Cash Refunds for Flight Cancellations Act

This Act may be cited as the “Cash Refunds for Flight Cancellations Act”.

(a) In general.— Section 42305 of title 49, United States Code, is amended to read as follows:

“42305. Cash refunds for cancelled or significantly delayed or changed flights.—

(a) Significant flight delays, changes, or cancellations by the carrier.—

(1) In general.— In the case of a passenger who holds a ticket on a scheduled flight to, from, or within the United States, an air carrier or a foreign air carrier shall, upon request as set forth in paragraph (3), provide a full cash refund, including any taxes and ancillary fees, for the fare such carrier collected for any flight cancelled by the carrier or any significantly delayed or changed flight where the passenger chooses not to—

(A) fly on the significantly delayed or changed flight or accept rebooking on an alternative flight; or

(B) accept any voucher, credit, or other form of compensation offered by the air carrier or foreign air carrier pursuant to subsection (c).

(2) Timing of refund.— Any refund required under paragraph (1) shall be issued by the air carrier or foreign air carrier—

(A) in the case of a ticket purchased with a credit card, not later than 7 business days after the earliest date the refund was requested as set forth in paragraph (3); or

(B) in the case of a ticket purchased with cash or another form of payment, not later than 20 days after the earliest date the refund was requested as set forth in paragraph (3).

(3) Request of refund.— An air carrier and a foreign air carrier shall consider a passenger to have requested a refund if—

(A) a flight is cancelled and a passenger is not offered an alternative flight or any voucher, credit, or other form of compensation by the air carrier or foreign air carrier pursuant to subsection (c);

(B) a passenger rejects the significantly delayed or changed flight, rebooking on an alternative flight, or any voucher, credit, or other form of compensation offered by the air carrier or foreign air carrier pursuant to subsection (c); or

(C) a passenger does not respond to an offer of—

(i) a significantly delayed or changed flight or an alternative flight and the flight departs without the passenger; or

(ii) a voucher, credit, or other form of compensation by the date on which the cancelled flight was scheduled to depart or the date that the significantly delayed or changed flight departs.

(4) Application to ticket agents.—

(A) In general.— Not later than 1 year after the date of enactment of this section, the Secretary shall issue a final rule to apply the requirements specified in paragraphs (1), (2), (3), and (5) and subsection (c) to ticket agents.

(B) Transfer of funds.— The Secretary shall issue regulations requiring air carriers and foreign air carriers to promptly transfer funds to a ticket agent if—

(i) the Secretary has determined that the ticket agent is responsible for providing the refund; and

(ii) the ticket agent does not possess the funds of the passenger.

(5) Refund notification.— Each air carrier, foreign air carrier, or ticket agent shall update their passenger notification systems to ensure passengers owed a refund under this subsection are notified of their right to receive a refund.

(b) Passenger flight cancellation.—

(1) In general.— In the event that a passenger cancels a ticket for a flight not later than 48 hours prior to the scheduled departure of the flight, the covered carrier or ticket agent who sold such ticket to such passenger shall—

(A) offer to the passenger a full cash refund for such ticket, including any taxes and ancillary fees paid; and

(B) provide such refund not later than 30 days after the date on which the passenger makes such cancellation.

(2) Required disclosure.— Prior to the sale of a ticket for a flight to a passenger, a covered carrier or ticket agent shall disclose to the passenger, in writing, that the passenger has a right to cancel their ticket in accordance with paragraph (1) and receive a full cash refund.

(c) Alternative to refund.— An air carrier or a foreign air carrier described in subsection (a) or a covered carrier or ticket agent described in subsection (b) may offer a voucher, credit, or other form of compensation as an explicit alternative to providing a refund required by subsection (a) or (b), but only if—

(1) the offer includes a clear and conspicuous notice of—

(A) the terms of the offer; and

(B) the passenger's right to reject the offer and elect to receive a full cash refund in accordance with the requirements of this section; and

(2) the voucher, credit, or other form of compensation offered as an alternative to providing a full cash refund is redeemable by the passenger at any time and without any expiration or use by date.

(d) Definitions.— In this section:

(1) Air carrier, foreign air carrier, ticket agent, and United States.— The terms air carrier, foreign air carrier, ticket agent, and United States have the meanings given those terms in section 40102.

(2) Covered carrier.—

(A) In general.— The term covered carrier means—

(i) any passenger air carrier that had an operating revenue in the previous year that exceeded $1,500,000,000 according to the Bureau of Transportation Statistics; or

(ii) any passenger foreign air carrier operating a flight to or from the United States.

(B) Inflation adjustment beginning in 2028.— For purposes of applying this paragraph in a year (beginning in 2028), the dollar amount specified in subparagraph (A)(i) shall be increased by the percentage increase (if any) in the consumer price index for all urban consumers (U.S. city average) over the previous year.

(3) Significantly delayed or changed flight defined.— The term significantly delayed or changed flight includes, at a minimum, a flight where the passenger arrives at a destination airport—

(A) in the case of a domestic flight, 3 or more hours after the original scheduled arrival time; and

(B) in the case of an international flight, 6 or more hours after the original scheduled arrival time.

(e) Penalties.— Each violation by an air carrier, foreign air carrier, covered carrier, or ticket agent of the requirements applicable to such carrier or ticket agent under this section shall be subject to a civil penalty under section 46301(a).”.

(b) Clerical amendment.— The analysis for chapter 423 of title 49, United States Code, is amended to read as follows: