Finance

Airlines Caught Not Paying Canceled Flight Compensation

Welcome to Sneaky Airways. Don’t enjoy your flight.

The federal government just fined six airlines a record-breaking $7.25 million for slow-walking refunds they owe to passengers because flights got canceled or delayed. All together, these airlines still owe customers an eye-popping $600 million.

The past few years have brought extreme turbulence to the airline industry. Since the COVID pandemic started, thousands and thousands of flights have been canceled, lots of them at the last minute.

If your flight gets canceled or significantly delayed, the airline is supposed to offer you a refund. But they won’t always tell you that. Then they’re supposed to actually follow through and pay you that refund. But it turns out, that doesn’t always happen.

“When a flight gets canceled, passengers seeking refunds should be paid back promptly,” said U.S. Transportation Secretary Pete Buttigieg, whose department issued the fines. “A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund.”

Trouble is, the rules governing flights and airlines can get complicated, and even frequent fliers don’t necessarily know all of them by heart. So we’re going to break down exactly what rules the airlines are required to follow if your flight is canceled or delayed, or if your flight is overbooked, or if your luggage gets lost.

We’ll also tell you how to put in a claim if an airline still owes you money.

Don’t wait until you’re stranded at the airport to know what your rights are.

Which Airlines Got Fined, and How Do You Get Compensation?

The U.S. Department of Transportation is fining a half-dozen airlines a total of $7.25 million for what it calls “extreme delays in providing refunds.” The federal agency says it’s getting “a flood of complaints” about unpaid refunds. So far this year, it has dinged airlines for $8.1 million in civil penalties — the most ever.

The only U.S.-based airline in the bunch is budget carrier Frontier Airlines, which is based in Denver and flies to more than 100 cities. It got tagged with the heftiest fine — $2.2 million — because it still owes $222 million to customers, DOT said. If you didn’t get a refund that you were entitled to, or you have a different complaint about a flight or your experience with an airline, you can file an official complaint with the U.S. Department of Transportation.

The other five airlines that just got fined are Aeromexico, Air India, Colombian airline Avianca, Israeli carrier El Al, and TAP Portugal. If you’re still getting stiffed by one of them, you can complain to the feds about them too.

Pro Tip

Of the 10 largest U.S. airlines, nine now guarantee meals and hotels when an airline issue causes a cancellation or delay. All 10 guarantee free rebooking. The DOT compares their policies here.

You Don’t Have to Just Accept a Travel Voucher

Let’s say you’re at the airport and your flight suddenly gets canceled or massively delayed. Bummer.

(This isn’t happening as much as it was during the height of the pandemic, when disruptive COVID-19 outbreaks were wreaking havoc on flight schedules. But it’s still happening more often than usual, mostly because airlines are struggling to hire enough workers to handle a growing demand for air travel.)

Anyway, back to the airport. Your flight is canceled. Or it’s pushed back five hours. Arrrghhh. Fuming, you drag your bags to the ticket counter.

Maybe the ticket agent tells you to sit tight and wait. Or maybe the airline offers you a travel voucher, which you can use to buy another plane ticket at a later date.

You don’t have to accept that, though. You don’t have to wait for the next flight. You don’t have to take the voucher. You’re legally entitled to an actual refund — a full refund, no funny business, no random fees taken out or anything. Don’t let them tell you otherwise.

What’s a “significant delay?” There’s no hard and fast rule. Whether you’re entitled to a refund depends on several factors, including the length of the delay and the length of the flight.

Here’s What Else Airlines Are Required to Do for You

The DOT is proposing a rule that would require airlines to proactively inform passengers that they have a right to a refund when a flight is canceled or significantly delayed.

Right now they’re not required to tell you this, so it’s important that you know your rights.

Here are some other rights you have as an airline passenger:

If Your Flight Is Overbooked

Sometimes airlines overbook flights to compensate for no-show passengers. They sell more tickets than there are actual seats.

If too many passengers show up, they’ll ask for volunteers, offering incentives like vouchers and upgrades. If not enough people volunteer to give up their seats, airlines are forced to bump some passengers against their will.

If you get bumped against your will, they owe you money. Here’s what you’re owed if you end up arriving at your destination:

Within an hour of your scheduled time: $0, nada, nothing.

One to two hours late: Double the price of your ticket, up to $775.

More than two hours late: Quadruple the price of your ticket, up to $1,550.

If You Have a Non-Refundable Ticket

This is important: If you bought what’s called a “non-refundable ticket,” you’re still entitled to a refund if your flight gets canceled or significantly delayed. Because that’s not your fault.

The only difference between a non-refundable ticket and a refundable ticket is that passengers who purchase fully refundable tickets are entitled to a refund if they just don’t use the ticket, for whatever reason.

If you have a non-refundable ticket and you miss your flight because you got sick or you were late to the airport, you’re not entitled to a refund. However, many airlines will give you a travel voucher equivalent to the cost of the ticket — as long as you politely explain the problem.

If You Bought Your Ticket Through a Travel Agent

Travel agencies, whether they’re online or in a brick-and-mortar building, are required to refund your money if the airline cancels or significantly delays your flight.

If Your Luggage Gets Lost

Airlines are required to compensate passengers for lost, delayed or damaged luggage, according to DOT rules.

Each airline interprets this differently, but in general, expect a stipend of at least $50 per day to spend on necessities like toiletries and clothing. Just be sure to keep your receipts so the airline can reimburse you later.

If your luggage gets lost permanently, then you’ll need to file a second claim. The airline must compensate you for the value of your luggage, up to $3,800.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.


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