US GOVT To Airlines: Refund Your Passengers, Period!

There has been a lot of talk about airline refunds over the past few weeks. If you’re a customer that is attempting (or attempted) to get a refund from the airlines for a canceled flight, there is some good news for you.

BACKGROUND

If you’re not aware of what has been happening, particularly over the last two weeks or so, here is the simple version:

COVID-19 has been wreaking havoc on the airline industry. Airlines have been attempting to trim their expenses so they’ve been canceling A LOT of scheduled flights. Obviously, that leaves A LOT of customers in a unique position because they have scheduled flights that have now been canceled.

At this point, the equation becomes a bit more complicated because the The US Department of Transportation (DOT) says, if an airline flight doesn’t operate a flight, we (the passengers) can get a refund.

In fact, here is the law per the DOT:

If your flight is cancelled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets.  You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.

That sounds simple enough except EVERYONE is canceling their flights and if everyone asks for a refund, the airlines don’t have any money (e.g. pay for gas, pay employees, pay on loans for planes, etc.)

Given the situation, airlines have been so desperate to conserve cash that many have made it as hard as possible to get refunds. Some have been misleading consumers into believing they aren’t entitled to one, updating their websites and deleting the refund links, burying/hiding the refund links deeper into their website pages, offer vouchers, or just outright refusing.

DOT CLARIFIES THE LAW

Friday evening, the US DOT issued an enforcement notice, reminding airlines that they need to refund passengers in the event that their flights are canceled and/or there are significant schedule changes. As the enforcement notice states:

• The DOT has seen an increase in consumer complaints related to flight refunds
• Customers are entitled to a cash refund when the airline cancels a scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered
• This applies for flights operated by US and foreign airlines TO, WITHIN, OR FROM THE UNITED STATES
• Because this is an unprecedented situation, the DOT will exercise enforcement discretion, and will give airlines the opportunity to become compliant before taking further action

As you can see from the highlighted section, this applies even to foreign airlines flying to the US.

NEXT MOVE BY AIRLINES?

This doesn’t represent a change of policy, but has been the (unenforced) policy all along.

We’ve seen countless airlines try to get away with offering vouchers rather than refunds and among the BIG US3, United Airlines has been the absolute worst! There have been countless stories of United not only refusing to refund but also charging customers cancelation fees and/or redeposit fees for award tickets. A DOUBLE WHAMMY!

FINAL STAMP

It’s great to see the DOT step in, clarify the rule, and put the airlines on notice that they (the airlines) need to refund passengers for cancelled flights or significant schedule changes…even under the extreme circumstances we find ourselves in.

Does that actually mean anything or is this lip service? I’m not sure but I imagine and hope airlines will be forced to take action.

As I’ve said before, I understand the position the airlines are in but holding money hostage (particularly without providing a service) is the exact definition of theft.

I’ll be curious to see how what happens.

What do you think about DOTs clarification?