Airlines Ordered to Refund Cost of Flights Canceled by Virus
[Ensure you have all the info you need in these unprecedented times. Subscribe now.]
Airlines must fully refund airfare to passengers whose flights have been canceled during the outbreak of COVID-19, the U.S. Transportation Department ordered on April 3.
The DOT is receiving growing numbers of complaints from people who say airlines have refused to pay refunds after flights were canceled, the agency said in a press release and an enforcement notice.
“The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control,” the agency said.
The policy also applies when an airline “makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier,” DOT said.
The order threatens to add more financial strain to an industry that is facing severe challenges from a dramatic plunge in demand even as it prepares to start receiving $50 billion in loans and payroll assistance payments contained in a government bailout package.
As of April 2, passenger traffic had fallen about 95% compared with a year ago, according to the Transportation Security Administration. Only 124,021 passed through security that day compared with 2.4 million on the equivalent weekday in 2019.
In response, airlines have canceled thousands of flights a day and cuts are expected to remain for weeks or longer.
Instead of giving passengers their money back, they have been told by airlines they would only receive vouchers or credits for future travel, the department said in the release.
The rules requiring refunds have been in place for decades, according to DOT. They have been enforced after previous disruptions to the aviation system, such as the Sept. 11, 2001, terrorist attacks and Hurricane Katrina in 2005, the agency said.
The trade group for major carriers, Airlines for America, didn’t immediately respond to a request for comment on the DOT action.
Initially, the government is giving airlines the opportunity to comply with the law on their own, the DOT said. “However, the Aviation Enforcement Office will monitor airlines’ refund policies and practices and take enforcement action as necessary,” it said.
Want more news? Listen to today's daily briefing:
