Airline passengers who experienced delayed or canceled flights at the Bay Area’s three major airports would have been eligible for nearly $130 million in refunds from airlines last year if a new federal rule had been in place.
That’s according to a new study from the airline perk website Upgraded Points, which looked at the U.S. airlines and airports most impacted by a new Department of Transportation (DOT) rule that requires airlines to refund passengers immediately if their flight is canceled or delayed by more than three hours. The study lays out the financial fallout using 2023 flight data.
“This change aims to simplify the process and empower passengers by guaranteeing swift cost recovery with navigating complex airline policies or lengthy disputes,’’ said Alex Miller, the founder and CEO of Upgraded Points in a web posting. “The rule mandates airlines to issue refunds in the original payment method for canceled or significantly changed flights, delayed baggage delivery and undelivered services.”
Here in the Bay Area, the study shows that more than 3,300 flights were delayed or canceled at San Francisco International Airport (SFO) last year. Under the rule, airlines would have paid out more than $102 million in refunds to flyers.
At the San Francisco Bay Oakland International Airport (OAK) (formerly Oakland International Airport) travelers would have been entitled to roughly $12 million as 700 flights were impacted last year. And at San Jose Mineta International Airport (SJC) roughly 760 delayed or canceled flights would have cost airlines about $14 million last year.
In a statement, San Jose said the study was focused on airlines not airports, saying data “shows that SJC is one of the most reliable airports in the nation, with the Wall Street Journal naming it the best mid-size airport in the U.S. and scoring highest in reliability among the 50 mid-size airports measured.”
Passengers departing from Dallas Fort Worth International Airport (DFW) would have been entitled to an estimated $267 million in refunds had the new rule been in effect last year, the most for any U.S. airport. Passengers taking off from Newark Liberty International Airport (EWR) would have seen the second most refunds for a total of $201 million, followed by those traveling from Denver International Airport (DEN) at $199 million, according to the study.
Unless passengers opt for alternative compensation, airlines will no longer be allowed to issue refunds in the form of travel vouchers or credits—both of which often have expiration dates. Airlines have until Oct. 28 to make the changes under the new rule.
While the new regulation provides some peace of mind for air travelers, the rule’s overall financial impact on airlines and customers is unclear, according to the study. Airlines could respond by adjusting their operations, pricing strategies or a combination of both, the study shows.
Airlines for America, (A4A) an aviation trade group, says the new regulation could reduce competition and ultimately drive up prices for travelers.
“A4A members offer a range of options—including fully refundable fares—to increase accessibility to air travel and to help customers make ticket selections that best fit their needs,” the group said in a statement. “Consumers are given the choice of refundable ticket options with terms and conditions that best fit their needs at first search results.”
Nationally, the Biden administration said in a statement that the new rule expands on travel-related consumer-protection policies already in place.
“DOT has advanced the largest expansion of airline passenger rights, issued the biggest fines against airlines for failing consumers, and returned more money to passengers in refunds and reimbursements than ever before in the Department’s history,” the statement said.
JetBlue was the airline that received the worst grade in the study. On a percentage basis, JetBlue was the most impacted of all major carriers. JetBlue did not immediately respond to a request for comment.
The study said that last year, an estimated 5.9% of its flights would have been eligible for automatic refunds under the new regulations — nearly double the national average of 3.0 %.
Alaska Airlines saw the lowest disruption rate with 1.6% of its flights in 2023 canceled, diverted, or delayed more than three hours.