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Biden Mandates Action on Airline Refunds and Baggage Fees

By Michelle Baran

Jul 12, 2021

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For frustrated air travelers, help could be on the way.

Photo by Piotr Mitelski/Shutterstock

For frustrated air travelers, help could be on the way.

A new executive order signed by the president sets out to enhance protections for travelers—a move that could be a “game changer” for air travel.

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For travelers who don’t always feel heard by the U.S. airline industry, President Joe Biden has signed an executive order that aims to make their voice much, much louder.

The sweeping Executive Order on Promoting Competition in the American Economy, which was signed by Biden on July 9, sets out to establish consumer protections within numerous industries, including the transportation sector.

“Over the last several decades, as industries have consolidated, competition has weakened in too many markets,” the order states. An open and competitive marketplace “means more choices, better service, and lower prices [for consumers]”—something the airline industry argues it already offers.

In 2019, there were an average 3.46 airline competitors on all domestic U.S. flight routes, compared to 3.33 in 2000, according to Airlines for America, a trade group that represents the major U.S. airlines.

“Just this year, we have seen two new low-cost carriers burst on the scene . . . injecting even more competition into the U.S. air-travel marketplace. . . . This vigorous competition has led to historically low airfares,” Airlines for America said in a July 9 statement, adding that domestic fares have fallen 24 percent in the past decade, when adjusted for inflation. “Today, airfares remain 16 percent below those prepandemic levels.”

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The Biden administration, however, sees room for improvement. The new order calls on the Secretary of Transportation Pete Buttigieg to take several notable actions on behalf of travelers, including investigating and taking enforcement action regarding airlines’ failure to provide refunds for flights canceled due to the pandemic.

Paul Hudson, president of consumer advocacy group FlyersRights, says the order “could be a game changer.”

Hudson notes that the last time the federal government took up competition policy seriously was during the Jimmy Carter administration with the Airline Deregulation Act of 1978.  The act “deregulated airfares, scheduling, and terms of service under the theory that competition would lower airfares and improve service. But since then, competition has broken down with consolidation,” says Hudson, adding that the result is that consumer protections have suffered.

Here are the changes the new order sets forth for air travel:

Addressing airlines’ failure to provide refunds for flights canceled due to the pandemic

This is not the first time the airlines have been told that they are obligated to reimburse travelers for flights that were canceled during the global COVID-19 public health crisis.

In April 2020, the U.S. Department of Transportation (DOT) issued a notice to U.S. and foreign airlines reminding them that despite the unprecedented nature of the pandemic and the gross magnitude of flight cancellations they faced, they are still required to provide “a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier.”

That requirement, however, only applies to flights that were canceled or significantly delayed by the airlines—not cancellations made by passengers.

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In a June 2021 letter to Secretary Buttigieg, lawmakers argued that “many Americans have proactively canceled their flights at the urging of health officials—only to find themselves ineligible for refunds that would have been available had they waited for airlines to cancel their flights for them.”

In lieu of refunds, many passengers were offered future travel credits. The lawmakers are asking the DOT to take action to eliminate the expiration date on pandemic-related travel credits entirely and to address the failure of airlines to provide refunds.

Now, President Biden is asking the DOT to take action as well. The new executive order requests a report from the DOT within 45 days on the progress of its “investigatory and enforcement activities” regarding the airlines’ failure to provide timely refunds for flights canceled due to the pandemic.

Charlie Leocha of traveler advocacy non-profit Travelers United doesn’t think the order goes far enough in fighting for the refunds, however. 

“Consumers do not need another study. They need a simple statement from the president that all fight credits should not expire. That is the consumers’ money not the airlines,” says Leocha.

Luggage delayed? You should get a bag fee refund for that

Anyone who is on #teamcheckedbags knows the pain of baggage fees all too well. The more you travel or the bigger your brood, the more they pile up. But if you don’t actually receive your bags on time, should you be paying a fee for the service? Not according to the Biden administration.

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In the new executive order, Biden requests a proposed rule that would require the airlines “to refund baggage fees when a passenger’s luggage is substantially delayed.” It also states that other ancillary fees the airlines charge should be refunded when the service is not provided.

Better flight search

In an effort to enhance competition in the air travel marketplace, the order wants to improve travelers’ access to flight information “so that consumers can more easily find a broader set of available flights, including by new or lesser known airlines.” In other words, flight searches that don’t only favor the major U.S. carriers.

Ditch the hidden fees

Biden also wants to ensure that consumers are not subjected to “unfair or deceptive” practices when it comes to potential hidden fees and airfares when booking flights. Biden is asking the DOT to implement rules that would make sure that passengers are fully aware of all possible fees, including baggage, change, and cancellation fees, at the time of booking.

Improve the country’s airports

Another notable goal of Biden’s new order is a push to support airport development to accommodate the country’s overall passenger growth and ease airport congestion. Does this mean comfortable airport seating for all passengers and no more camping out on the grubby gate waiting area floor? Time will tell. 

>> Next: Why Airlines Keep Canceling Flights—and Will Yours Be Affected?

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