Airlines were hesitant to give refunds: now they’re getting sued
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
United Airlines has been sued by a passenger for not refunding a ticket for a flight that was canceled during the coronavirus outbreak.
Passenger Jacob Rudolph alleged that United refused his request for a refund for flights he purchased from the airline that the carrier ultimately canceled.
Rudolph – a Minnesota police officer, according to the New York Post – purchased three tickets at a cost of about $1,500 for his family to fly from Minneapolis/St. Paul to Hilton Head, South Carolina, on April 4 for a vacation. The flights were canceled, and Rudolph said United agents offered him only a voucher – not a refund.
“United has engaged in unfair and deceptive conduct through its policy to issue refunds, limiting and forcing customers into a rebooked flight or travel voucher instead of returning their money,” Rudolph said in the suit, filed Monday in Chicago.
Rudolph is seeking class-action status for his complaint, a move that underscores what a hot-button issue that the issue of refunds for canceled flights has become during the past month.
Air traffic has plummeted to levels that would have been hard to imagine just a few weeks ago. On Wednesday, the Transportation Security Administration screened fewer than 100,000 travelers – less than 5% of that total it screened during the same period a year ago.
For airlines, the implications of that steep drop-off have been dire. Not only have new bookings become virtually nonexistent, but cancellations have soared as travelers stay home amid calls for people to stay home and help “flatten the curve.”
The sudden disappearance of revenue from new tickets coupled with a spike in requests to pay refunds for cancelled flights created a cash crunch for airlines — one that developed with alarming speed.
It also helped create the environment that ultimately set the stage for Rudolph’s suit against United.
Several airlines – both in the U.S. and aboard – tried to discourage travelers from refunds, asking them instead to accept credit for unused travel that could be applied toward future flights. Some carriers made it difficult to find refund information, making customers jump through additional hoops to make a request. And a smaller group simply said refunds would not be issued during the crisis.
With most airlines canceling the majority of their schedules during the pandemic, not offering refunds put some carriers at odds with rules in the U.S. and EU that require refunds for flights canceled by the airline.
United was one of the U.S. airlines that made it difficult to request a cancellation refund. It said it would only offer a voucher that could be applied to future travel. If a customer hadn’t used it in a year, the voucher would expire and the customer could then request a refund.
Complaints from customers began to spike, and eventually regulators stepped in.
In the U.S., the Department of Transportation issued a public rebuke to airlines. It issued a statement on Friday, April 3, that not-so-gently reminded airlines of their legal and “longstanding obligation to provide a prompt refund” for flights canceled by carriers. The agency continued that those who didn’t comply would face “enforcement action.”
The International Air Transport Association – world’s largest trade group representing the airline industry – soon responded that it was “deeply disappointed” by the DOT’s decision.
“Passengers have the right to get their money. They paid for a service that cannot be delivered. And in normal circumstances, repayment would not be an issue,” IATA chief Alexandre de Juniac said in a blog post the same day of the DOT’s statement.
“But these are not normal circumstances. If airlines refund the $35 billion immediately, that will be the end of many airlines. And with that an enormous number of jobs will also disappear,” he said.
But the DOT’s marching orders were clear. As a result, a number of airlines that hoped that the current extraordinary circumstances would give them some wiggle room are likely quickly figuring out how to come into compliance.
Now, at least one airline is facing additional pressure from customers like Rudolph, who are taking them to court over the issue.
As for United, spokeswoman Leslie Scott told TPG on Wednesday that the company could not comment on the suit since it had not yet been served with the complaint.
But she said United has been doing its best to help customers.
“Since the start of the COVID-19 health event we have implemented new policies to give our customers flexibility during these extraordinary times by allowing them to change their travel plans without a fee,” she said in a Wednesday statement. “We are proud of the role our company and our employees play during this crisis and continue to operate to nearly every domestic destination as well as six international markets across the globe including our partner hubs.”
Featured photo by Niall Carson/PA Images via Getty Images.
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.