WASHINGTON—A group of nine U.S. Senators urged U.S. carriers to issue full cash refunds to customers for all flight cancellations made during the COVID-19 crisis.
“We believe your company has a moral responsibility to provide real refunds, not travel vouchers,” the senators, all Democrats, wrote in a joint letter to 11 airline CEOs, citing the $25 billion in direct payments made available to carriers by Congress in its recent $2.2 trillion coronavirus stimulus package.
American carriers have added a variety of waivers that permit passengers to change or cancel flights free of cost amid the coronavirus outbreak, although most passengers pursuing this option are awarded travel credits, rather than cash refunds.
“Unfortunately, these travel vouchers do the public little good in this time of emergency, especially when airlines require their redemption in as little as 90 days,” the lawmakers wrote.
While many customers are cancelling their own flights, many others are seeking refunds for flights canceled by carriers as they rapidly clawed back capacity over the past two months. U.S. Transportation Department (DOT) guidelines require cash refunds be offered for all flights canceled by airlines if the passenger chooses not to be rebooked on a new flight.
In situations when airlines make “significant delays” to flights, however, passengers may not be entitled to a refund. DOT does not offer guidance on what defines a “significant delay,” leaving interpretation to airlines and evaluating complaints on a case-by-case basis.
That distinction has bought carriers facing the prospect of massive cash outflows some room to maneuver. United Airlines faced criticism earlier this month for changing its policy regarding refunds to only allow them for flights changed by greater than 25 hours—up from just two hours previously.
Following a series of critical news reports, United revised its policy again. A company spokesperson said customers whose domestic travel is disrupted by more than six hours because of schedule changes by the carrier are now eligible for refunds, while those delayed between two and six hours are eligible to cancel and retain the value of their ticket for future use.
“In the case of special circumstances, travelers can work with our customer contact center to find a resolution,” the spokesperson added.
IATA has been pushing for broad adoption of travel vouchers in place of requiring airlines to refund passengers as a means to reduce carriers’ short-term cash outflows. On a Mar. 31 conference call, IATA director general and CEO Alexandre de Juniac said he was “fully conscious of the inconvenience” to passengers caused by restricting refunds but called the practice “a matter of survival” for the airline industry.
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