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February 10, 2014

The 24-Hour Airfare Reservation Cancellation Rule Revisited

Filed under: Travel — Edgar (aka MrConsumer) @ 6:01 am

airplane Last week, we scolded JetBlue for not being as generous as some other airlines if a consumer wants to cancel a ticket purchased within the past 24 hours. JetBlue follows the federal rule to the letter, and only grants a full refund for tickets bought at least a week in advance of the flight and is cancelled within 24 hours of purchase. Delta and US Airways, on the other hand, don’t impose that seven-day in advance restriction. They let you cancel within 24 hours of purchase, irrespective of the actual travel date, and get a full refund.

Mouse Print* checked with a few other airlines to see what their policies were and learned that American Airlines seemed to have a strange application of the federal rule.

Here is the actual federal rule from the Department of Transportation, requiring each airline to adopt a customer service plan that covers certain things, including:


“(4) Allowing reservations to be held at the quoted fare without payment, or [emphasis added] cancelled without penalty, for at least twenty-four hours after the reservation is made if the reservation is made one week or more prior to a flight’s departure;”

Most people would read that to say whether the customer merely makes a reservation OR actually purchases a ticket, and they cancel within 24 hours of making that reservation, they are entitled to do so without penalty (as long as the reservation was made at least seven days in advance).

That is not how American applies the rule. If you buy a nonrefundable ticket on their website at 10 am today but decide at noon that you want to cancel the reservation, American will charge you a $200 penalty/fee. If, on the other hand, you merely want to make a reservation today and lock in the price shown, they will allow you to do that without having to purchase the ticket until 11:59 pm the next day.

They take the word “or” literally in the federal rule, and interpret the rule to require them to EITHER hold a reservation free for 24 hours OR provide a refund for purchased tickets cancelled within 24 hours of the transaction. They chose the former.

What does the Department of Transportation say about such an interpretation? They agree!


8. Does a carrier have to offer a consumer the opportunity to either “hold a reservation for 24-hours without payment” or to “cancel a reservation within 24 hours without penalty?”

No, a carrier is not required to offer both options. But if a carrier accepts reservations without payment, it must allow the consumer to cancel the reservation within 24 hours without penalty, and if the carrier requires payment with a reservation, it must allow the consumer to cancel the payment and reservation within 24 hours and receive a full refund.

Wow. How anti-consumer.

The lesson is that there is no blanket 24-hour right to cancel airline reservations, and therefore you have to check each airline’s policy before you buy.

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  1. I’m assuming American Airlines’ lawyers had a thorough reading of the federal rule to see where they had opportunities to be shifty and deceive customers. I understand that companies exist to make money, but do they really have to hate customers too?

    I’m guessing that not many customers opt for a refund because this policy would have likely blown up in American Airlines face if many people started complaining (especially to the media).

    Comment by Wayne R — February 10, 2014 @ 7:20 am
  2. Well, I’m sure the airline lobbyists are the ones that wrote the policy and the government passed it.

    Comment by Max — February 10, 2014 @ 8:14 am
  3. Recently had a flap with American Airlines for a flight to Manchester UK in June; canceled within the 24 hours. They charged my AMX card anyway, called and supposedly had a nice rep. “take care of it,” said it should come off the bill in 7 -10 days. We’ll see.
    I was disappointed because American shunts you to British Air, this from Boston, instead of using their own planes. I think Brit Air seats are tighter, and as I couldn’t book a particular seat, I opted out, even hanging on to a phone conversation for awhile until it became untenable.

    Comment by Dennis — February 10, 2014 @ 8:20 am
  4. Wayne R:

    “but do they really have to hate customers too?”

    How many people really like their cable/satellite provider or their cell phone company? Those companies seem to hate their customers also. I think they think we are doing a favor to them by paying outlandish bills every month, only to nickel’ed and dime’ed with petty charges.

    Dennis’ comments: The airlines have you over a barrel for longer distance travel. There are only so many ways to get from Boston to Manchester, and they know it.

    Comment by bobl — February 10, 2014 @ 3:00 pm
  5. @bobl: I LOVE my cell phone carrier. I have T-Mobile prepaid. There’s no contract, no activation fee, no termination fee and no hidden fees. This last one means that outside of sales tax, all taxes and fees are includes. While the typical bell phone bill will be 20 – 30% over the advertised price due to taxes and fees, there’s none of that here. Metro PCS (owned by T-Mobile) appears to be the same. I hated my first two cell phone carries. But now I’m so happy.

    Comment by Marc K — February 13, 2014 @ 7:53 pm

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