MW Thousands of flight cancellations could mean record cash refunds for stranded passengers under this new rule
By Genna Contino
Winter-weather cancellations will be the first major stress test for a new automatic-refund rule for airlines
Thousands of U.S. fights were canceled in the wake of a massive winter storm that whipped snow and ice across the country.
Thousands of flights were canceled Monday following intense winter weather that hit two-thirds of the U.S. over the weekend - and experts say the travel chaos could continue throughout the week.
More than 5,000 flights were canceled early Monday afternoon, according to FlightAware, bringing the total number of cancellations since Friday to more than 23,000. Airports in and around Boston, Dallas, Charlotte, N.C., and New York experienced the most cancellations on Monday.
The widespread cancellations will be the first major stress test for airlines since the U.S. Transportation Department implemented its automatic-refund rule in October 2024, according to Katy Nastro, a travel expert and spokesperson for the travel app Going. The rule requires airlines to provide a full refund to passengers if their flight is canceled, without them having to explicitly request one. Airlines are only required to provide the refund to passengers who didn't accept an offer from the airline for alternative transportation or travel credits.
Read more: Air travelers experience pandemic-like flight cancellations. And it's not over yet.
"This is the first big moment where a lot of people, because they've gotten canceled, they just opted to take a refund," Nastro said. "I'm really curious to see if airlines can comply and are able to process this amount of refund requests that they're potentially seeing."
Airlines must issue refunds within seven business days for credit-card purchases, and within 20 calendar days for other payment methods, according to the DOT.
Airline stocks were trading slightly lower Monday afternoon, with the U.S. Global Jets ETF JETS down 0.5%. Shares of American Airlines $(AAL)$ were down 0.5%, while Delta Air Lines $(DAL)$ was shedding 0.4% and United Airlines $(UAL)$ was losing 0.2%, at last check.
Adding to the uncertainty over the current weather delays is the looming threat of a federal funding lapse. The Federal Aviation Administration would face a partial shutdown after Friday if the U.S. Senate doesn't pass funding for the agency. The federal government is looking at a partial shutdown, with just six of 12 annual spending bills presently signed by President Donald Trump.
From the archives (Sept. 2025): How you can still get a refund for a delayed or canceled flight even as Trump scraps Biden's airline compensation proposal
Air-traffic controllers were required to work without pay during the last U.S. government shutdown, a historic 43-day closure in late 2025. Staffing shortages at major airports led to flight reductions.
Senate lawmakers return to Washington on Tuesday. Democrats are vowing to oppose a funding bill for the Department of Homeland Security, after a Minnesota man was shot and killed by a U.S. Border Patrol officer over the weekend. If senators don't act by Friday at midnight, funding for Homeland Security and other agencies will lapse.
Only 151 flights had been pre-emptively canceled for Tuesday as of early Monday afternoon, but that doesn't mean all travel woes will be resolved overnight. Low temperatures across the U.S. are making it difficult to return to normalcy, Nastro said, though airlines are working hard to get displaced passengers where they need to go.
Read more: This video of an angry United Airlines passenger shows how competitive boarding a plane is now
"This is going to take a few days to get better," Nastro said. "I like to think of this as a sunburn: The first day you get it, it's really bad. Day after day, it does get a little bit better, but there's still a burn."
If a flight is canceled due to weather, passengers have the option to rebook with the airline on a new flight or receive a refund. Passengers are not entitled to additional compensation on top of rebooking a new flight.
Many major carriers are providing passengers with winter-travel waivers that allow them to reschedule flights without having to pay a change fee, which can cost up to several hundred dollars without a waiver.
"If you had purchased a ticket, say, last week, and now your flight is today, this evening or even early tomorrow, see what is the latest possible flight that you can get on that won't disrupt your plans, just to give yourself the best odds of getting out and getting out on time," Nastro said.
Robert Schroeder contributed.
-Genna Contino
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 26, 2026 14:39 ET (19:39 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments