DOT’s proposed rule potentially requires travel advisors to make refunds | Travel Research Online

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DOT’s proposed rule potentially requires travel advisors to make refunds

The Department of Transportation (DOT) has proposed new rules and asked for comments from the public regarding the refunding of airline tickets when flights are canceled or “significantly changed.” However, the definition of “ticket agents” is potentially troubling to the travel agency community.

The request for comment contains language which may create travel agency liability. Question 1(c)(ii) states: “When issuing a refund requires actions by both a ticket agent and an airline, should the Department hold both entities liable regardless of which entity “sold” the ticket?”

 Since early 2020, the Department has received a flood of air travel service complaints from consumers with non-refundable tickets who did not travel because airlines canceled or significantly changed their flights or because the consumers decided not to fly for pandemic-related reasons such as health concerns.

“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” said U.S. Transportation Secretary Pete Buttigieg. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

Although the DOT has required airlines “and ticket agents” to refund travelers if airlines cancel or significantly change their flights, the terms “significant change” and “cancellation” had not previously been defined, which has resulted in inconsistency among carriers on when passengers are entitled to refunds. Likewise, the definition of ticket agents potentially and in its broadest interpretation could encompass the traditional travel agent.

“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.”

The DOT statement goes on to indicate:

“The Department is proposing to require that ticket agents provide prompt refunds of airline ticket purchase prices or the air transportation portion of tour packages when an airline cancels or significantly changes a scheduled flight itinerary that the ticket agents sold directly to consumers, regardless of whether the ticket agent is in possession of the ticket purchase funds. Approximately 50% of tickets are sold by airlines directly to consumers, and the remainder are sold through ticket agents.”

This proposal would codify the Department’s longstanding interpretation that a failure to provide refunds when a carrier cancels or significantly changes a flight to, from, or within the United States is an unfair practice. The Department is also proposing, for the first time, to define the terms significant change and cancellation.

The Department proposes that significant changes to a flight would include:

  • Changes that affect the departure and/or arrival times by three hours or more for a domestic flight or six hours or more for an international flight;
  • Changes to the departure or arrival airport;
  • Changes that increase the number of connections in the itinerary; and
  • Changes to the type of aircraft flown if it causes a significant downgrade in the air travel experience or amenities available onboard the flight.
  • Under the proposal, a canceled flight would mean a flight that was published in a carrier’s Computer Reservation System at the time of the ticket sale but was not operated by the carrier.

The proposal would also require that airlines and ticket agents provide passengers flight credits or vouchers that are valid indefinitely when passengers are unable to fly for certain pandemic-related reasons, such as government-mandated bans on travel, closed borders, or passengers advised not to travel to protect their health or the health of other passengers. Further, under the proposal, airlines and ticket agents that receive significant government assistance related to a pandemic would be required to issue refunds in lieu of non-expiring travel credits or vouchers.

The Department encourages members of the public and interested parties to attend a virtual public meeting of the Aviation Consumer Protection Advisory Committee focusing on this rule-making scheduled for August 22, 2022, and to submit comments on this Notice of Proposed Rulemaking (NRPM). Comments must be received within 90 days of the date the notice is published in the Federal Register. The NPRM can be found at https://www.transportation.gov/airconsumer/latest-news. Additional information on this public meeting (including how to make requests to make remarks during the meeting) is available at https://www.transportation.gov/airconsumer/latest-news.

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