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(From Guardian Unlimited)
My flight has been cancelled, what happens now?
Under European law your airline is obliged to offer you a choice: you can either cancel your booking and get a refund, or rebook on a new flight. The refund should be made within seven days (although some passengers who had flights cancelled in December's bad weather are still waiting for their money); rerouting should be as soon as possible, unless you agree to reschedule for a later date.
If you opt for rerouting the European Consumer Centre for Services says you should be entitled to meals and refreshments, hotel accommodation (if necessary), transport between airport and …