The American Society of Travel Advisors’ (Asta) appeal to the US Department of Transportation (DOT) regarding an amendment of its Final Rule has been denied. This means that travel agents will become liable for providing refunds for cancelled or delayed flights in cases where they are the merchant of record.
The Federal Aviation Administration (FAA) Reauthorization Bill, which was passed by the Senate on May 9 and Congress on May 15, states that ticket agents who are merchants of record (a legal entity that handles payments) will become responsible for refunding flights that passengers are unable to take.
In response, Asta requested the DOT to revise its proposal and require merchants of record to issue refunds only when they receive confirmation of refund eligibility. It has also urged the Department not to impose refund deadlines on ticket agents.
Despite strong opposition from Asta, the DOT’s regulation, guided by the FAA’s Reauthorization Bill and the demands of the Aviation Consumer Protection Advisory Committee, will come into effect in six months, announced DOT.
“We agree with DOT that for far too long, consumers have borne the brunt of airlines’ bad behaviour. Fortunately, those who use a travel adviser know they have someone in their corner working tirelessly to obtain their refund when travel plans go south. But to put the onus of providing that refund on small business merchants of record will be catastrophic to this industry,” Asta President and CEO, Zane Kerby, said in a press release.
Kerby explained that the rule would negatively impact the women-owned, small-business travel agencies that sold 40% of all airline tickets in 2023.
“Consumer protection could have been accomplished without sacrificing the interests of small business travel advisers who work diligently every day on behalf of the travelling public,” says Kerby.
“Requiring advisers to extend credit from their own pockets to pay airline refunds is a gross misplacement of responsibility that must be rectified.”
Asta says that pursuing amendments to the Bill will be a priority on the agenda at its Legislative Day in September.
“This will be the first item on the agenda in those congressional meetings. Travel advisers will want to know how their lawmakers plan to address this significant oversight,” concluded Kerby.
