Airlines Are Holding Billions in Refunds
The U.S. Department of Transportation has told airlines twice this summer that they are required to offer customers refunds for canceled flights. It first clarified the requirements in April, and then it sent another warning in May. Airlines have an obligation to provide a refund to a ticketed passenger when the carrier cancels or significantly changes the passenger’s flight, and the passenger chooses not to accept an alternative offered by the carrier.
But we are now in mid August and airlines are still holding on to cash that they should have paid to customers whose flights were canceled. Passengers continue to struggle to get their refunds from some carriers and travel agencies. Even though the law is clearly on their side, still to this date airlines are holding billions in refunds.
Many international carriers, and some domestic, have offered only vouchers. Some even forced consumers into accepting those vouchers that often come with an expiration date. Plus vouchers are not as good as cash.
And that is not even the worst case scenario. Some airlines are just completely refusing to give out any type of compensation. Alitalia for example, told a family of five they were considered no-shows for a March 8 Boston-to-Rome flight and therefore ineligible for either a full refund or voucher, the WSJ reports. They spent more than $3,000 on the tickets and when they called twice to cancel the flight. Alitalia agents said not to cancel as the flight would probably end up being canceled anyway. That didn’t happen and then the airline said they should have just rebooked to a random later date.
That is just one example, but many similar stories have surface over and over again since the coronavirus pandemic shut down air travel in early March. We have seen many types of excuses from airlines when refusing to give back cash for canceled flights.
The U.S. Department of Transportation has been in direct communication “with the largest U.S. and foreign airlines, and other airlines that received a large number of refund complaints, to ensure compliance with the law,” WSJ says. The pressure has resulted in many passengers receiving refunds after first being denied. The DOT also forced some airlines such as United to revert rule changes. United temporarily increased the requirement from two to six hours for schedule changes, in order for passengers to be eligible for a refund. A lawsuit has also been filed against United over refunds.
Frontier has also been in the news for refusing refunds. Instead they have been giving passengers vouchers with a 90-day expiration. That was worthless for most people early on, since travel would be impossible within the vouchers validity period. And yes, Frontier has also been sued for refusing to give cash refunds. Southwest and Delta have also seen similar class action suits.
Airlines are still holding on to billions of dollars that they should have already given back to customers. This is against the rules that the U.S. Department of Transportation has clearly laid out. Lawsuits could provide some relief for customers. But, it usually takes years for plaintiffs to see any type of monetary compensation. Additionally, this comes after many airlines have received grants and no interest loans from taxpayer money in recent months.
Let us know if you have had issues with any domestic or foreign airlines when it comes to refunds.