Automatic Refunds Makes It Into FAA Bill After Much Debate

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The Senate Commerce Committee added a provision that would let customers receive automatic refunds whenever flights are significantly delayed or canceled.

The Senate Commerce Committee is adding language that could codify automatic refunds into law in its Federal Aviation Administration reauthorization bill. 

The committee amended the bill Tuesday night, just days after Senators Josh Hawley and Elizabeth Warren filed an amendment asking it to include a provision for automatic refunds. A previous version of the FAA bill said passengers would be entitled to a refund “upon written or electronic request.”

The previous language in the bill made it unclear if the Department of Transportation could enforce the automatic refunds rule it rolled out April 24. The DOT rule stated that passengers would be entitled to an automatic refund if a flight is significantly delayed or canceled. 

While the new bill does not outright include the phrase “automatic refunds,” it says that a domestic or international carrier should “consider a passenger to have requested a refund if …” before listing a set of conditions. 

According to the bill, some of these conditions include: 

  • “A flight is canceled and a passenger is not offered an alternative flight or any applicable form of compensation.”
  • “A passenger rejects the significantly delayed or changed flight, the option to rebook an alternative flight, or any applicable form of compensation.”
  • “A passenger does not respond to an offer of:
    •  A significantly delayed or changed flight or an alternative flight and the flight departs without the passenger
    • Or any applicable form of compensation by the date on which the canceled flight was scheduled to depart or the date that the significantly delayed or changed flight departs.”  

The new DOT rule has been met with some pushback from the airline industry. Airlines for America, the trade group that represents many major U.S. airlines, called the rule “anti-competitive.” 

Regarding the changes, Senate Commerce Committee chair Maria Cantwell said, “Statutory rights to refunds are a big win for consumers in this bill.  Passengers can reject vouchers or alternative flights, and without hassle, get a refund.”

Senator Ted Cruz, the ranking member of the Senate Commerce Committee, previously said on CNBC that he thought automatic refunds was a “dumb idea.” 

On Tuesday, Cruz said he and Cantwell agreed on a “clarifying point affirming the right of consumers to get a refund if that is their preference,” according to Reuters.

A spokesperson for the Senate Commerce Committee said the FAA bill still has strong bipartisan support after updating the language. 

The Senate has until May 10 to pass the bill, which is when the existing FAA reauthorization bill expires. 

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