The new U.S. airline rules on fees and refunds are the talk of the travel world. Here’s what to know.

Up in the air and on the ground, travelers are talking about the new rules from the U.S. Department of Transportation regarding mandatory airline refunds and the agency’s war on junk fees.

On Wednesday, Transportation Secretary Pete Buttigieg announced two new rulings that will help many travelers when they are shopping for plane tickets — and when their flights get canceled or delayed.

The first rule mandates automatic cash refunds if a flight is canceled or significantly delayed by more than three hours. Travelers also would have the option of accepting an airline’s offer of alternative transportation or airline credit.

The refund rule also applies to baggage fees if a checked bag is not returned within 12 hours. Further, airlines must refund passengers who paid for Wi-Fi, seat selection or in-flight entertainment if the services are not provided.

Another important component in the refund rule is a provision to allow travelers to cancel their flights if advised by a medical professional not to travel due to a serious communicable disease (like COVID-19). In these cases, airlines can issue travel credits — but they must be transferable and valid for five years.

The second rule requires airlines to disclose all mandatory fees prominently at the time the fare is first displayed. The rule also mandates that airlines disclose charges for a carry-on bag, for a first or second checked bag, or to change or cancel a reservation.

“As part of the rulemaking process, DOT determined that extra fees have become more complex over time and continue to confuse passengers, requiring additional action,” according to a statement announcing the new rules.

The first rule, on refunds, is an attack on the practice by airlines of offering only travel credits or vouchers when flights are canceled. Often these credits are non-transferable, even if the traveler did not pay for the tickets. Also, the credits are only valid for one year. The airline keeps the money if you cannot use the credit.

The second rule, on surprise junk fees, is part of the Biden administration’s war on such fees. Although it’s not included in this new rule, the DOT plans to issue an additional rule banning airlines from charging families extra fees just to sit together. There is a provision in this week’s rules, though, that mandates airlines must advise travelers that they need not purchase a seat. If they buy a ticket on the flight without paying extra for a seat assignment, a seat will be assigned at check-in.

What the rule doesn’t say but frequent travelers know is this: The seat you’ll receive likely is at the back of the plane, in the middle, next to the potty. But hey — it’s a seat.

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Rules for flights, particularly for the cheapest of the cheap seats, change all the time. Most recently, Alaska Airlines started awarding just 30% of the miles flown to frequent flyers if they buy a Saver ticket. Delta Air Lines doesn’t award any miles at all for Basic Economy travelers.

These new rules are designed primarily to aid the infrequent traveler, who may be unfamiliar with all of the extra fees and charges offered by airlines today.

“These rules are long overdue,” said travel consumer advocate Christopher Elliott. “These rules are going to help a lot.”

Elliott has dealt with thousands of airline complaints, including one case where it took four years to get a refund.

Airlines are regulated at the federal level — and one popular regulation is the 24-hour rule. That is, once you make a reservation and pay for it, you have 24 hours to change your mind and cancel without penalty.

Well, travel writer John DiScala (aka “Johnny Jet”) took advantage of this clause when booking a trip to see family in Canada. After booking the trip for his family, he and his wife discussed the plans. That evening, he went back to cancel. But Air Canada didn’t get the memo — and tried to keep some of the money. DiScala wrote about the struggle to get his money back — even though there was a rule on the books!

For their part, the airlines have been mum on the new rules, deferring to their lobbying outlet, Airlines for America. Airlines for America members include Alaska Airlines, Delta Air Lines, American Airlines and United Airlines, among others.

Last year at a DOT hearing, Doug Mullen, Airlines for America’s deputy general counsel, panned the proposed rules. “Very few, if any, need or want this information, and especially when they are initially trying to understand schedule and fare options,” said Mullen. Further, Mullen suggested the rules would only cause “confusion and frustration.”

It’s not a stretch to conclude that it’s the airlines themselves that fomented the “confusion and frustration” Mullen warns of, with the ever-increasing fees that pop up at every turn.

The new rules, which will take effect within 60 days, apply to all airlines that fly to, from or within the U.S. That includes Condor Air, Discover Airlines, Air Canada, Sun Country and other carriers that fly here in the summer months.

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The rules also apply to air carriers that fly within the state of Alaska, many of whom are limited to nine seats per flight under the FAA’s Part 135 rule.

Grant Aviation flies a fleet of Cessna 208 Grand Caravan planes between Kenai and Anchorage. Many of the provisions in the new rules won’t apply to him.

“We let our passengers carry 100 pounds of luggage for free,” said Rob Kelley, the carrier’s president.

“We don’t ever want to lose that personal touch — and we bend over backward for our customers,” he said.

That includes offering new flight offerings or refunds in case of cancellations or delays.

“We don’t have any problem with the motives behind the rules,” said Kent Craford, president of Alaska Seaplanes in Juneau. “But we aren’t set up for the reporting. We’re not American Airlines. It’s going to take time to get software developers who can make the changes so we can comply.”

“Most of the smaller carriers in Alaska already are doing this stuff already,” said Matt Atkinson of Wright Air Service in Fairbanks. “If someone wants a refund, that’s OK with us. But the new rules don’t seem relevant to what we do.”

The new rules from the DOT only apply to flights where the airline caused the delay or cancellation.

Airlines are not the only companies with junk fees or questionable business practices. However, the DOT can regulate airlines. It cannot regulate car rental companies or hotels, where junk fees continue to pile up. The Federal Trade Commission claims oversight for these categories.

“There’s a lot more work to be done and it goes across several industries,” said Christopher Elliott.