Are airline refunds automatic now? For this canceled American Airlines flight, they weren't

All Rhonda Bryant wanted was a refund for her airline ticket. She'd booked three tickets with American Airlines for a trip from Portland, Maine, to San Francisco. But when American canceled her connecting flight from Charlotte to San Francisco after hours of delays, her plans fell apart. 

And then American refused to return her money, despite a new federal rule that requires an automatic refund.

American returned only $661 for one leg of the journey but withheld $403 for the flights she never took. Her seven-month fight to recover the rest of her money -- and American’s shifting explanations -- reveal a messy reality behind the federal government's push to strengthen passenger protections last year. 

It also raises questions airlines probably don’t want you to ask: 

• When does the Department of Transportation require airlines to issue full refunds?  

• How should travelers escalate a refund request when an airline ignores them?  

• Why do companies make resolving billing errors so difficult?  

But first, let's take a look at the details of this refund case.

Is this a trip in vain?

Bryant’s ordeal began last spring. After they arrived in Charlotte, her family’s flight to San Francisco faced repeated delays before being axed. Bryant returned to Maine the next day. 

She requested full refunds under a new rule, which mandates a refund when your airline cancels a flight and you don't accept a rebooking. 

American Airlines refunded two tickets promptly. But it balked at refunding the $403 for one of the return legs, erroneously claiming the outbound flight from Portland to Charlotte had been “fully used.”  

Over six months, Bryant navigated a maze of calls, online forms, and a U.S. Department of Transportation (DOT) complaint. 

American’s responses ranged from blaming the weather to demanding written permission to discuss the ticket (that's a common tactic used by European airlines). Three months later, an American Airlines customer relations agent called the cancellation “beyond our control” and refused to issue a refund.  

"I've made numerous calls and online submissions requesting full refunds for our three tickets," she wrote in an email to my advocacy team. "Can you help me?" 

This looked like a slam-dunk case for my advocacy team. Bryant needed to be in San Francisco for an event, which she missed because of the American cancellation. The airline had refunded some but not all of her tickets, which suggests a simple accounting error. And, of course, there was the new federal rule. The refund should have been automatic. Right?

When does the federal government require airlines to issue full refunds?  

The Department of Transportation’s 2024 rule clarifies refund rights: Passengers get money back if they miss trips due to cancellations or delays of three hours (domestic) or six hours or more (international).

Most importantly, the rule applies even if the disruption stems from weather or other “uncontrollable” issues.  

American initially stonewalled Bryant by citing bad weather -- a classic dodge. But the rule doesn’t care why your flight got canceled. If you bail because of a major schedule change, you’re owed a full refund, not just vouchers.  

But wait. Bryant did fly from Portland to Charlotte before turning around and flying home. She used part of her ticket. Isn't American Airlines right?

Not really. Airlines like American have "trip in vain" policies. Here's American's rule:

"When a customer is flown to an intermediate point, through stop point, or lands in a diversion city due to an irregular operation, which may not get them to their final destination, they may choose to discontinue their journey and return back to their origination city," it notes.

Translation: If they can only get a passenger halfway to their destination, as was the case with Bryant and her party, it wouldn't count as a used ticket. 

In fact, it's commonly understood in the airline industry that "almost" doesn't count, and that a trip in vain such as the one Bryant took would not count as a half-used ticket.

How should you escalate a refund request when an airline ignores you?  

Bryant’s paper trail -- 14 emails, a federal complaint, and a letter -- shows an exhaustive escalation ladder over almost seven months.  

Here's the process: 

• Always start with the airline’s customer service, and in writing. 

• No luck? File a Department of Transportation complaint, which forces a response within 30 days. 

• Still nothing? Contact your credit card issuer to dispute the charge. As a last resort, loop in a consumer advocate or attorney.  

But timing matters. Bryant waited 48 days after American’s final rejection to seek help, close to the 60-day limit required under the Fair Credit Billing Act for credit card disputes. You want to be patient, but not that patient. 

I outline the steps to a faster consumer resolution on my advocacy site.

But there's a bigger question here: Why is this even happening?

Why do companies make resolving billing errors so difficult? 

American’s runaround -- demanding redundant paperwork, slow-walking responses -- isn’t accidental. The more hoops it makes customers jump through, the fewer refunds an airline has to pay. 

And even knowing the rules is only step one of what could be a tedious journey. A 2023 study by AirHelp found 71 percent of passengers eligible for flight compensation never claim it. Why? Half called the process “too complicated.”  Most people quit after the first "no." That's why the government instituted a new rule in 2024.

But was that rule enough? No. The government implemented the rule just after her flight, and she fought American Airlines just as a new administration took over -- an administration that appeared to have little interest in enforcing the new rule.

It's likely that if my advocacy team hadn't gotten involved, Bryant would have lost the $403 she spent on her ticket to San Francisco. But that's not how this case ended. We contacted American Airlines on her behalf, and it issued a full refund.

Based on this case and several others, it's clear that the new rule requiring an automatic refund may be unenforced for the next four years. My advocacy team and I hope that's not the case, but we are ready if it is.