credits and Vouchers
The Department is adopting the proposal to require airlines to
issue credits or vouchers in a value equal to or greater than the fare,
including carrier-imposed fees and surcharges and government-imposed
taxes and fees that are not refunded to consumers. To the extent other
Federal agencies require airlines to refund certain government-imposed
fees to consumers when the air transportation is not used by
consumers,\96\ carriers may deduct the amounts of those fees that have
been refunded to consumers from the value of the travel credits or
vouchers. With regard to prepaid ancillary service fees, the Department
notes that the situation discussed here is distinguishable from the
situations in which airlines are required to refund ancillary service
fees for services that are not provided. In the situations here, the
passenger chooses not to travel, and as a result, the pre-paid
ancillary services are not used. As such, the Department is not
requiring airlines to refund the ancillary service fees in the form of
the original payment, and instead, we are requiring that the value of
the ancillary service fees be included in the value of travel credits
or vouchers issued.
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\96\ See, e.g., the Transportation Security Administration's
regulation provides that any changes by the passenger to the
itinerary are subject to additional collection or refund of the
September 11th Security service fee by the direct air carrier or
foreign air carrier, as appropriate. 49 CFR 1510.9(b).
---------------------------------------------------------------------------
Based on the comments received, the Department is adopting the
proposal to allow airlines to impose a processing fee for issuing
travel credits or vouchers to eligible passengers, provided that the
fee is assessed on a per-passenger basis and appropriate disclosures
regarding the existence and amount of the fee were made to the consumer
prior to the consumer purchasing the airline ticket. Given that the
airline is not initiating the change that is resulting in the need for
a credit or voucher, the Department believes that this strikes the
right balance between ensuring that consumers receive travel credits
and vouchers when they do not travel because of government restrictions
or health concerns related to a serious communicable disease and
avoiding having airlines bear all the cost for something that was also
outside their control. If the Department determines that airlines'
processing fees appear to circumvent the intent behind the requirement
for consumers to obtain credits or vouchers in equal or greater value
as the fare, the Department will consider whether further action is
appropriate.
(3) Restrictions and Disclosures
With respect to limitations, restrictions, and conditions on the
[[Page 32825]]
credits or vouchers issued under this section, the Department is
adopting the proposed prohibition on unreasonable terms that would
materially reduce the value of the credits and vouchers to consumers as
compared to the original purchase prices of the airline tickets. The
Department confirms its tentative view stated in the NPRM that
unreasonable terms include severe restrictions on travel date, time, or
routes, a requirement that a voucher can only be used on one booking
and that any residual value would be void afterwards, a restriction
that the voucher can only be used to cover the base fare of a new
booking and not taxes and fees or ancillary service fees, a requirement
that redeeming the credits or vouchers would be subject to a rebooking
fee or a change fee \97\ that reduces the value of the voucher or
credit applicable to the new ticket, or a restriction limiting the
rebooking to certain class(es) of fares such as business class or first
class. A restriction on the travel date, time, or routes is severe when
the restriction eliminates a substantial number of choices passenger
may have for rebooking and is a case-by-case analysis. A restriction on
what airline(s) the credit or voucher can be used to book with, on the
other hand, would not be viewed as unreasonable as long as the credit
or voucher allows, at a minimum, rebooking on the airline for the
original ticket. Further, for material restrictions, limitation, and
conditions on the use of the credits and vouchers that are not deemed
unreasonable, the final rule require airlines provide clear disclosure
to consumers at the time of issuing credits or vouchers.
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\97\ The NPRM's proposed rule text suggests that carriers may
charge an ``administrative fee'' for rebooking tickets using the
credits or vouchers. After further consideration, especially
considering that the rule allows carriers to charge a processing fee
for issuing the credits or vouchers, the Department believes that it
is unreasonable for consumers to be charged again when redeeming the
credits or vouchers. Therefore, the final rule determines that
charging an administrative fee at the time of rebooking is an
unreasonable condition.
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10. Consumer Rights After Acceptance of Travel Vouchers and Credits
The NPRM: The Department described its tentative view that if an
airline cancels or makes a significant change to a flight after a
passenger has already requested to cancel his or her flight due to
government restrictions or health concerns and received a credit or
voucher, then the airline or ticket agent should not be required to
replace that voucher with a refund. The Department stated that it is
overly burdensome and costly for airlines to apply refund eligibility
to itineraries that have already been cancelled pursuant to passengers'
requests prior to the airline's decision to cancel or significantly
change the flight. The Department cautioned that its Office of Aviation
Consumer Protection has the authority to investigate whether an airline
or a ticket agent has engaged in an unfair or deceptive practice when
it fails to inform a passenger making a request to cancel the itinerary
that the passenger is eligible for a refund, if the airline or ticket
agents knows or should have known at the time that a flight has been
cancelled or significantly changed.
Comments Received: IATA supported the Department's view that if an
airline cancels or makes a significant change to a flight after a
passenger has already requested to cancel his or her a travel itinerary
and received a credit or voucher, then the airline or ticket agent
should not be required to replace that voucher with a refund.
DOT Response: The Department maintains its view that an airline or
ticket agent should not be required to replace a voucher with a refund
when an airline cancels or makes a significant change to a flight after
a passenger has already requested to cancel his or her flight due to
government restrictions or health concerns and received a credit or
voucher.
V. Contract of Carriage Provisions Must Not Contradict Requirements of
This Final Rule
The Ticket Refund NPRM proposed to include in the new 14 CFR part
260 a provision that would require airlines to ensure that the terms or
conditions in their contracts of carriage are consistent with the
proposed regulation, including the proposals pertaining to airline
ticket refunds due to airline-initiated cancellation or significant
change, and the proposals pertaining to refunds of baggage fees for
significantly delayed bags and refunds of ancillary service fees for
services that are not provided. In response to this proposal, Travelers
United urged the Department to require airlines to incorporate their
customer service plans in their contract of carriage. Several
individual commenters noted that the language that airlines use in
their contract of carriage restrict the rights of passengers. In this
final rule, the Department makes clear that carriers' inclusion of
terms and conditions in their contract of carriage that are
inconsistent with the carriers' obligations to provide refunds as
specified in this rule will be considered an unfair and deceptive
practice. In addition, the Department prohibits carriers' inclusion of
terms and conditions in their contract of carriage that are
inconsistent with the carriers' obligations to provide travel credits
or vouchers to travelers affected by a serious communicable disease as
required by this final rule. Reasonable consumers would be misled with
inaccurate information in airlines' contract of carriage regarding
their right to a refund, travel credits, vouchers, or other
compensation. This information is material to consumers as it could
result in significant financial loss because consumers would
incorrectly believe that they cannot obtain refunds, travel credits, or
vouchers that they are entitled to receive under DOT rules. The
Department has long considered airlines with terms and conditions in
their contract of carriage that are inconsistent with requirements
imposed on them to be engaging in an unfair and deceptive practice. The
Department is not requiring carriers to include their customer service
plans in their contracts of carriage as suggested by Traveler's United
but will monitor consumer complaints in this area and determine if we
need to revisit this issue in the future.
VI. Refunding Airline Tickets to Passengers Affected by a Serious
Communicable Disease Due to Airlines or Ticket Agents Receiving
Significant Government Financial Assistance
To address the concerns by consumers, consumer advocacy groups,\98\
and members of Congress \99\ that it is fundamentally unfair for
airlines receiving government financial assistances during the COVID-19
to refuse to provide refunds to consumers who were not able to travel
due to the COVID-19 pandemic, the Department proposed that if a covered
airline or ticket agent receives significant government financial
assistance during a public health emergency, the airline or ticket
agent would be required to provide refunds to consumers who are
otherwise eligible for travel credits or vouchers under the NPRM. The
Department further proposed a set of procedures to determine whether a
covered entity has received ``significant government financial
assistance,'' which
[[Page 32826]]
includes: applying relevant factors such as the size of the entity,
revenue, the amount of government financial assistance accepted, and
total enplanements to the entities; issuing tentative determinations on
which entities have received significant government assistance; and
finalizing the determinations based on public comments.
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\98\ See, e.g., Airlines: Give Us Refunds, Not Vouchers,
petition by Consumer Reports, https://action.consumerreports.org/20200420_finance_airlinerefundpetition. Consumer Reports, Letter to
Sect. Buttigieg, https://advocacy.consumerreports.org/wp-content/uploads/2021/11/CR-letter-to-Sec-Buttigieg-consumer-complaints-11-18-21-FINAL-2.pdf.
\99\ See, e.g., Senator Edward J, Markey and Richard Blumenthal
press release, https://www.markey.senate.gov/news/press-releases/senators-markey-and-blumenthal-blast-airlines-inadequate-response-to-their-request-to-eliminate-expiration-dates-for-all-pandemic-related-flight-credits.
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The Department received numerous comments from airline and ticket
agent representatives, expressing their concerns about the Department's
authorities for this proposal as well the practicality of the proposed
procedure to determine which entity has received ``significant
government financial assistance.'' Consumers and their representatives
supported this requirement but did not articulate the reason(s) for
their support of this proposal. Although the Department continues to
view that airlines and ticket agents receiving significant financial
assistance from governments during a public health emergency should do
more to assist airline passengers who are impacted by the public health
emergency, we have concluded that more time is needed to consider the
information provided to the Department and to determine whether
additional information is needed for a final rule that is beneficial to
consumers. As such, we are deferring whether to finalize this proposal
to another rulemaking action.
VII. Effective Date and Compliance Periods
The NPRM: The Ticket Refund NPRM proposed that any final rule
adopted would take effect 90 days after the publication in the Federal
Register. The Department invited comments on whether 90 days is the
appropriate interval for implementation of the proposed requirements if
adopted. The Ancillary Fee Refund NPRM did not propose an effective
date for provisions finalized under that NPRM.
Comments Received: On the Ticket Refund NPRM, a number of airline
commenters asserted that the proposed 90-day implementation timeframe
is inadequate, reasoning that airlines need additional time to revise
refund policies regarding when a passenger is entitled to a refund and
to train their staff. They also commented that additional time is
needed to adjust IT systems to reflect how vouchers should be granted.
Some airlines suggested that a 180-day implementation period is
warranted while others argued that an implementation period of no
shorter than one year should be granted. ASTA also asserted that ticket
agents will need additional time to assess how a final rule would
impact them and decide whether they want to continue to sell airline
tickets as merchants of record and make necessary adjustments
accordingly. ASTA further requested that the Department clarify how it
interprets the application of the rule's effective date with respect to
ticket sale date, travel date, and the date a refund request is
submitted.
On the Ancillary Fee Refund NPRM, the NPRM did not propose an
implementation period. A4A and IATA in their comments requested that
the Department provide one-year for airlines to implement the
requirements relating to refunding baggage fees for delayed bags and
ancillary service fees for services not provided. A4A specified that if
the Department requires ``automatic'' refunds for baggage fees,
carriers will need significant amount of time to work with distribution
channel stakeholders to build, test, and implement new payment and
refund channels beyond airfare. IATA also commented that additional
time is needed due to the complexity of airline systems and procedure
and the potential involvement of multiple airlines and distribution
channels. The ACPAC recommended that all final provisions of the final
rule be effective after 90 days of its publication in the Federal
Register.\100\
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\100\ The three members representing consumer rights advocacy
groups, State Attorneys General, and airports support this
recommendation. The member representing A4A opposes this
recommendation, stating that some of the provisions, if finalized,
will require airlines to make significant changes and the 90-day
implementation period is not adequate to implement those changes.
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DOT Responses: The Department has considered the comments and
determined that an extended implementation period for certain
provisions is warranted. First and foremost, although this final rule
will become effective 60 days after its publication in the Federal
Register, carriers and ticket agents will have different implementation
periods for different provisions. For provisions regarding ticket
refunds due to airline cancellation or significant change, refunds of
baggage fees for significantly delayed bags, and refunds of ancillary
service fees when services are not provided, regulated entities will
have six months from the date of publication of the final rule, or
October 28, 2024, to implement the relevant requirements. The
Department views the six-month implementation period as appropriate for
airlines and ticket agents to modify their policies, procedures and IT
systems and to train staff on the relevant requirements on ticket and
ancillary fee refunds (including refunding fees for significantly
delayed checked bags). The Department considers the six months
compliance period to be necessary for carriers and ticket agents to
establish or enhance processes and procedures to communicate with one
another to comply with these requirements.
For the provision regarding issuing travel credits or vouchers to
passengers who are affected by a serious communicable disease, carriers
will have 12 months from the date of the final rule's Federal Register
publication, or April 28, 2025, to fully implement the requirements.
The Department believes that this implementation period is sufficient
for carriers to revise IT systems for the issuance, tracking, and
redemption of travel credits or vouchers meeting the regulatory
requirements, to establish procedures with respect to requesting and
reviewing supporting medical documentations from passengers, and to
train staff with regard to providing customer service on related
matters.
VIII. Severability
This final rule includes four major components that enhance
protections of airline passengers (ticket refunds due to airline
cancellation or significant change, baggage fee refunds for
significantly delayed bags, ancillary service fee refunds for services
not provided, and consumer protections for airline passengers affected
by a serious communicable disease), each of which is issued pursuant to
separate and independent legal authorities and operates independently
on its own. Were any component of this final rule stayed or invalidated
by a reviewing court, the components that remained in effect would
continue to provide vital protections to airline passengers. The
implementation of each component and the consumer protection provided
by each component do not hinge on other components of the rule.
Therefore, each of the four components of the final rule are severable.
In the event of a stay or invalidation of any part of any rule, or of
any rule as it applies to certain regulated entities, the Department's
intent is to otherwise preserve the rule to the fullest possible
extent.
Regulatory Analyses and Notices
A. Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures and Executive Order 13653 (Improving
Regulation and Regulatory Review)
The final rule meets the threshold for a significant regulatory
action as defined
[[Page 32827]]
in section (3)(f)(1) of Executive Order (E.O.) 12866, ``Regulatory
Planning and Review,'' as amended by E.O. 14094, ``Modernizing
Regulatory Review,'' because it is likely to have an annual effect on
the economy of $200 million or more, as adjusted by OMB pursuant to
section 3(f)(1). Table X summarizes the expected economic impacts of
the final rule.
The lack of universal definitions for ``cancellation'' and
``significant itinerary change'' has created inconsistency among
carriers in granting consumers airline ticket refunds. The final rule
will reduce these inconsistencies by defining these terms and will
reduce the resources consumers need to expend to obtain the refunds
they are owed. Consumer time savings are estimated to be about $3.8
million annually.
This rule implements a 2016 statutory mandate and requires that
airlines refund baggage fees when a bag is delivered to a consumer with
a delay of 12 hours or more for domestic flights, 15 hours for
international flights with a duration of 12 hours or less, and 30 hours
for international flights with a duration of over 12 hours. The final
rule also implements a 2018 mandate and requires airlines to refund
fees collected for ancillary services they fail to provide. The
expected economic impacts of these provisions consist of $16.0 million
annually in increased refunds to consumers and $7.1 million annually in
administrative costs for the airlines.
The final rule requires airlines to provide transferable travel
credits or vouchers, valid for at least five years, to passengers who
cancel travel for reasons related to a serious communicable disease.
The impacts of this requirement depend upon many factors, including the
presence and nature of a pandemic, whether airlines can enforce basic
economy change restrictions though collecting documentation from
consumers regarding whether they have or may have a serious
communicable disease, and the value assigned to a case of avoided
disease. Expected societal benefits are from infected air passengers
canceling planned air travel due the option of receiving the five-year
travel credit and the reduction in exposure of uninfected passengers to
serious contagious disease. Estimated annual costs would be $3.4
million outside of a pandemic or $482.0 million during a pandemic.
While data to quantify benefits are insufficient, a break-even analysis
illustrates the thresholds for the monetized value for a case of
avoided disease and the travel credit effectiveness rates that could
yield benefits that exceed costs.
Table 3--Summary of Annual Economic Impacts
[Millions of 2022 dollars]
------------------------------------------------------------------------
------------------------------------------------------------------------
Cancelled flight and significant change of flight itinerary
------------------------------------------------------------------------
Benefits (+):
Consumer time savings................. $3.8
Costs (-)................................. de minimis
Net benefits (costs)...................... $3.8
Transfers:
Increased airline ticket refunds Unquantified.
(airlines to consumers).
------------------------------------------------------------------------
Refunds of fees for significantly delayed bags and ancillary fees not
provided
------------------------------------------------------------------------
Benefits (+).............................. n/a
Costs (-):
Administrative........................ $7.1
Net benefits (costs)...................... ($7.1)
Transfers:
Baggage fee refunds (airlines to $16.0
consumers).
------------------------------------------------------------------------
Vouchers or travel credits for passengers affected by a serious
communicable disease
------------------------------------------------------------------------
Benefits (+):
Reduction in cases of serious Unquantified.
communicable disease.
Costs (-):
Documentation......................... $3.4 (non-pandemic) or
$482.0 (pandemic).
Net benefits (costs)...................... Unquantified.
------------------------------------------------------------------------
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA) (5 U.S.C. 601, et
seq.) requires Federal agencies to review regulations and assess their
impact on small entities unless the agency determines that a rule is
not expected to have a significant economic impact on a substantial
number of small entities. This final rule would have some impact on air
carriers and ticket agents that qualify as small entities. To assess
the impact of this final rule, the Department has prepared a final
regulatory flexibility analysis (FRFA), as set forth in this section.
As required by the Regulatory Flexibility Act (5 U.S.C. 601, et.
seq., the FRFA includes:
A statement of the need for and objectives of the rule;
A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the agency of such issues, and a
statement of any changes made in the proposed rule as a result of such
comments;
The response of the agency to any comments filed by the
Chief Counsel for Advocacy of the Small Business Administration (SBA
Advocacy) in response to the proposed rule, and a detailed statement of
any change made to the proposed rule in the final rule as a result of
the comments;
A description and estimate of the number of small entities
to which the rule will apply or an explanation of why no such estimate
is available;
A description of the projected reporting, recordkeeping
and other compliance requirements of the rule, including an estimate of
the classes of small entities which will be subject to the requirement
and the type of
[[Page 32828]]
professional skills necessary for preparation of the report or record;
and
A description of the steps the agency has taken to
minimize the significant economic impact on small entities consistent
with the stated objectives of applicable statutes, including a
statement of the factual, policy, and legal reasons for selecting the
alternative adopted in the final rule and why each one of the other
significant alternatives to the rule considered by the agency which
affect the impact on small entities was rejected.
A statement of the need for and objectives of the rule is provided
elsewhere in the preamble to this final rule and not repeated here.
Similarly, the Department provides in the COMMENTS AND RESPONSES
section a statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis or
the economic impacts of the rule and explains how DOT assessed these
issues and made changes, if any, to the final rule as a result. DOT did
not receive any comments from the Chief Counsel for Advocacy of the
Small Business Administration (SBA Advocacy) in response to the
proposed rule, the initial regulatory flexibility analysis, or the
economic impacts of the rule.
Small Entities Affected
The proposed rule would affect air carriers and ticket agents that
qualify as small entities. For air carriers, the Department defines
small entities based on the standard published in 14 CFR 399.73. An air
carrier is a small entity if it provides air transportation exclusively
with small aircraft, defined as any aircraft originally designed to
have a maximum passenger capacity of 60 seats or less or a maximum
payload capacity of 18,000 pounds or less. In 2022, 24 air carriers
meeting these criteria reported passenger traffic data to the Bureau of
Transportation Statistics.\101\ These carriers reported operating
revenues in 2018 ranging from $1 million to $84 million.
---------------------------------------------------------------------------
\101\ Bureau of Transportation Statistics. ``T1: U.S. Air
Carrier Traffic and Capacity Summary by Service Class.'' https://www.transtats.bts.gov/Fields.asp?gnoyr_VQ=FJH. Small entities have a
``CarrierGroupNew'' code of 5. Accessed Nov. 15, 2023.
Table 4--Affected Small Airlines
------------------------------------------------------------------------
-------------------------------------------------------------------------
40-Mile Air.
Air Excursions LLC.
Alaska Central Express.
Bering Air Inc.
Empire Airlines Inc.
FOX AIRCRAFT, LLC.
Grant Aviation.
Iliamna Air Taxi.
Island Air Service.
J&M Alaska Air Tours, Inc. (Alaska Air Transit).
Junipogo, LLC (70 North Air).
Kalinin Aviation LLC (Alaska Seaplanes).
Katmai Air.
Maritime Helicopters, Inc.
New Pacific Airlines (Ravn Alaska).
Paklook Air, Inc (Airlift Alaska, Yute Commuter).
PM Air, LLC.
Ryan Air.
Scott Air LLC (Island Air Express).
Smokey Bay Air Inc.
Spernak Airways Inc.
Venture Travel LLC (Taquan Air Service).
Warbelow.
Wright Air Service
------------------------------------------------------------------------
Source: BTS Air Carrier Summary Data (Form 41 and 298C Summary Data).
``T1: U.S. Air Carrier Traffic and Capacity Summary by Service
Class.'' BTS Air Carrier Report (Form 298C-F1).
For ticket agents, the Department defines small entities based on
the size standards published by the Small Business Administration in 13
CFR 121.201. These size standards use the North American Industry
Classification System (NAICS), which does not have a category
specifically for ticket agents. Instead, the closest corresponding
industry is travel agencies (NAICS code 561510). Establishments in this
industry primarily act as agents in selling travel, tour, and
accommodation services to the public and commercial clients. An
establishment in this industry is a small entity if it has total annual
revenues below $22 million. This amount excludes funds received in
trust for an unaffiliated third party, such as bookings or sales
subject to commissions, but includes commissions received.
Data from the 2017 Economic Census provide an estimate of the
number of small-entity ticket agents in the United States.\102\ This
survey, conducted every five years by the US Census Bureau, is the
official national measure of businesses and includes information on
employment and revenue by industry. The survey groups firms by NAICS
code and by revenue size, with $25 million being the closest threshold
amount to the small-entity standard of $22 million. In 2017, 7,827
travel agency establishments had annual revenues of less than $25
million (Table 5). Not all travel agencies serve as ticket agents,
however, making the number an over-estimate of affected small entities.
The number is also an over-estimate because some of the firms may have
annual revenues greater than $22 million.
---------------------------------------------------------------------------
\102\ U.S. Census Bureau. 2022. ``Economic Census.'' https://www.census.gov/programs-surveys/economic-census.html.
Table 5--Travel Agency Establishments by Revenue, 2017
------------------------------------------------------------------------
Annual revenue Firms
------------------------------------------------------------------------
Less than $100,000........................................... 1,470
$100,000 to $249,999......................................... 1,774
$250,000 to $499,999......................................... 1,441
$500,000 to $999,999......................................... 1,290
$1,000,000 to $2,499,999..................................... 1,069
$2,500,000 to $4,999,999..................................... 462
$5,000,000 to $9,999,999..................................... 221
$10,000,000 to $24,999,999................................... 100
----------
Total.................................................... 7,827
------------------------------------------------------------------------
Notes: NAICS code 561510.
Source: U.S. Census Bureau, 2017 Economic Census.
Compliance Requirements and Costs
As described in more detail elsewhere in the preamble of this final
rule, the Department provides definitions and refund requirements for
cancelled flight and significant change of flight itinerary. The
Department also specifies requirements for significantly delayed bags
and ancillary fees that passengers pay for that are not provided. The
Department also establishes requirements for airlines to provide
vouchers or travel credits to passengers whose travel plans are
disrupted by circumstances beyond their control related to a serious
communicable disease.
As described in the Regulatory Impact Analysis for the final rule,
the primary costs for the final rule that would be incurred by business
are administrative costs from baggage and ancillary fee refund
requirements and those related to the collection of documentation of
serious contagious disease from passengers. Some small carriers that
qualify as small businesses operate flights as part of a code-share
arrangement with a larger carrier. In these cases, the larger carrier
collects the baggage fees and other ancillary service fees and would be
responsible for the refunds under the proposal. Therefore, overall
costs to small businesses are likely lower than if small carriers
collected the fees in all cases, though the Department acknowledges
that some small carriers still collect the fees and would therefore be
responsible for any refunds due as a result of the rule. As described
in the baggage fee refund analysis, estimated annual refund payments
and administrative costs for carriers ($9.3 million + $3.9 million)
would account for about 0.2
[[Page 32829]]
percent of airlines' annual baggage fee revenues ($6.8 billion in 2022,
the year used in the analysis). The Department acknowledges that the
annual bag fee revenues for small carriers are likely lower than those
of large carriers, but their estimated annual refund payments and
administrative costs are also likely lower than those of large
carriers. As baggage handling and tracking technologies improve, we
expect that the percentage of delayed bags affected by the rule and
resulting economic effects will decrease further.
The number of passengers who would submit documentation to small
carriers is difficult to predict, but a hypothetical example
illustrates the potential economic costs associated with the
documentation for small air carriers. In 2022, small air carriers in
the United States made over 1.02 million passenger trips.\103\ If
passengers needed to restrict travel for 5% of the trips and provide
airlines with documentation, passengers would submit approximately
51,000 forms. We assume that a customer service representative working
for an airline or ticket agent would need an average of 5 minutes
(0.083 hours) to review documentation and request additional
documentation if needed, for a total of approximately 4,236 hours.
---------------------------------------------------------------------------
\103\ Bureau of Transportation Statistics. Air Carrier
Statistics (Form 41 Traffic)--All Carriers: T-100 Segment (All
Carriers). United States Department of Transportation. https://www.transtats.bts.gov/Fields.asp?gnoyr_VQ=FMG. Accessed 10 Jan 2024.
---------------------------------------------------------------------------
To estimate the value of the time air carriers would spend
reviewing documentation, we use median wage data from the Bureau of
Labor Statistics. For customer service representatives, the fully
loaded wage rate is $25.68, using a $18.16 median hourly wage for
customer services representatives in May 2022,\104\ multiplied by 1.41
to account for employer benefit costs. The total estimated annual cost
of the forms would be approximately $109,000, or about $4,500 per small
carrier on average. This amounts to about 0.1 percent of total
operating revenue per small carrier on average. Some of these costs, or
additional costs, could be borne by small ticket agents.
---------------------------------------------------------------------------
\104\ Bureau of Labor Statistics. ``Occupational Employment and
Wage Estimates, May 2022: National estimates for customer service
representatives.'' https://www.bls.gov/oes/current/oes434051.htm.
---------------------------------------------------------------------------
Regulatory Alternatives and Minimization of Impacts on Small Entities
As described in the following paragraphs, several alternatives
considered by the Department have had would different impacts on small
businesses. The Department considered these alternatives and describes
in the paragraphs that follow the steps the Department has taken to
minimize the significant economic impact on small entities consistent
with the stated objectives of applicable statutes, including a
statement of the reasons for selecting the alternative adopted in the
final rule and why the Department rejected other significant
alternatives that affect the impact on small entities.
One alternative considered as part of the proposed rule was to
require cash refunds to consumers as a condition of accepting
significant government assistance. After considering the comments
received, the Department concluded that more time is needed to consider
the information provided and determine whether additional information
is needed for a final rule that benefits consumers. Therefore, the
Department did not adopt this alternative, and the final rule will
therefore have a smaller impact on small businesses.
The Department also considered an alternative to limit the scope of
the rule to specifying definitions for ``significant change in
itinerary'' and ``cancellation.'' The Department rejected this
alternative, however, based on its conclusion that removing the portion
of the rule related to serious communicable diseases would undermine
the Department's goal to protect consumers' financial interests when
the disruptions to their travel plans were caused by public health
concerns beyond their control. The Department also believes that
protecting consumers' financial interests would further incentivize
persons not to travel if they have or may have a serious communicable
disease. Nonetheless, in adopting the final rule to protect consumers
affected by a serious communicable disease, the Department imposes the
requirements only on airlines but not ticket agents, including ticket
agents that qualify as small businesses, thereby decreasing the impact
on these small entities. For airlines that qualify as small businesses,
although they are required to provide travel credits or vouchers to
consumers who choose not to travel to protect themselves or others from
a serious communicable disease, they are not required to accept a
consumer's self-diagnosis of a medical condition consistent with public
health guidance issued by CDC, comparable agencies in other countries,
or WHO. The Department views this change as a way to reduce fraud and
abuse and decrease the impact on small airlines.
In determining what constitutes a significant itinerary change, the
Department evaluated three alternative timeframes for early departures
or delayed arrivals that would constitute a significant itinerary
change. The first alternative reflects the timeframes set forth in the
proposed rule: three hours for domestic itineraries and six hours for
international itineraries as the times that would be considered
significant. A second alternative left the timeframes for early
departure and late arrival undefined, essentially maintaining the
status quo. A third alternative considered was to adopt a tiered
structure based upon such factors as total travel time. The final rule
adopts the three- and six-hour timeframes from the proposed rule. The
Department rejected the alternative of leaving the timeframes
undefined. While leaving the timeframes undefined grants the most
flexibility to the airlines, it would not achieve the same consistency
as a uniform standard, which is an objective sought by this rulemaking.
The Department rejected a tiered approach because of its complexity and
potential difficulties in implementation for airlines as well
comprehension on the part of consumers.
With regard to the significant change in flight itinerary because
of a downgrade in available amenities, the proposed rule included
aircraft changes that lead to a significant downgrade of available
amenities or travel experiences for all passengers. For the final rule,
except for a downgrade in the class of service, the downgrade of
available amenities applies to passengers with disabilities. The final
rule clarifies that it refers to travel on a substitute aircraft that
results in one or more accessibility features needed by the passenger
being unavailable and changes in connecting airport for persons with
disabilities. The Department altered the scope of passengers covered
because of the ambiguity and subjectivity of what constitutes
significant downgrade in amenities and travel experience. By retaining
applicability to persons with disabilities, the final rule recognizes
that aircraft substitutions can result in discomfort and inconveniences
when an accessible feature needed by a passenger with a disability is
unavailable.
Another alternative considered by the Department and adopted in the
final rule is to extend the length of baggage delivery delay for long-
haul international flights (flights with a duration of more than 12
hours) under which a refund of baggage is required, from the 25-hour
standard proposed in the NPRM to the 30-hour standard adopted in the
final rule. This final rule, however, also shortened the length of
baggage delivery delay for other
[[Page 32830]]
international flights (flights with a duration of 12 hours or less)
under which a refund of baggage fee is required, from the 25-hour
standard proposed in the NPRM to the 15-hour standard adopted in the
final rule. The final rule decreases the impact on small carriers
operating long-haul international flights and increases the impact on
small carriers operating shorter international flights. The Department
made the changes based on its view that setting a different standard
for long-haul international flights incentivizes carriers to deliver
the delayed bags as soon as possible to avoid refunding baggage fee,
which benefits consumers and airlines. The Department further views
that a shorter timeframe for delivering delayed bags on shorter
international flights is beneficial to consumers and ensures that the
baggage delivery delay standard is appropriate considering the ability
of carriers to transport the delayed bags on its next available flight,
other carriers' flights, or through courier services.
The Department also considered whether to finalize the proposed
requirement that airlines and ticket agents give non-expiring travel
credits or vouchers to passengers who do not travel due to government
restrictions or advice from a medical professional related to a serious
communicable disease. Although the non-expiring feature would provide
consumers the maximum flexibility to use the credits or vouchers, the
Department recognizes the difficulty in managing and tracking them
indefinitely. Thus, the Department adopted a final rule requiring that
the travel credits be valid for at least five years from the date of
the issuance. The Department views a five-year validity period a
sufficient timeframe to ensure passengers who are affected by a serious
communicable disease can use the credits while reducing burdens on
airlines.
C. Executive Order 13132 (Federalism)
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism''). This
notice does not propose any provision that: (1) has substantial direct
effects on the States, the relationship between the national government
and the States, or the distribution of power and responsibilities among
the various levels of government; (2) imposes substantial direct
compliance costs on State and local governments; or (3) preempts State
law. States are already preempted from regulating in this area by the
Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation
and funding requirements of Executive Order 13132 do not apply.
D. Executive Order 13175
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because none of the
provisions finalized in this rule would significantly or uniquely
affect the communities of the Indian tribal governments or impose
substantial direct compliance costs on them, the funding and
consultation requirements of Executive Order 13175 do not apply.
E. Paperwork Reduction Act
This final rule imposes a new collection of information that would
require approval by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (Pub. L. 104-13, 49 U.S.C. 3501 et seq.
The Department has sought approval from OMB for the collection of
information established in this final rule. The Department will publish
a separate notice in the Federal Register announcing OMB approval of
the new collection and advising the public of the OMB control number
associated with the new collection.
The new collection of information established in this final rule
relates to allowing airlines to require passengers requesting travel
credits or vouchers because their travel is affected by a serious
communicable disease to provide documentation. Specifically, the
Department allows airlines to require passengers wishing to cancel a
flight itinerary that is still operated to provide documentation
demonstrating that that they are prohibited from travel or are required
to quarantine for a substantial portion of the trip by a governmental
entity in relation to a serious communicable disease, or that they are
advised by a licensed treating medical professional not to travel to
protect themselves or others from a serious communicable disease. For
this information collection, a description of the respondents and an
estimate of the annual recordkeeping and periodic reporting burden are
set forth below:
Requirement to Prepare and Submit to Airlines Documentations
Demonstrating a Passenger is Eligible for Travel Credits or Vouchers
Due to a Reason Related to A Serious Communicable Disease.
Respondents: Passengers prohibited or required to quarantine for a
substantial portion of the trip by a governmental entity in relation to
a serious communicable disease, passengers advised by a licensed
treating medical professional not to travel by air because they have or
may have contracted a serious communicable disease such that their
travel would pose a threat to the health of others, and passengers
advised by a licensed treating medical professional not to travel to
protect themselves from a serious communicable disease during a public
health emergency.
Number of Respondents: The number of respondents would vary greatly
depending on whether there is a public health emergency and the
magnitude of that public health emergency. When there is a public
health emergency with a similar magnitude of the COVID-19 pandemic, the
number of respondents could potentially be very high. According to data
provided by A4A, the airlines provided exchanges of tickets to about
180 million passengers between March 2020 and February 2021. Industry
further suggests in comments on the proposed rule that about 15 percent
of consumers who need to make ticket changes might opt for a travel
credit instead of an immediate ticket change. Thus, we estimate that of
the 180 million consumers provided ticket changes in the baseline, 27
million would be the number of respondents who need to submit the
documentation to receive the five-year travel credit under the final
rule.\105\ For purposes of this PRA burden analysis, we assume that the
number of medical assistants developing the documentation and airline
customer service representatives reviewing the documentation equal the
number of customers providing responses.\106\
---------------------------------------------------------------------------
\105\ In the NPRM, we estimated 5.58 million respondents based
on the Department's data showing that in 2020, U.S. airlines
enplaned 558 million fewer passengers in domestic air transportation
than in 2019. We estimated that if 1% of this reduction was due to
passengers unable or are advised to not travel for a qualifying
reason and required by airlines and ticket agents to submit
documentation, there would be 5.58 million respondents. For the
final rule, we increased this number based on the data provided by
A4A as a reasonable upper bound, because not all of the 15% of
passengers who seek a travel credit or voucher would be entitled to
one under this final rule.
\106\ This number may be an overestimate because the same
airline customer service representatives likely review multiple
documentation submissions.
---------------------------------------------------------------------------
Estimated Annual Burden on Respondents: We estimate that each
respondent would need 30 minutes (0.5 hours) to obtain a documentation
from a medical professional per response, per year. We also estimate
that a medical assistant would need 15 minutes (0.25 hours) to provide
consultation to the passenger or to prepare the documentation. We
further estimate that a customer service representative working for an
airline would need an
[[Page 32831]]
average of 5 minutes (0.083 hours) to review the documentation and
request additional documentation if needed. Passengers would spend a
total of approximately 13.5 million hours per year (0.5 hours x 27
million passengers) to obtain the documentation. Medical assistants
would spend a total of 6.75 million hours per year (0.25 hours x 27
million forms) to prepare the forms. Airline customer service
representatives would spend approximately 2,241,000 hours (0.083 hours
x 27 million forms) per year to review the documentation.
To calculate the hourly value of time spent on the documentation,
we used median wage data from the Bureau of Labor Statistics as of May
2022. Respondents would obtain, present, and submit the documentation
on their own time without pay and we estimate the value of this
uncompensated activity using a post-tax wage estimate of $18.48 per
hour ($22.26 median hourly wage for all occupations minus a 17%
estimated tax rate). For medical assistants, we used a fully loaded
wage of $25.94 ($18.40 hourly wage multiplied by 1.41 to account for
employer benefit costs.) For customer service representatives, we use
an estimate of $25.61 per hour ($18.16 median hourly wage times a wage
multiplier of 1.41). In the scenario that there is a public health
emergency, the total annual estimated documentation costs of the forms
would be approximately $482 million (Table 6).\107\
---------------------------------------------------------------------------
\107\ The estimated costs calculated here assume that there is a
public health emergency. The Regulatory Impact Analysis accompanying
this rule estimated the cost to be about $3.4 million when there is
not a public health emergency.
Table 6--Example Annual Cost Estimate for Documentation
----------------------------------------------------------------------------------------------------------------
Estimated
Group Forms Hours per form Total hours Hourly time costs
value (millions)
----------------------------------------------------------------------------------------------------------------
People restricting travel....... 27,000,000 0.5 13,500,000 $18.48 $249,480,000
Medical assistants.............. 27,000,000 0.25 6,750,000 25.94 175,095,000
Customer service representatives 27,000,000 0.083 2,241,000 25.61 57,392,010
----------------------------------------------------------------------------------------------------------------
The Department has identified a number of disclosure requirements
in this final rule subject to approval by the Office of Management and
Budget under the PRA. These requirements are: (1) as specified in 14
CFR 259.5(b)(6), carriers must disclose to consumers in their customer
service plans that consumers are entitled to a refund if this is the
case when offering travel credits, vouchers, or other compensation in
lieu of refunds, and to disclose any material restrictions, conditions,
or limitations on travel credits, vouchers, or other compensation
offered, regardless of whether consumers are entitled to a refund; (2)
as specified in 14 CFR 259.5(b)(7), carriers must include in their
customer service plans a statement regarding compliance with the
requirements of part 262 regarding vouchers for consumers in
circumstances relating to serious communicable diseases; (3) as
specified in 14 CFR 260.4(d), carriers that failed to provide ancillary
services paid for by a passenger must notify another carrier that is
responsible for refunding the ancillary service fee about the service
failure; (4) as specified in 14 CFR 260.5(c), carriers that receive
MBRs must notify another carrier that is responsible for refunding
baggage fees about the baggage delay; (5) as specified in 14 CFR
260.6(d), carriers that set a deadline for consumers to respond to
alternative transportation offers must adopt and post on their websites
their policies regarding how to treat consumers not responding by the
deadlines; (6) as specified in 14 CFR 260.6(e), carriers must notify
affected consumers about cancellation or significant changes, rights to
refunds, offers of alternatives, and any deadline to respond; (7) as
specified in 14 CFR 260.6(f), carriers must notify ticket agents that
are the merchants of record for the ticket sales whether a consumer is
eligible for a refund; (8) as specified in 14 CFR 262.8, carriers must
disclose material restrictions, conditions, or limitations on vouchers
provided to consumers in relation to a serious communicable disease;
(9) as specified in 14 CFR 399.80(l), ticket agents must disclose to
consumers that they are entitled to a refund if this is the case when
offering travel credits, vouchers, or other compensation in lieu of
refunds, and must also disclose any material restrictions, conditions,
or limitations on travel credits, vouchers, or other compensation
offered, regardless of whether consumers are entitled to a refund; and
(10) as specified in 14 CFR 399.80(l), ticket agents must disclose at
the time of ticket purchase any service fees that are not refundable.
DOT will request comment on and seek approval from OMB for these
disclosure requirements and publish separate notice in the Federal
Register advising of the OMB Control Number(s) when OMB approves the
information collection(s).
Notwithstanding any other provisions of law, no person shall be
subject to penalty for failing to comply with a collection of
information if the collection of information does not display a
currently valid OMB control number.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) requires, at 2
U.S.C. 1532, that agencies prepare an assessment of anticipated costs
and benefits before issuing any rule that may result in the expenditure
by State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. As described elsewhere in the preamble,
this final rule may have an effect on the private sector that exceeds
this threshold. The UMRA permits agencies to provide the assessment
required by UMRA as part of any other assessment prepared in support of
the rule, and the Department has provided the assessment required by
UMRA within the RIA prepared in support of the final rule.
G. National Environmental Policy Act
The Department has analyzed the environmental impacts of this
action pursuant to the National Environmental Policy Act of 1969 (NEPA)
(42 U.S.C. 4321 et seq.) and has determined that it is categorically
excluded pursuant to DOT Order 5610.1C, Procedures for Considering
Environmental Impacts (44 FR 56420, October 1, 1979). Categorical
exclusions are actions identified in an agency's NEPA implementing
procedures that do not normally have a significant impact on the
environment and therefore do not require either an
[[Page 32832]]
environmental assessment (EA) or environmental impact statement (EIS).
See 40 CFR 1508.4. Paragraph 4.c.6.i of DOT Order 5610.1C categorically
excludes ``[a]ctions relating to consumer protection, including
regulations.'' This final rule relates to consumer protection. The
Department does not anticipate any environmental impacts, and there are
no extraordinary circumstances present in connection with this
rulemaking.
Signed this 1st day of April, 2024, in Washington DC.
Peter Paul Montgomery Buttigieg,
Secretary of Transportation.
List of Subjects
14 CFR Part 259
Air Carriers, Consumer Protection, Reporting and Recordkeeping
Requirements.
14 CFR Part 260
Air carriers, Consumer protection.
14 CFR Part 262
Air carriers, Consumer protection.
14 CFR Part 399
Administrative practice and procedure, Air carriers, Air rates and
fares, Air taxis, Consumer protection, Small businesses.
For the reasons set forth in the preamble, the Department amends
title 14 CFR Chapter II as follows:
PART 259--ENHANCED PROTECTIONS FOR AIRLINE PASSENGERS
0
1. The authority citation for 14 CFR part 259 continues to read as
follows:
Authority: 49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702,
41708, 41712, and 42301.
0
2. Amend Sec. 259.3 by adding the definitions for ``Business days,''
``Prompt refunds,'' and ``Serious communicable disease,'' in
alphabetical order to read as follows:
Sec. 259.3 Definitions.
Business days means Monday through Friday excluding Federal
holidays in the United States.
* * * * *
Prompt refunds means refunds made within 7 business days of a
refund becoming due as required by 14 CFR 374.3 for credit card
purchases, and within 20 calendar days of a refund becoming due for
cash, check, debit card, or other forms of purchases.
Serious communicable disease means a communicable disease as
defined in 42 CFR 70.1 that can cause serious health consequences
(e.g., breathing problems, organ damage, neurological difficulties,
death) and can be easily transmitted by casual contact in an aircraft
cabin environment (i.e., easily spread to others in an aircraft cabin
through general activities of passengers such as sitting next to
someone, shaking hands, talking to someone, or touching communal
surfaces). For example, the common cold is readily transmissible in an
aircraft cabin environment but does not have severe health
consequences. AIDS has serious health consequences but is not readily
transmissible in an aircraft cabin environment. Both the common cold
and AIDS would not be considered serious communicable diseases for
purposes of this part. SARS is readily transmissible in an aircraft
cabin environment and has severe health consequences. SARS would be
considered a serious communicable disease for purposes of this part.
* * * * *
0
3. Amend Sec. 259.5 by revising paragraphs (a), (b)(3), and (b)(5);
redesignating paragraphs (b)(6) through (b)(12) as paragraphs (b)(8)
through (b)(14), and adding new paragraphs (b)(6) and (b)(7); and
revising the newly designated paragraphs (b)(8) and (b)(11) to read as
follows:
Sec. 259.5 Customer Service Plan.
(a) Adoption of Plan. Each covered carrier must adopt a Customer
Service Plan applicable to its scheduled flights as specified in
paragraphs (b)(1) through (14) of this section and adhere to the plan's
terms.
(b) * * *
* * * * *
(3) Delivering baggage on time, including making every reasonable
effort to return mishandled baggage within 12 hours for domestic
flights and within 15 or 30 hours for international flights consistent
with the requirement of 14 CFR 260.5, compensating passengers for
reasonable expenses that result due to delay in delivery as required by
14 CFR part 254 for domestic flights and as required by applicable
international treaties for international flights, and reimbursing
passengers for any fee charged to transport a bag if that bag is
significantly delayed or lost as required by 14 CFR 260.5;
* * * * *
(5) Providing prompt refunds in the original form of payment (i.e.,
money is returned to an individual using whatever payment method the
individual used to make the original payment, such as a check, credit
card, debit card, cash, or airline miles) when ticket or ancillary
service fee refunds, including checked bag fee refunds, are due
pursuant to 14 CFR part 260 unless the consumer agrees to receive the
refunds in a different form of payment that is a cash equivalent
payment as defined in 14 CFR 260.2. Carriers may not retain a
processing fee for issuing refunds that are due;
(6) Disclosing that consumers are entitled to a refund if that is
the case when offering alternative transportation, travel credits,
vouchers, or other compensation in lieu of refunds consistent with the
requirement in 14 CFR 260.7. Disclosing any material restrictions,
conditions, or limitations on travel credits, vouchers, or other
compensation offered, regardless of whether consumers are entitled to a
refund as described in 14 CFR 260.8 and 14 CFR 262.8.
(7) Providing, upon request, travel credits or vouchers that are
transferrable and do not expire for at least five years from the date
of issuance to a consumer due to a serious communicable disease
impacting travel as described in 14 CFR part 262.
(8) Properly accommodating passengers with disabilities as required
by part 382 of this chapter and as set forth in the carrier's policies
and procedures and properly refunding passengers with disabilities and
individuals in the same reservation as the individual with a disability
who do not want to continue travel without the individual with a
disability as required by 14 CFR 260.6(c);
* * * * *
(11) Disclosing refund policies as required by 14 CFR part 260,
cancellations policies, frequent flyer rules, aircraft seating
configuration, and lavatory availability on the selling carrier's
website, and upon request, from the selling carrier's telephone
reservations staff;
* * * * *
0
4. Add part 260 to read as follows:
PART 260--REFUNDS FOR AIRLINE FARE AND ANCILLARY SERVICE FEES
Sec.
260.1 Purpose.
260.2 Definitions.
260.3 Applicability.
260.4 Refunding fees for ancillary services that consumers paid for
but that were not provided.
260.5 Refunding fees for significantly delayed or lost bags.
260.6 Refunding fare for flights cancelled or significantly changed
by carriers.
260.7 Notifying consumer of refund right before offering travel
credit or voucher.
[[Page 32833]]
260.8 Disclosing material restrictions, conditions, and limitations.
260.9 Providing prompt refunds.
260.10 Contract of carriage provisions related to refunds.
Authority: 49 U.S.C. 40101(a), 41702, and 41712.
Sec. 260.1 Purpose.
The purpose of this part is to ensure that carriers promptly refund
consumers for: (1) fees for ancillary services related to air travel
that consumers paid for but were not provided; (2) fees to transport
checked bags that are lost or significantly delayed; and (3) airfare
for a flight that is cancelled or had a significant change of flight
itinerary where the consumer does not accept the change to the flight
itinerary, alternative transportation, airline voucher or credit, or
other compensation offered by the carrier.
Sec. 260.2 Definitions.
As used in this part:
Air carrier means a citizen of the United States undertaking by any
means, directly or indirectly, to provide air transportation.
Ancillary service means any optional service related to air travel
that a covered carrier provides for a fee, beyond passenger air
transportation. Such services may include, but are not limited to,
transport of checked or carry-on baggage, advance seat selection,
access to in-flight entertainment programs or Wi-Fi, in-flight
beverages, snacks, meals, pillows and blankets, seat upgrades, and
lounge access.
Automatic refund means issuing a refund to a consumer without
waiting to receive an explicit refund request, when the consumer's
right to a refund is undisputed because the contracted service was not
provided and either the consumer rejected the alternative offered or no
alternative was offered.
Break in journey means any deliberate interruption by a passenger
of a journey between a point in the United States and a point in a
foreign country where there is a stopover at a foreign point scheduled
to exceed 24 hours. If the stopover is 24 hours or less, whether it is
a break in journey depends on various factors such as whether the
segment between two foreign points and the segment between a foreign
point and the United States were purchased in a single transaction and
as a single ticket/itinerary, whether the segment between two foreign
points is operated or marketed by a carrier that has no codeshare or
interline agreement with the carrier operating or marketing the segment
to or from the United States, and whether the stopover at a foreign
point involves the passenger picking up checked baggage, leaving the
airport, and continuing the next segment after a substantial amount of
time.
Business days means Monday through Friday, excluding Federal
holidays in the United States.
Cancelled flight or flight cancellation means a covered flight with
a specific flight number scheduled to be operated between a specific
origin-destination city pair that was published in the carrier's
Computer Reservation System at the time of the ticket sale but not
operated by the carrier.
Cash equivalent means a form of payment that can be used like cash,
including but not limited to a check, a prepaid card, funds transferred
to a consumer's bank account, funds provided through digital payment
methods (e.g., PayPal, Venmo), or a gift card that is widely accepted
in commerce. It is not cash equivalent if consumers bear the burden for
transaction, maintenance, or usage fees related to the payment.
Checked bag means a bag, special item (e.g., musical instrument or
a pet), or sports equipment (e.g., golf clubs) that was provided to a
covered carrier by or on behalf of a passenger for transportation in
the cargo compartment of a scheduled passenger flight. A checked bag
includes a gate-checked bag and a valet bag.
Class of service means seating in the same cabin class such as
First, Business, Premium Economy, or Economy class, which is defined
based on seat location in the aircraft and seat characteristics such as
width, seat recline angles, or pitch (including the amount of legroom).
Covered carrier means an air carrier or a foreign air carrier
operating to, from, or within the United States, conducting scheduled
passenger service.
Covered flight means a scheduled flight operated or marketed by a
covered carrier to, from, or within the United States, including
itineraries with brief and incidental stopover(s) at a foreign point
without a break in journey.
Foreign air carrier means a person, not a citizen of the United
States, undertaking by any means, directly or indirectly, to provide
foreign air transportation.
Individual with a disability has the same meaning as defined in 14
CFR 382.3.
Merchant of record means the entity (carrier or ticket agent)
responsible for processing payments by consumers for airfare or
ancillary services or products (including the transport of checked
bags), as shown in the consumer's financial charge statements, such as
debit or credit card charge statements.
Prompt refunds means refunds made within 7 business days of a
refund becoming due as required by 14 CFR 374.3 for credit card
purchases and within 20 calendar days of a refund becoming due for
cash, check, debit card, or other forms of purchases.
Significant change of flight itinerary or significantly changed
flight means a change to a covered flight itinerary made by a covered
carrier where as the result of the change:
(1) The consumer is scheduled to depart from the origination
airport three hours or more for domestic itineraries and six hours or
more for international itineraries earlier than the original scheduled
departure time;
(2) The consumer is scheduled to arrive at the destination airport
three hours or more for domestic itineraries or six hours or more for
international itineraries later than the original scheduled arrival
time;
(3) The consumer is scheduled to depart from a different
origination airport or arrive at a different destination airport;
(4) The consumer is scheduled to travel on an itinerary with more
connection points than that of the original itinerary;
(5) The consumer is downgraded to a lower class of service;
(6) The consumer who is an individual with a disability is
scheduled to travel through one or more connecting airports different
from the original itinerary; or
(7) The consumer who is an individual with a disability is
scheduled to travel on substitute aircraft on which one or more
accessibility features needed by the customer are unavailable.
Significantly delayed checked bag means a checked bag not delivered
to or picked up by the consumer or another person authorized to act on
behalf of the consumer within 12 hours of the last flight segment's
arrival for domestic itineraries, within 15 hours of the last flight
segment's arrival for international itineraries with a non-stop flight
segment between the United States and a foreign point that is 12 hours
or less in duration, and within 30 hours of the last flight segment's
arrival for international itineraries with a non-stop flight segment
between the United States and a foreign point that is more than 12
hours in duration. The 15-hour and 30-hour standards apply to domestic
segments of international itineraries.
[[Page 32834]]
Sec. 260.3 Applicability.
This part applies to: covered carriers that are the merchants of
record; covered carriers that operate the flight or, for multiple-
carrier itineraries, covered carriers that operate the last segment of
a flight where a ticket agent is the merchant of record for a checked
bag fee; and covered carriers that fail to provide an ancillary service
(other than checked bag service) for which the consumer paid where a
ticket agent is the merchant of record for an ancillary service fee
other than checked bag fee.
Sec. 260.4 Refunding fees for ancillary services that consumers paid
for but that were not provided.
(a) A covered carrier that is the merchant of record shall provide
a prompt and automatic refund to a consumer for any fees it collected
from the consumer for ancillary services if the service was not
provided through no fault of the consumer (e.g., prepaid ancillary
service not utilized by the consumer because of flight cancellation,
significant change, or oversale situation; service not provided because
of aircraft substitution, equipment malfunction, etc.). If a ticket
agent is the merchant of record for a checked bag fee and the checked
bag service was not provided (or was significantly delayed) through no
fault of the consumer, the carrier that operated the flight, or for
multiple-carrier itineraries, the carrier that operated the last
segment of the consumer's itinerary is responsible for providing a
prompt and automatic refund of the checked bag fee, consistent with
Sec. 260.5. If a ticket agent is the merchant of record for fees for
all other ancillary services, the carrier that operated the flight and
failed to provide the service through no fault of the consumer is
responsible for providing a prompt and automatic refund.
(b) In situations where the ancillary service the consumer paid for
(other than the service of transporting a checked bag) is not available
for all the passengers who paid for that service (e.g., Wi-Fi not
available for all passengers on a flight, lounge access not available
for all passengers on a certain date), a carrier's obligation under
paragraph (a) of this section to provide a prompt and automatic refund
begins when the information about the unavailability of the service is
known by the carrier that failed to provide the service, and, if
applicable, relayed as provided in paragraph (d) of this section to the
carrier responsible for providing a prompt refund as specified in
paragraph (a) of this section.
(c) In situations where the ancillary service the consumer paid for
(other than the service of transporting a checked bag) is not available
to an individual or several individuals, rather than to all the
passengers who paid for that service, a carrier's obligation under
paragraph (a) of this section to provide a prompt and automatic refund
begins when the consumer affected by the service failure notifies the
operating carrier that failed to provide the ancillary service about
the unavailability of the service and that information has been
confirmed and, if applicable, relayed as provided in paragraph (d) of
this section to the carrier responsible for providing a prompt refund
as specified in paragraph (a) of this section. Notification of the
unavailability of the ancillary service by a consumer is considered a
request for a refund.
(d) In situations where a carrier is the merchant of record for a
fee for an ancillary service and the carrier that operates the flight
where the ancillary service was not provided are different entities,
the operating carrier that failed to provide the ancillary service must
timely notify the carrier that is the merchant of record about the
unavailability of the ancillary service. Notification by the operating
carrier as set forth in this paragraph is necessary for the obligation
to provide a prompt refund of ancillary service fees in paragraphs (b)
and (c) of this section to apply. The obligation set forth in this
paragraph for the operating carrier to timely notify the carrier that
is the merchant of record does not apply when the failure to provide
service relates to transporting checked bags. Timely notification
requirements pertaining to refunds for fees charged to transport
checked bags are set forth in Sec. 260.5(c).
Sec. 260.5 Refunding fees for significantly delayed or lost bags.
A covered carrier that is the merchant of record or, if a ticket
agent is the merchant of record, the covered carrier that operated the
flight or the last flight segment in a multiple-carrier itinerary, must
provide a prompt refund to a consumer of any fee charged for
transporting a lost bag or a significantly delayed checked bag, as
defined in Sec. 260.2 of this part and determined according to
paragraph (a) of this section, subject to the conditions in paragraphs
(b) and (c) of this section.
(a) Determining the length of delay for the bag. For the purpose of
determining whether a checked bag is significantly delayed as defined
in Sec. 260.2, the length of delay is calculated from the time the
passenger is given the opportunity to deplane from a flight at the
passenger's final destination airport (the beginning of the delay) to
the time that the carrier has delivered the bag to a location agreed
upon by the passenger and carrier (e.g., passenger's home or hotel) or
the time that the bag has been picked up by the passenger or another
person acting on behalf of the passenger at the passenger's final
destination airport (the end of the delay).
(b) Notification by passenger about lost or significantly delayed
bag. A covered carrier does not have an obligation to provide a refund
of the fee for a lost or significantly delayed checked bag unless a
passenger files a Mishandled Baggage Report (MBR) for the lost or
delayed bag with the carrier that operated the flight, or for multiple-
carrier itineraries, the carrier that operated the last segment of the
consumer's itinerary.
(c) Notification by carrier that received an MBR about lost or
significantly delayed checked bag. Except when the carrier responsible
for providing a prompt refund for a baggage fee as specified in this
section is the same carrier that received the MBR, a covered carrier
that received the MBR must timely notify the carrier responsible for
providing a prompt refund that the bag has been lost or significantly
delayed when this is the case. A covered carrier's obligation to
provide a prompt refund of a baggage fee for a lost bag or a
significantly delayed checked bag as defined in Sec. 260.2 is
conditioned upon the carrier that received the MBR notifying the
carrier responsible for providing a prompt refund that the bag has been
lost or significantly delayed.
(d) Automatic refunds. An automatic refund of a bag fee is due when
a checked bag is significantly delayed as determined according to
paragraph (a) of this section, the passenger has filed an MBR as
provided in paragraph (b) of this section, and, if applicable,
notification has been provided by the carrier that received the MBR as
set forth in paragraph (c) of this section.
(e) Amount of the refund. The amount of the refund issued to a
consumer must be a value equal to or greater than the fee that the
consumer paid to transport his/her checked bag.
(1) For carriers that adopt an escalated baggage fee scale for
multiple bags checked by one passenger, the amount of baggage fee
refund issued to the passenger can be determined based on the unique
identifier assigned to the significantly delayed or lost bag that
correlates to the baggage fee charged for that bag at the time of
checking. If there is no such unique identifier assigned, carriers must
refund the highest per bag fee or fees charged for the multiple bags.
[[Page 32835]]
(2) For a carrier that offers a baggage fee subscription program
where consumers can pay a subscription fee that covers fees for checked
bags for a specified period, the carrier must refund the lowest amount
of the baggage fee the carrier charges another passenger of similar
frequent flyer status and in the same class of service without the
subscription when a passenger subscribing to the program has a
significantly delayed or lost bag.
(f) Exemptions from the refund obligation. A covered carrier is
exempted from the obligation to refund the fee for a significantly
delayed bag in situations where the delay resulted from:
(1) A passenger's failure to pick up and recheck a bag at the first
international entry point into the United States as required by U.S.
Customs and Border Protection;
(2) A passenger's failure to pick up a checked bag that arrived on
time at the passenger's ticketed final destination due to the fault of
the passenger if documented by the carrier (e.g., passenger ended the
travel before reaching the final destination on the itinerary--``hidden
city'' itinerary, or the passenger failed to pick up the bag before
taking a flight on a separate itinerary); and
(3) A passenger's voluntary agreement to travel without the checked
bag on the same flight as described in paragraph (g) of this section.
(g) Voluntary separation from bag. A carrier may require a
passenger who fails to meet the minimum check-in time requirement for a
flight or is a standby passenger for a flight (i.e., a passenger who
lacks a reservation on that flight and is waiting at the gate for a
seat to be available on the flight) to agree to a new baggage delivery
date and location in situations where the carrier is unable to place
the passenger's checked bag on that flight because of the limited time
available. The carrier must not require the passenger to waive the
right to a refund of bag fees if the bag is lost, the right to
compensation for damaged, lost, or pilfered bags, or the right to
incidental expenses reimbursement arising from delayed bags beyond the
agreed upon delivery date, consistent with the Department's regulation
in 14 CFR part 254 and applicable international treaties.
Sec. 260.6 Refunding fare for flights cancelled or significantly
changed by carriers.
(a) Carriers' obligation to provide prompt refunds. A covered
carrier that is the merchant of record must provide a prompt and
automatic refund of the airfare (including all government-imposed taxes
and fees and all mandatory carrier-imposed charges) to a consumer for a
cancelled flight or a significantly changed flight as set forth in
paragraph (b) of this section.
(b) Automatic refunds. Automatic refunds of the airfare are due to
a consumer when the consumer's right to a refund is undisputed because
a carrier cancels a flight or makes a significant change of flight
itinerary as described in paragraphs (b)(1) through (b)(6) of this
section:
(1) A carrier does not offer alternative transportation for a
canceled flight or travel credits, vouchers, or other compensation in
lieu of a refund to a consumer (the date the flight was canceled is
considered the date the consumer requested a refund).
(2) A carrier does not offer alternative transportation for the
significantly changed flight or travel credits, vouchers, or other
compensation in lieu of a refund to the consumer who rejected a
significantly changed flight (the date the consumer rejects the
significantly changed flight itinerary is considered the date the
consumer requested a refund);
(3) A carrier offers a significantly changed flight or alternative
transportation for a significantly changed or a canceled flight, or
offers travel credits, vouchers, or other compensation in lieu of a
refund to the consumer, but the consumer rejects the alternative
transportation and compensation offered (the date the passenger rejects
the offers is considered the date the passenger requested a refund);
(4) A carrier offers a significantly changed flight or alternative
transportation for a significantly changed or a canceled flight, but
the consumer does not respond to the offers on or before a response
deadline set by the carrier as described in paragraph (d) of this
section and the consumer has not accepted any offer for travel credits,
vouchers, or other compensation in lieu of a refund, and the carrier's
policy is to treat a lack of a response as a rejection of the
alternative transportation offered (the date the carrier-imposed
deadline expired is considered the date the consumer requested a
refund);
(5) A carrier does not offer the consumer the options of traveling
on a significantly changed flight or traveling on an alternative
flight, but offers travel credits, vouchers, or other compensation in
lieu of a refund to the consumer, and the consumer does not respond to
the alternative compensation offered within a reasonable time, in which
case the lack of a response is deemed a rejection (the date the
reasonable time has passed as determined by the carrier is considered
the date the consumer requested a refund); or
(6) A carrier offers a significantly changed flight or alternative
transportation for a significantly changed or a canceled flight and
offers travel credits, vouchers, or other compensation in lieu of a
refund and the carrier has not set a deadline to respond, the consumer
does not respond to the alternatives offered, and the consumer does not
take the flight (the date the alternative flight was operated without
the passenger on board is considered the date the passenger requested a
refund).
(c) Individuals with a Disability. A carrier that is the merchant
of record must provide a prompt refund to an individual with a
disability upon notification by the individual with a disability that
he/she does not want to continue travel because of the significant
changes described in paragraphs (c)(1) through (c)(3) of this section.
The carrier must also provide a prompt refund to any individuals in the
same reservation as the individual with a disability who do not want to
continue travel without the individual with a disability in situations
described in Sec. 260(c)(1) through (c)(3).
(1) The individual with a disability is downgraded to a lower class
of service that results in one or more accessibility features needed by
the individual becoming unavailable.
(2) The individual with a disability is scheduled to travel through
one or more connecting airports that are different from the original
itinerary.
(3) The individual with a disability is scheduled to travel on a
substitute aircraft on which one or more accessibility features
available on the original aircraft needed by the individual are
unavailable.
(d) Carrier-imposed response deadline for alternative
transportation. A carrier may establish a reasonable deadline for a
consumer to accept or reject an offer of a significantly changed flight
or alternative transportation following a canceled flight or a
significantly changed flight itinerary. Carrier refund obligations when
a deadline is established are as described in paragraphs (d)(1) through
(d)(3) of this section.
(1) For a consumer who rejected the offer of a significantly
changed flight or alternative transportation for a significantly
changed or a canceled flight by the deadline established by the carrier
and has rejected any offer of travel credit, voucher, or other
[[Page 32836]]
compensation in lieu of a refund, the carrier must provide a refund
within 7 business days of the rejection date for tickets purchased with
credit cards and within 20 calendar days of the rejection date for
tickets purchased with other payments.
(2) A refund is not due to the consumer if the offer of a
significantly changed flight or alternative transportation for a
significantly changed or a canceled flight is accepted by the deadline
established by the carrier, or if an offer of travel credit, vouchers,
or compensation in lieu of a refund is accepted.
(3) A carrier that sets a deadline must adopt and post on its
website its policy specifying whether, upon receiving no response from
the consumer at the expiration of the deadline of the offer of a
significantly changed flight or offer of an alternative transportation,
the carrier will deem that the offer of significantly changed flight or
alternative transportation has been rejected by the consumer and issue
an automatic refund for the airfare or will deem that the offer of
significantly changed flight or alternative transportation has been
accepted by the consumer. A carrier must not deem an offer for travel
credits, vouchers, or other compensation in lieu of a refund to be an
acceptance when the consumer does not respond to the offer. Carriers
must adhere to their published policies.
(e) Notification to consumers. (1) Upon the occurrence of a flight
cancellation or a significant change, a covered carrier must timely
notify affected consumers about the cancellation or significant change,
consumers' rights to a refund if this is the case, any offer of
alternative transportation and other options such as travel credits,
vouchers, or other compensation in lieu of a refund, any deadline that
the carrier imposes for consumers to reject the offer of significantly
changed flight or alternative transportation, and the policy that the
carrier has adopted regarding consumers' not responding by any deadline
established by the carrier, as provided in paragraph (d) of this
section.
(2) For carriers that provide notification subscription services to
passengers, notification under paragraph (e)(1) of this section must be
provided through media that the carriers offer and the subscribers
choose, including emails, text messages, and push notices from mobile
apps.
(f) Carriers' obligation to notify ticket agents. In situations
where a ticket agent is the merchant of record for the transaction,
after receiving a refund request by a consumer through the ticket
agent, the carrier that canceled or significantly changed the flight
must inform the ticket agent without delay whether the consumer is
eligible for a refund under this section (i.e., whether the consumer
has accepted the significantly changed flight, the alternative
transportation, or other compensation offered in lieu of refunds). A
ticket agent's obligation to provide a refund starts when the ticket
agent receives such notification from the carrier.
Sec. 260.7 Notifying consumers of right to refund when offering
alternative transportation or travel credit or voucher.
If a carrier offers alternative transportation or alternative forms
of compensation such as travel credits, vouchers, or other compensation
in lieu of the refund, the carrier must first disclose to consumers
that they are entitled to a refund if that is the case. A carrier must
not deem a consumer to have accepted an offer for travel credits,
vouchers, or other compensation in lieu of a refund unless the consumer
affirmatively agrees to the alternative form of compensation.
Sec. 260.8 Disclosing material restrictions, conditions, or
limitations.
A carrier must clearly disclose, no later than at the time of
voucher or credit offer, any material restrictions, limitations, or
conditions on travel credits, vouchers, or other compensation,
including but not limited to validity period, advance purchase
requirement, capacity restrictions, and blackout dates, regardless of
whether consumers are entitled to a refund.
Sec. 260.9 Providing prompt refunds.
When a refund of a fare or a fee for an ancillary service,
including a fee for lost or significantly delayed checked baggage, is
due pursuant to this part, the refund must be issued promptly in the
original form of payment (i.e., money is returned to an individual
using whatever payment method the individual used to make the original
payment, such as a check, credit card, debit card, cash, or airline
miles) unless the consumer agrees to receive the refunds in a different
form of payment that is a cash equivalent as defined in Sec. 260.2.
Carriers may not retain a processing fee for issuing refunds that are
due.
Sec. 260.10 Contract of Carriage provisions related to refunds.
A carrier must not include terms or conditions in its contract of
carriage inconsistent with the carriers' obligations as specified by
this part. Any such action will be considered an unfair and deceptive
practice within the meaning of 49 U.S.C. 41712.
0
5. Add Part 262 to read as follows:
PART 262--TRAVEL CREDITS OR VOUCHERS DUE TO A SERIOUS COMMUNICABLE
DISEASE
Sec.
262.1 Purpose.
262.2 Definitions.
262.3 Applicability.
262.4 Passengers entitled to receive travel credits or vouchers.
262.5 Documentation.
262.6 Value of travel credits or vouchers.
262.7 Processing fee.
262.8 Disclosure of restrictions, conditions or limitations.
262.9 Contract of carriage.
Authority: 49 U.S.C. 40101(a), 41702, and 41712.
Sec. 262.1 Purpose.
The purpose of this part is to ensure that carriers provide travel
credits or vouchers, upon request, to consumers who are restricted or
prohibited from traveling by a governmental entity due to a serious
communicable disease (e.g., as a result of a stay at home order, entry
restriction, or border closure) or are advised by a licensed treating
medical professional consistent with public health guidance issued by
the U.S. Centers for Disease Control and Prevention (CDC) or the World
Health Organization (WHO) not to travel to protect themselves or others
from a serious communicable disease.
Sec. 262.2 Definitions.
As used in this part:
Air carrier means a citizen of the United States undertaking by any
means, directly or indirectly, to provide air transportation.
Break in journey means any deliberate interruption by a passenger
of a journey between a point in the United States and a point in a
foreign country where there is a stopover at a foreign point scheduled
to exceed 24 hours. If the stopover is 24 hours or less, whether it is
a break in journey depends on various factors such as whether the
segment between two foreign points and the segment between a foreign
point and the United States were purchased in a single transaction and
as a single ticket/itinerary, whether the segment between two foreign
points is operated or marketed by a carrier that has no codeshare or
interline agreement with the carrier operating or marketing the segment
to or from the United States, and whether the stopover at a foreign
point involves the passenger picking up checked baggage, leaving the
airport,
[[Page 32837]]
and continuing the next segment after a substantial amount of time.
Covered carrier means an air carrier or a foreign air carrier
operating to, from or within the United States, conducting scheduled
passenger service.
Covered flight means a scheduled flight operated or marketed by a
covered carrier to, from, or within the United States, including
itineraries with brief and incidental stopover(s) at a foreign point
without a break in journey.
Licensed treating medical professional means an individual,
including a physician, a nurse practitioner, a physician's assistant,
or other medical provider, who is licensed or authorized under the law
of a State or territory in the United States or a comparable
jurisdiction in another country to engage in the practice of medicine
to diagnose or treat a patient for a health condition that is the
reason for the passenger to request a travel credit or voucher under
Sec. 262.4(b) and (c).
Merchant of record means the entity (carrier or ticket agent)
responsible for processing payment by the consumer for airfare or
ancillary services or products, as shown in the consumer's financial
charge statements such as debit or credit card charge statements.
Foreign air carrier means a person, not a citizen of the United
States, undertaking by any means, directly or indirectly, to provide
foreign air transportation.
Public health emergency has the same meaning as defined in 42 CFR
70.1.
Serious communicable disease means a communicable disease as
defined in 42 CFR 70.1 that can cause serious health consequences
(e.g., breathing problems, organ damage, neurological difficulties,
death) and can be easily transmitted by casual contact in an aircraft
cabin environment (i.e., easily spread to others in an aircraft cabin
through general activities of passengers such as sitting next to
someone, shaking hands, talking to someone, or touching communal
surfaces). For example, the common cold is readily transmissible in an
aircraft cabin environment but does not have severe health
consequences. AIDS has serious health consequences but is not readily
transmissible in an aircraft cabin environment. Both the common cold
and AIDS would not be considered serious communicable diseases for
purposes of this part. SARS is readily transmissible in an aircraft
cabin environment and has severe health consequences. SARS would be
considered a serious communicable disease for purposes of this part.
Sec. 262.3 Applicability.
This part applies to all covered carriers that are the merchant of
record for a covered flight or the operating carrier of a covered
flight when a ticket agent is the merchant of record.
Sec. 262.4 Passengers entitled to receive travel credits or vouchers.
A covered carrier as identified in Sec. 262.3 must provide a
transferrable travel credit or voucher that does not expire for at
least five years from the date of issuance to consumers described in
paragraphs (a) to (c) of this section.
(a) The consumer is prohibited from travel to, from, or within the
United States or is required to quarantine at the destination as shown
on the consumer's itinerary for more than 50% of the length of the trip
(excluding travel dates) because of a U.S. (Federal, State, or local)
or foreign government restriction or prohibition (e.g., stay at home
order, entry restriction, border closure, or quarantine notice) in
relation to a serious communicable disease. The consumer must have
purchased the airline ticket before a public health emergency was
declared for the origination or destination of the consumer's scheduled
travel or, if there is no declaration of a public health emergency,
before the government prohibition or restriction applicable to the
origination or the destination of the consumer's scheduled travel was
imposed.
(b) There is a public health emergency applicable to the
origination or destination of the consumer's itinerary, the consumer
purchased the airline ticket before the public health emergency was
declared, the consumer is scheduled to travel during the public health
emergency, and the consumer is advised by a licensed treating medical
professional not to travel by air to protect himself or herself from a
serious communicable disease.
(c) Regardless of whether there is a public health emergency, the
consumer is advised by a licensed treating medical professional not to
travel by air because the consumer has or is likely to have contracted
a serious communicable disease, and the consumer's condition is such
that traveling on a commercial flight would pose a direct threat to the
health of others.
Sec. 262.5 Documentation.
In the absence of an applicable determination issued by the
Department of Health and Human Services that requiring the
documentation specified in paragraphs (b) or (c) of this section is not
in the public interest, as a condition for issuing the travel credits
or vouchers in Sec. 262.4, carriers may require, as appropriate,
documentation specified in paragraphs (a) to (c) of this section.
(a) For any consumer requesting a travel credit or voucher because
of a government restriction or prohibition pursuant to Sec. 262.4(a),
carriers may require the consumer to provide the applicable current
government order or other document demonstrating how the government
order prohibits the consumer from travel to, from, or within the United
States as scheduled or requires the consumer to quarantine for more
than 50% of the length of the consumer's scheduled trip at the
destination (excluding travel dates) as shown on the passenger's
itinerary.
(b) For any consumer requesting a travel credit or voucher to
protect his or her health pursuant to Sec. 262.4(b), carriers may
require the consumer to provide a valid medical certificate as set
forth in paragraphs (b)(1) and (b)(2) of this section.
(1) For purposes of paragraph (b) of this section, a medical
certificate means a written statement from a licensed treating medical
professional stating that it is his/her professional opinion, based on
the medical condition of the individual and current medical knowledge
on the relevant serious communicable disease, including public health
guidance issued by CDC or WHO, if available, that the individual should
not travel during the current public health emergency by commercial air
transportation to protect his or her health from a serious communicable
disease.
(2) To be valid, a medical certificate under paragraph (b) of this
section must be dated after the declaration of the relevant public
health emergency and no earlier than one year before the scheduled
travel date and include information regarding the licensed treating
medical professional's license (the date of issuance, type of the
license, State or other jurisdiction in which the license was issued).
(c) For any consumer requesting a travel credit or a voucher to
protect the health of others pursuant to Sec. 262.4(c), carriers may
require the consumer to provide a valid medical certificate as set
forth in paragraphs (c)(1) through (c)(3) of this section. For any
consumer who informed carriers that there is not adequate time to
obtain and submit a valid medical certificate as set forth in
paragraphs (c)(1) through (c)(3) of this section before the scheduled
travel date, carriers must allow submission of the medical certificate
within a reasonable time after the scheduled travel date.
(1) For purposes of paragraph (c) of this section, a medical
certificate means
[[Page 32838]]
a written statement from a licensed treating medical professional
stating that it is his/her professional opinion, based on the medical
condition of the individual and current medical knowledge of the
relevant serious communicable disease, including public health guidance
issued by CDC or WHO, if available, that the individual should not
travel by commercial air transportation on the date of the scheduled
travel to protect the health of others from a serious communicable
disease because the individual has or is likely to have contracted a
serious communicable disease .
(2) To be valid, a medical certificate under paragraph (c) of this
section must include information regarding the licensed treating
medical professional's license (the date of issuance, type of the
license, State or other jurisdiction in which license was issued).
(3) For a medical certificate under paragraph (c) of this section,
carriers may require that it be dated close to the travel date, as
determined based on the current medical knowledge and applicable public
health guidance issued by CDC or WHO regarding the contagious period of
the relevant serious communicable disease.
Sec. 262.6 Value of travel credits or vouchers.
Upon confirming a consumer's eligibility for a travel credit or
voucher pursuant to this paragraph, a carrier must promptly issue the
travel credit or voucher with a value equal to or greater than the fare
(including government-imposed taxes and fees and carrier-imposed
charges and prepaid ancillary service fees for services not utilized by
the consumer). If a consumer has obtained a refund of the September
11th Security Fee or other government-imposed taxes and fees, then
those fee amounts may be deducted from the consumer's travel credit or
voucher. Nothing in this section relieves the carrier of its obligation
to comply with the requirements of other Federal agencies relating to
the refund of government-imposed taxes and fees.
Sec. 262.7 Processing fee.
A carrier may retain a processing fee for issuing the travel
voucher or credit, as long as the fee is on a per-passenger basis and
the existence and amount of the fee is clearly and prominently
disclosed to consumers at the time they purchased the airfare.
Sec. 262.8 Disclosure of restrictions, conditions or limitations.
A carrier shall not impose unreasonable restrictions, conditions or
limitations on the travel credits or vouchers, including a validity
period that is shorter than five years from the date of issuance, a
restriction on the transferability of the credits or vouchers to
another individual, conditions that severely restrict booking with
respect to travel date, time, route, or class of service; a limitation
that allows redemption only in one booking and renders any residual
value void; or a limitation that only allows the value of the credits
or vouchers to apply to the base fare of a new booking but not
government-imposed taxes or fees, carrier imposed fees, or ancillary
service fees. A carrier must clearly disclose, no later than at the
time of voucher or credit issuance, any material restrictions,
limitations, or conditions on the use of the credits and vouchers that
are not deemed unreasonable, including but not limited to advance
purchase requirement or capacity restrictions and blackout dates.
Sec. 262.9 Contract of carriage.
A carrier shall not include terms or conditions in its contract of
carriage inconsistent with the carriers' obligations as specified by
this part. Any such action will be considered an unfair and deceptive
practice within the meaning of 49 U.S.C. 41712.
PART 399--STATEMENTS OF GENERAL POLICY [AMENDED]
0
6. The authority citation for part 399 continues to read as follows:
Authority: 49 U.S.C. 40113(a), 41712, 46106, and 46107.
0
7. Amend Sec. 399.80 by revising paragraph (l) to read as follows:
Sec. 399.80 Unfair and deceptive practices of ticket agents.
* * * * *
(l) Failing to make a prompt refund of airfare (including all
government-imposed taxes and fees and all mandatory carrier-imposed
charges) to a consumer, upon request, for a cancelled flight or a
significantly changed flight itinerary if the consumer chooses not to
travel or accept compensation in lieu of a refund in situations
described in 14 CFR 260.6(b)(1) through (6) and 14 CFR 260.6(c)(1)
through (3) when the ticket agent is the merchant of record. Failing to
provide a prompt refund of airfare (including all government-imposed
taxes and fees and all mandatory carrier imposed charges), upon
request, for a significantly changed flight itinerary to consumers on
the same reservation as an individual with a disability who does not
want to continue travel because of a significant change described in
paragraph (l)(1)(vii)(E) of this section related to downgrades or
paragraph (l)(1)(vii)(G) of this section related to aircraft
substitution which result in one or more accessibility features needed
by the individual with a disability becoming unavailable or because of
the significant change described in paragraph (l)(1)(vii)(F) of this
section related to change in connecting airports. A prompt refund is
one that is made within 7 business days of the ticket agent receiving
information from a carrier as specified in 14 CFR 260.6(f), as required
by 12 CFR part 1026 for credit card purchases, and within 20 calendar
days of refund becoming due for cash, check, debit card, or other forms
of purchases. Ticket agents must provide the refunds in the original
form of payment (i.e., money is returned to individual using whatever
payment method the individual used to make the original payment, such
as a check, a credit card, a debit card, cash, or airline miles),
unless the consumer agrees to receive the refund in another form of
payment that is cash equivalent. A ticket agent may retain a service
fee charged when issuing the original ticket to the extent that service
is for more than processing payment for a flight that the consumer
found. That fee must be on a per-passenger basis and its existence,
amount, and the non-refundable nature if that is the case must be
clearly and prominently disclosed to consumers at the time they
purchase the airfare. Ticket agents may offer alternative
transportation, travel credits, vouchers, or other compensation in lieu
of refunds, but must first inform consumers that they are entitled to a
refund if that is the case. Ticket agents must clearly disclose any
material restrictions, conditions, and limitations on travel credits,
vouchers, or other compensation they offer.
(1) For purposes of paragraph (l) of this section, the following
definitions apply:
(i) Business days means Monday through Friday, excluding Federal
holidays in the United States.
(ii) Cancelled flight or cancellation means a flight with a
specific flight number scheduled to be operated between a specific
origin-destination city pair that was published in a carrier's Computer
Reservation System at the time of the ticket sale but was not operated
by the carrier.
(iii) Cash equivalent means a form of payment that can be used like
cash, including but not limited to a check, a prepaid card, funds
transferred to the passenger's bank account, funds provided through
digital payment methods (e.g., PayPal, Venmo), or a gift
[[Page 32839]]
card that is widely accepted in commerce. It is not cash equivalent if
consumers bear the burden for maintenance or usage fees related to the
payment.
(iv) Class of service means seating in the same cabin class such as
First, Business, Premium Economy, or Economy class, which is defined
based on seat location in the aircraft and seat characteristics such as
width, seat recline angles, or pitch (including the amount of legroom).
(v) Covered flight means a scheduled flight to, from, or within the
United States.
(vi) Merchant of record means the entity responsible for processing
payments by consumers for airfare, as shown in the consumer's financial
charge statements such as debit or credit card charge statements.
(vii) Significant change of flight itinerary or significantly
changed flight means a change to a flight itinerary consisting of
covered flight(s) made by a U.S. or foreign carrier where:
(A) The consumer is scheduled to depart from the origination
airport three hours or more for domestic itineraries and six hours or
more for international itineraries earlier than the original scheduled
departure time;
(B) The consumer is scheduled to arrive at the destination airport
three hours or more for domestic itineraries or six hours or more for
international itineraries later than the original scheduled arrival
time;
(C) The consumer is scheduled to depart from a different
origination airport or arrive at a different destination airport;
(D) The consumer is scheduled to travel on an itinerary with more
connection points than that of the original itinerary;
(E) The consumer is downgraded to a lower class of service;
(F) The consumer with a disability is scheduled to travel through
one or more connecting airports that are different from the original
itinerary; or
(G) The consumer with a disability is scheduled to travel on
substitute aircraft on which one or more accessibility features needed
by the passenger are unavailable.
* * * * *
[FR Doc. 2024-07177 Filed 4-25-24; 8:45 am]
BILLING CODE 4910-9X-P