If you choose a refund that would be because you opted not to take the flight at all. Assuming it was your outbound flight, that can be reasonable. If it's a return or connecting flight you might have to re-route, in which case a refund might not cover your alternative. This sort of thing really needs a lot of interpretive guidelines. E.g. the EC 261 guidelines are excellent in clarifying this.
re-routing should be offered at no additional cost to the passenger, even where passengers are re-routed with another air carrier or on a different transport mode or in a higher class or at a higher fare(...)
In practice I believe this is usually applied like "If there is availability on the same day on the original airline then book that, else the first available flight on a different airline". Of course in the first case the airline is also on the line for the hotel costs etc.
I don't think the US regulation has the same sort of teeth (yet) but it should at least be made clear. For flights, booking an alternative flight is invariably going to be a lot more expensive than the original one. And regulation that only reimburses the original fare, allows rerouting on the same airline, or doesn't offer cash compensation in addition to sorting out the journey, is pretty bad even if it's a step in the right direction.
re-routing should be offered at no additional cost to the passenger, even where passengers are re-routed with another air carrier or on a different transport mode or in a higher class or at a higher fare(...)
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52...
In practice I believe this is usually applied like "If there is availability on the same day on the original airline then book that, else the first available flight on a different airline". Of course in the first case the airline is also on the line for the hotel costs etc.
I don't think the US regulation has the same sort of teeth (yet) but it should at least be made clear. For flights, booking an alternative flight is invariably going to be a lot more expensive than the original one. And regulation that only reimburses the original fare, allows rerouting on the same airline, or doesn't offer cash compensation in addition to sorting out the journey, is pretty bad even if it's a step in the right direction.