DOT to airlines: Refunds are not optional for canceled flights
The Department of Transportation issued a stark message to airlines that serve the U.S. Friday, reminding carriers that they must provide cash refunds to travelers whose flights are canceled by the airline.
Even the title of the missive was weighty. In its "enforcement notice," the DOT said "carriers have a longstanding obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule and the passenger chooses not to accept the alternative offered by the carrier."
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Demand for air travel has plummeted as a result of the coronavirus pandemic, and airlines around the world have been strapped for cash as they try to maintain their payrolls and meet other operating expenses even as revenue dries up. As a result, many carriers have tried to hold onto cash by issuing vouchers for future travel — instead of refunds — when they have canceled flights.
Related: Airline coronavirus waivers.
That shift has drawn an increasing number of complaints from consumers. Underscoring the growing attention on the issue, a group of U.S. senators weighed in on the subject this week in open letters to airlines executives that implored them to change those policies.
Now, the DOT is making it clear that even the extraordinary circumstances created by the COIVD-19 pandemic are no excuse for airlines to flout the law and that their doing so has not gone unnoticed.
Related: 5 things to know about the $50 billion coronavirus aid package for airlines.
"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 (e.g., a result of government restrictions)," the department said in a statement. "The Aviation Enforcement Office will monitor airlines’ refund policies and practices and take enforcement action as necessary."
The refund regulations apply even when just one segment of an itinerary is canceled, so long as every leg is on the same ticket.
"The requirement to refund passengers includes refunding all unused segments of a single ticket when a carrier cancels or makes a significant change to one or more segment of the passenger’s itinerary, and the passenger chooses not to travel," a DOT spokeswoman said in an email.
The DOT's refund regulations cover only involuntary cancellations made by the airline. Itineraries that are preemptively canceled by a passenger are not.
In Friday's statement, the department did recognize that airlines may struggle to comply immediately with its rules. In its memo, the agency suggested that there would be some leeway in enforcement to give carriers time to get in line, though it did not specify exactly how much slack airlines might get. For now, carriers have been told to contact customers who have been given vouchers for canceled flights to let them know they have an option for a refund.
With the warning issued Friday, a number of airlines might want to reconsider their existing policies.
Among them is JetBlue. It recently announced a “temporary” policy that would bar passengers from a refund even if their flight is canceled, so long as the carrier could accommodate them within 24 hours of their originally scheduled itinerary.
That policy is only in effect until April 15, but it’s unclear whether the DOT would tolerate even a temporary move not to follow its refund rules.
United also has drawn criticism for making refunds harder to get during coronavirus. Most recently, the airline said it would only issue travel credits for itineraries that would usually qualify for refunds, and those credits would become refundable if they went unused after a year.
And, on the international front, Air France and KLM, citing "the high degree of uncertainty surrounding air transportation and the vast number of requests for refunds," have said they would not issue refunds for canceled flights during coronavirus. Those carriers will likely now have to adjust that policy, at least on their services to and from the U.S., following the DOT’s new guidance.
Read more: TSA screenings reflect the travel slump.
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Build your loyalty to Delta by applying for the carrier's mid-tier card option, the Delta SkyMiles Platinum card. The annual fee is quickly recouped by the card's travel perks, such as an application credit to Global Entry or TSA Precheck, annual companion certificate and so much more. Plus you can fast-track to elite status simply through card spend.Pros
- Earn bonus Medallion® Qualification Miles (MQMs) and an Medallion Qualifying Dollar (MQD) waiver when you hit specific spending thresholds with your card within a calendar year
- Receive a Domestic Main Cabin round-trip companion certificate each year
- Statement credit for TSA PreCheck/Global Entry fee (up to $100)
- First checked bag free
Cons
- Doesn't make sense if you don't fly Delta
- SkyMiles aren't the most valuable airline currency
- Earn 90,000 bonus miles after you spend $4,000 in purchases on your new Card in your first 6 months.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights. Plus enjoy Main Cabin 1 Priority Boarding and settle into your seat sooner.
- New: Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Mile on all other eligible purchases.
- Enjoy a per-visit rate of $50 per person for Card Members and up to two guests to enter the Delta Sky Club when traveling on a Delta flight.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees