US senators push for full refunds — not vouchers — for canceled flights

Apr 2, 2020

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Travelers around the globe have had travel plans upended by the coronavirus pandemic, which has led to widespread stay-at-home orders and even broader national travel restrictions as countries try to limit the spread of COVID-19.

For air travelers, cancellations and postponed trips have become the rule of the day.

Airlines were quick to roll out flexible rebooking policies. While that flexibility initially was welcomed by travelers, there have been an increasing number of complaints by passengers who claim airlines have made it impossible to get refunds — sometimes even against U.S. laws that require it.

It’s no secret that airlines have been hard-hit by the downturn, but now a group of Democratic senators is now speaking up. They argue that some U.S. carriers are prioritizing their own efforts to hold onto cash over the needs of their ticketed passengers.

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In open letters to the CEOs of 11 U.S. airlines, the group of senators has said that the companies have “a moral responsibility to provide real refunds, not travel vouchers, to consumers” at a time when so many people are facing unemployment and struggling to pay for basic necessities amid a widespread economic downturn.

The signatories of the letter include Sens. Bernie Sanders, Elizabeth Warren, Amy Klobuchar and Kamala Harris. They acknowledge that airlines have taken unusual steps to waive fees for changing tickets and canceling flights during the pandemic, but say that their constituents who choose to cancel are generally only being issued travel vouchers and not cash refunds.

Related: You are entitled to a refund for your canceled flight — even if the airline says you aren’t.

“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 letter says. “Americans need money now to pay for basic necessities, not temporary credits towards future travel.”

The senators also raised concerns that airlines are also holding back refunds, even when they cancel the flight themselves. Under Department of Transportation rules, travelers are entitled to a cash refund if an airline cancels their flight, but many airlines are issuing travel vouchers in those circumstances as well. 

The vouchers appear to be an effort by airlines to conserve cash at a time when the industry is facing an unprecedented drop in demand. Certain carriers are even offering bonuses — such as a 20% in extra value added to the original price of a ticket — for customers who accept bonuses over refunds. Some airlines also have faced allegations that they’re making it difficult for customers to request refunds. 

“Airlines’ incentive to offer vouchers instead of cash refunds is to preserve precious liquidity. It’s just that simple,” Robert W. Mann, an industry analyst, said in an email. “I understand the customer argument about ‘unique circumstances’, but so too are airlines continuing to try to operate under those same unique circumstances, the largest ones losing tens of millions of dollars per day, while trying to get necessary and public health personnel and materiel to where they are needed.”

Passenger aircraft operated by Air France-KLM Group, right, and a KLM jet sit on the tarmac at Schiphol Airport, operated by the Schiphol Group, in Amsterdam, Netherlands, on Tuesday, Jan. 19, 2016. Air France-KLM Group, ranked as Europe's biggest airline since its formation in 2004, is teetering toward an exit from the industry's top tier after a year in which efforts to slash costs foundered on union opposition. Photographer: Jasper Juinen/Bloomberg via Getty Images
(Photographer: Jasper Juinen/Bloomberg via Getty Images.)

At least one airline group, Air France-KLM, was transparent about its reasoning for issuing vouchers for canceled flights, even though doing so goes against regulations for service to and from the U.S., and its normal cancellation policy.

Related: Why you should think twice before accepting an airline voucher — even with a bonus.

Citing “the vast number of requests for refunds” the airline group said it is “being forced to depart from its normal practice” and issue only vouchers for canceled flights. Those vouchers will become refundable if they go unused in 12 months, the airlines said, but that’s cold comfort for passengers who need the cash to pay for basic necessities now. Air France-KLM was not among the recipients of the letter from the senators.

While the senators’ letter was addressed to the CEOs of the biggest U.S. airlines, travelers have lodged complaints about refunds on both domestic and foreign carriers that serve the U.S. It remains to be seen what enforcement action the U.S. DOT might ultimately take on the issue, though Canada just rolled back some of its consumer protections in favor of airlines as the pandemic affects travel there.

In that letter, the senators asked airline executives to commit to providing cash refunds to all travelers who cancel their itineraries as a result of the coronavirus pandemic. As a less-desirable alternative, they also proposed making travel vouchers have an unlimited validity period, as opposed to expiring after a fixed period of time.

Related: The latest airline coronavirus waivers.

It remains to be seen if airlines will comply with the request, but the senators also sternly reminded the letters’ recipients that Congress just approved $25 billion in grants to bolster airlines’ finances, which could suggest that future aviation aid may include more consumer protections in its terms.

Featured photo by Patrick T. Fallon/Bloomberg/Getty Images.

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