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Exec. Order No. 14036, 86 FR 36987 (Jul. 9,

2021).

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.

Refund Report at pages 11–12.

See FAA Extension, Safety, and Security Act of

2016, Pub. L. 114–190, July 15, 2016; 49 U.S.C.

41704 note.

81 FR 75347 (October 31, 2016).

86 FR 38420 (July 21, 2021).

49 U.S.C. 42301 note prec.

Business Travel Coalition et. al.,

FlyersRights.org, and Travelers United.

Airlines for America, International Air

Transport Association, Arab Air Carriers’

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.

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.

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.

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.

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.

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).

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.

The Department received a total of 29

comments on the Ancillary Fee Refund

NPRM—three comments from consumer

rights advocacy groups,

16 comments

from U.S. and foreign airlines and

airline trade associations,

three

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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.

American Society of Travel Advisors and

Travel Technology Association (Travel Technology

Association submitted two comments).

Panasonic Avionics Corporation.

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 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.

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.

comments from ticket agent trade

associations,

five comments from

individual consumers, one comment

from the Colorado Attorney General,

and one comment from an ancillary

service provider.

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.

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.

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)

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.

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

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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,

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 of Flight

Itinerary.

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 origi-

nal scheduled departure time;

(2) the passenger is scheduled to arrive at the destination airport three hours or more (for do-

mestic 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 dif-

ferent 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 air-

ports 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 Airline Tickets Add 14 CFR part 260 to require U.S. and foreign air carriers that are the merchants of

record

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.

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.

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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 sig-

nificantly 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 trans-

portation 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 sig-

nificantly 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 alter-

native 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 com-

pensation in lieu of a refund and the carrier has not set a deadline to respond, the con-

sumer 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 for-

feit the right to a refund.

Refunding Fees for Significantly Delayed Bags 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 bag-

gage 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 ar-

riving 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 ar-

riving at the gate and the consumer has filed a Mishandled Baggage Report.

Refunding Ancillary Services Fees for Services

Not Provided.

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.

Providing Travel Credits or Vouchers to Con-

sumers Affected by a Serious Communicable

Disease.

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 con-

sumer purchased the airline ticket before a public health emergency for that area was de-

clared 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, irrespec-

tive 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 Receiving

Credits or Vouchers.

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:

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Merchants of records are the entities shown in

the consumer’s financial charge statements such as

debit or credit card charge statements.

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.

14 CFR 399.79(b)(1).

14 CFR 399.79(c).

87 FR 52677 (August 28, 2022).

Subject Final rule

(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 quar-

antine 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 seri-

ous communicable disease or the passenger would pose a direct threat to the health of oth-

ers 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 Issuing Tick-

ets.

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 promi-

nently disclosed to consumers at the time they purchase the airfare.

Processing Fees for Issuing Refunds, Credits,

or Vouchers.

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 sig-

nificantly changes a flight.

Processing Fee for Issuing Required Credits or Vouchers: Add 14 CFR part 262 to allow air-

lines to retain a processing fee from the value of a required travel credit or voucher pro-

vided 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

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.

Proof of

intent is not necessary to establish

unfairness.

The elements of unfairness

are further elaborated by the Department

in its guidance document.

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

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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

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

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See Section 2305 of the FAA Extension, Safety,

and Security Act of 2016, Public Law 114–190 (July

15, 2016)).

See Section 421 of the FAA Reauthorization

Act of 2018, Public Law 115–254 (October 5, 2018).

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.

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.

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 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.

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.

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

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.

As for ticket agents,

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,

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.

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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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.’’

https://otc-cta.gc.ca/eng/publication/

application-air-passenger-protection-regulations-a-

guide.

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).

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

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

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,

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.

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.’’

The

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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.

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.

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

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See, Rights of Airline Passengers When There

Are Controllable Flight Delays or Cancellations,

https://www.reginfo.gov/public/do/eAgenda

ViewRule?pubId=202304&RIN=2105-AF20.

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.

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

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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.

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.

reporting rule, 14 CFR part 234, and it

does not change the definition for

‘‘cancelled flight’’ in that regulation.

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.’’

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

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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

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)

Projected arrival delay or early

departure as offered to passenger

Result

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

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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.

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.

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.

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,

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See https://www.reginfo.gov/public/do/

eAgendaViewRule?pubId=202310&RIN=2105-AF20.

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.

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.

(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.

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.

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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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.

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

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.

(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

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See Air Passenger Protection Regulation (SOR/

2019–150) (APPR), Sections 17–18. https://laws-

lois.justice.gc.ca/eng/regulations/SOR-2019-150/

index.html.

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.

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

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

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88 FR 13387, Mar. 3, 2023.

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

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

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

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See 14 CFR 250.6(c).

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.

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.

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,

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

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See 89 FR 17766 (Mar. 12, 2024).

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.

ABLE

1—R

IGHTS TO A

EFUND BY

NDIVIDUALS

ITH

ISABILITIES AND

RAVEL

OMPANIONS

Significant change

Is an individual with a disability

entitled to a refund?

Are travel companions on the

same reservation entitled to a

refund if an individual with a

disability rejects change?

Aircraft Substitution:

Impacts an accessibility feature needed by a passenger with a

disability.

Yes ................................................. Yes.

Does NOT impact an accessibility feature needed by a passenger

with a disability.

No .................................................. No.

Downgrade in Class of Service:

Impacts an accessibility feature needed by a passenger with a

disability.

Yes ................................................. Yes.

Does NOT impact an accessibility feature needed by a passenger

with a disability.

Yes .................................................

(NOTE: any passenger down-

graded is entitled to refund irre-

spective of disability).

No.

(NOTE: if travel companion is

downgraded then that individual

would be entitled to refund).

Change of Connecting Airport:

Does not require analysis of impact on accessibility ....................... Yes ................................................. Yes.

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.

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

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

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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.

ASTA states that its data indicates that 98% of

travel agencies qualify as ‘‘small businesses’’ under

the Small Business Administration (SBA) size

standards.

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.

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.

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.

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

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.

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

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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.

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.

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.

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.

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See proposed rule text for 14 CFR 259.5(b)(5),

87 FR 51550, 51576.

See proposed rule text for 14 CFR 399.80(l), 87

FR 51550, 51579.

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.’’

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.’’

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.

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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.

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).

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.

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

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.

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

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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.

refund is due by ticket agents.

expect that this requirement, along with

the tolling of the refund timeline

discussed below, will alleviate the

financial burden on small ticket agents.

(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

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87 FR 51550, 51563.

12 CFR 1026.2(a)(6).

https://www.consumerfinance.gov/rules-policy/

regulations/1026/interp-2/#2-a-4-Interp-3.

Id.

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.’’

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.

(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.

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....’’

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.’’

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

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See fn. 29, supra.

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

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

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See https://www.transportation.gov/

airconsumer/airline-customer-service-dashboard,

an easy-to-use dashboard that displays airlines’

commitments.

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.

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.

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

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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.

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.

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.

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.

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

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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.

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

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.

The Table below summarizes whether

airlines or ticket agents can retain

certain fees when processing refunds.

ABLE

2—F

EES

HARGED BY

IRLINES AND

ICKET

GENTS

HEN

ROCESSING

EFUNDS

Types of service fees

Are airlines allowed to retain fee when

processing refunds?

Are ticket agents allowed to retain fee when

processing refunds?

Booking Fee (for processing payment for flight

that the consumer found).

No ..................................................................... N/A (DOT is not aware of ticket agents that

charge this type of booking fees).

Service Fee Related to Issuing Original Ticket

(for services provided beyond processing

payment for flight that the consumer found).

N/A (DOT is not aware of airlines that charge

these types of service fees).

Yes, subject to required disclosures.

Processing Fee for Required Refunds ............... No ..................................................................... No determination in 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

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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.

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.

See fn. 55, supra.

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,

because a significant number

of passengers travel on such aircraft.

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.

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

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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.

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.,

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.

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

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https://www.sita.aero/resources/surveys-

reports/baggage-it-insights-2023/.

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/.

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 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.

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 Socie

Internationale de

communications Ae

ronautiques

(SITA) Baggage IT Insights report,

transfer mishandling historically

remains by far the leading cause of bag

delays, which accounted for 42% of

total bag delays in 2022.

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.

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.

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.

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

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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.

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.

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

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The Merriam-Webster Dictionary defines

‘‘deliver’’ to mean ‘‘to take and hand over to or

leave for another.’’

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.’’

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

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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

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

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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

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

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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

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

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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 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

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86 FR 38423 (July 21, 2021).

See, Technical Reporting Directive #30A—

Mishandled Baggage and Wheelchairs and Scooters

(Amended), Dec. 21, 2018.

Id.

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.

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.

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.

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.

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

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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.

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%22

search%22%3A%5B%22FAA+Reauthorization

%22%5D%7D.

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

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.

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 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

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‘‘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).

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)

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

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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).

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 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.

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

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Consumer Action, Consumer Federation of

America, Consumer Reports, Edontravel.Com,

Flyersrights.Org, National Consumers League,

Travel Fairness Now, and U.S. PIRG.

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

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.

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

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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 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

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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.

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’’

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

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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 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.

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Final Rule, Defining Unfair Or Deceptive

Practices, 85 FR 78707, December 7, 2020.

See 85 FR 78707, 78710–78711 (Dec. 7, 2020).

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

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.’’

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

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

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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.

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.

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.

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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See Report to the White House Competition

Council, p. 11.

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.

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.

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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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.’’

See 14 CFR 382.21(b)(2).

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

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,

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.

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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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.

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.

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.

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

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).

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.

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.

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.

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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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.

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.

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

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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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.

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.

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

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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

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

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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.

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.

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

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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 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

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14 CFR 382.3.

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.

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.

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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Final Rule, Traveling by Air With Service

Animals, 85 FR 79742, Dec. 10, 2020.

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,

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

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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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.

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.

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

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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 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

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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,

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

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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.

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.

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.

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

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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.

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.

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.

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:

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Public Law 111–24, May 22, 2009.

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.

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).

(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)

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,

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.

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,

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.

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

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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.

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.

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.

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

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.

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,

and members of Congress

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

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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.

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

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

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

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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Federal Register / Vol. 89, No. 82 / Friday, April 26, 2024 / Rules and Regulations

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.

ABLE

3—S

UMMARY OF

NNUAL

CONOMIC

MPACTS

[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 (airlines to consumers) .................................... Unquantified.

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 consumers) ................................................... $16.0

Vouchers or travel credits for passengers affected by a serious communicable disease

Benefits (+):

Reduction in cases of serious communicable disease ..................................... Unquantified.

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

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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.

102

U.S. Census Bureau. 2022. ‘‘Economic

Census.’’ https://www.census.gov/programs-

surveys/economic-census.html.

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.

ABLE

4—A

FFECTED

MALL

IRLINES

40-Mile Air.

Air Excursions LLC.

Alaska Central Express.

Bering Air Inc.

Empire Airlines Inc.

ABLE

4—A

FFECTED

MALL

IRLINES

—Continued

FOX AIRCRAFT, LLC.

Grant Aviation.

Iliamna Air Taxi.

Island Air Service.

J&M Alaska Air Tours, Inc. (Alaska Air Tran-

sit).

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 Com-

muter).

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.

ABLE

5—T

RAVEL

GENCY

STABLISHMENTS BY

EVENUE

, 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 Eco-

nomic 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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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.

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.

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

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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.

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

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

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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.

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

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

ABLE

6—E

XAMPLE

NNUAL

OST

STIMATE FOR

OCUMENTATION

Group Forms

Hours per

form

Total hours

Hourly time

value

Estimated

costs

(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

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

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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:

§ 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.

* * * * *

■ 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

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.

§ 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.

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§ 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.

§ 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 § 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.

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 § 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

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.

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-

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).

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

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.

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.

§ 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.

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

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