No More ‘On The Fly Refunds’: NJ Lawmaker Pushes For Permanent Changes

NEWARK, NJ — A proposed federal law from a U.S. congressman in New Jersey would prevent airlines from “making up refund rules on the fly,” he says.

On Monday, U.S. Rep. Josh Gottheimer (NJ-5) visited Newark Airport to announce that he is introducing a new bill in the House of Representatives: the Enhancing Transparency from Airlines Act (watch the video below).

According to Gottheimer, so far this year, 126,000 flights in the U.S. — nearly a quarter of America’s flights — have been delayed and another 1,500 have been cancelled. But instead of delivering full refunds, airlines have tended to give their customers vouchers, which are rarely used.

It’s a big windfall for airlines, some experts say. During the pandemic, major U.S. airlines reported that travelers were sitting on more than $10 billion in unused credits because of this policy.

Meanwhile, “baggage fees” have increased by more than 30 percent between 2018 and 2022. It’s a situation that prompted more than 37,000 complaints with the U.S. Department of Transportation (USDOT) in 2023 – many of which cited hidden fees and arbitrary policies regarding refunds.

According to Gottheimer, there are two major components of his proposed law that would help turn the tide of power back to the consumer:

• CASH/CREDIT, NOT VOUCHERS – “First, it requires airlines to provide direct refunds rather than vouchers following a ‘significant diversion’ in flight plans including a major delay (three hours for a domestic flight and six hours for international) or cancellation. The bill will also require refunds for baggage, wi-fi, and seat selection fees when airlines do not follow through with these services. ‘Significant diversions’ would include a three-hour delay for domestic flights and a six-hour delay for international trips.”
• SURPRISE FEES – “Second, it will protect customers from surprise fees when purchasing a ticket, requiring airlines to communicate all fees upfront. The legislation will require airlines to disclose extra fees critical to a passenger’s travel along with the full fare.”

By codifying these rules – which were announced by the USDOT last week – it will ensure that they have some staying power, even in the case of an administration change, Gottheimer said.

“To help address the hide-and-seek game surrounding those hidden or surprise extra fees that get added on to the original price, airlines will now be required to make them clear and transparent up front — they can’t them in fine print or on some hard-to-find place on the website,” Gottheimer said.

“These fees also have to be shown up front, when you search for the fare – not on that last screen right before you check out,” the congressman added. “This is all about promoting ‘fare transparency.’”

• See Related: Shortage Of Air Traffic Controllers In Newark Earns Lawmaker’s Wrath

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