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Policy Integrity Suggestions Reflected in DOT’s Final Rule Requiring Automatic Refunds of Airline Tickets

On April 24, 2024, the Department of Transportation (DOT) issued a final rule on airline ticket refunds which, among other things, will require airlines to offer refunds when a passenger’s itinerary is significantly changed or delayed, and will require that passengers be given a ticket voucher if a serious communicative disease prevents them from flying. We submitted comments to DOT in November 2022 explaining that, in our view, DOT’s benefit-cost analysis was underestimating the benefits of these policies. DOT’s finalized analysis discusses our comments extensively, and implements many of our suggestions. In particular, the revised analysis acknowledges that providing travel vouchers to contagious consumers could decrease the likelihood that they travel, and examines the potential benefits from reduced disease.