New legislation designed to protect travel agencies from airline refund liabilities deemed unfair has been welcomes by trade body the American Society of Travel Advisors (ASTA).

The Flight Refund Fairness Act was introduced by Republican representative for Florida Maria Salazar and won bipartisan cross-party support.

Under current Department of Transportation rules, travel agencies can be forced to issue refunds when airlines cancel or significantly alter flights even though these agencies have no control over the decision to cancel or change a flight and are not in possession of the funds.

The Flight Refund Fairness Act requires airlines to assume full responsibility for refunds and remit funds back to ticket agents on the same timeline of seven days that applies to consumer reimbursements.

ASTA president and chief executive Zane Kerby, said: “Travel advisors are consumer advocates. They navigate complex rules and fight for rightful refunds for their clients.

“But the current regulatory structure threatens the financial viability of many travel agencies – 95% of which are small businesses – by placing the refund burdens on agencies.

“We applaud the original cosponsors of this legislation, led by representative Maria Salazar, for recognising this inequity.”

ASTA said small travel agencies, 80% of which are women-owned and which focus on group travel, are the most affected by the current DOT regulations.

By ensuring that airlines, not travel advisors, bear responsibility for refunds when flights are cancelled or significantly changed the new law is expected to protect small businesses from unrecoverable costs while preserving consumer rights.

The bill requires airlines to return funds to ticket agents in a timely fashion, aligned with consumer refund deadlines and ensures that travellers continue to have clear, reliable reimbursement pathways.

Rep Salazar said: “Miami is the premier tourism hub and the small businesses that support this industry must be protected.

“I’m proud to reintroduce the bipartisan Flight Refund Fairness Act, which will remove a regulatory hurdle for small travel advisors that may otherwise jeopardize business operations, while ensuring consumers are able to get any potential refund in a timely manner.”