New Bill for Guaranteed Cash Refunds for Canceled Flights
Air travel has been chaotic this summer. Travel demand has spiked, but airlines and airports have been ill-equipped to handle it. That has resulted in many delays and cancellations, and passengers stranded at airports.
Airlines often offer rebookings, meal vouchers or flight credits, but especially early in the pandemic they have avoided full refunds. That’s despite a federal Department of Transportation rule requiring them to do so. A WSJ investigation found that the nation’s four largest airlines “had $10 billion in unused travel credits on their books at the end of 2020”.
Now lawmakers have introduced a bill that would require airlines to provide cash refunds to travelers when they cancel or significantly delay a flight.
The Cash Refunds for Flight Cancellations Act was announced this week, amid months of nightmarish air travel issues and the ongoing threat of the COVID-19 pandemic. Over the past few months, flight cancellations and delays have skyrocketed, far exceeding the number before the pandemic and leading to an avalanche of consumer complaints.
The bill would codify the Department of Transportation rule mandating cash refunds. The measure would also give travelers the right to a cash refund if they cancel their flight at least 48 hours before their scheduled departure.
“While federal law requires airlines to provide cash refunds when they cancel a flight…, most airlines force customers to jump through hoops to claim what they’re owed,” the statement reads. “At the same time, with the emergence of new COVID-19 variants, consumer travel plans continue to be unpredictable. In this age of increased travel uncertainty, passengers should not be forced to choose between their money and their health.”
The bill would require airlines to provide refunds within 30 days of a canceled flight or a voucher, if the customer prefers, that would be redeemable indefinitely.
American carriers canceled roughly 1,400 flights over the Fourth of July weekend and more than 3,400 flights over the Juneteenth holiday weekend. But cancellations and delays have been an almost daily occurrence this summer.
Bill Details
The Cash Refunds for Flight Cancellations Act would:
- Require a covered airline or ticket agent to offer a full cash refund within 30 days if the airline cancels or significantly delays a flight, or if a passenger cancels their ticket for any flight up until 48 hours of the scheduled departure time.
- Permit a covered carrier or ticket agent to offer travel vouchers as an alternative to cash refunds, as long as that offer includes a clear and conspicuous notice of the flyer’s right to a cash refund and the voucher is valid and redeemable indefinitely.
- Require a covered carrier or ticket agent to disclose to the passenger, prior to purchasing a ticket, that they can cancel their flight and receive a full cash refund.
- Require a covered carrier or ticket agent to disclose to the passenger whose flight was cancelled or significantly delayed that they have a right to receive a full cash refund.
- Authorize the Secretary of Transportation to impose a $1,000 civil penalty on an airline for failing to provide a full cash refund to a passenger within 30 days.
A copy of the legislation can be found here.
Lower Spend - Chase Ink Business Preferred® 100K!
Chase Ink Business Preferred® is a powerful card that earns 3X Ultimate Rewards points in a broad range of business categories on the first $150K in spend per year. Right now earn 100K Chase Ultimate Rewards points after Learn more about this card and its features!
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
The airlines perfectly new that they will have to cancel thousands of flights, nevertheless they kept selling. Then they kept all the money and DID NOT CARE to leave tens of thousands of passengers (including children) loosing vacations, time, money and a list of 100 etceteras. This is going on since the last two decades or so. The Government should stop this stealing and abuse.
I tried to move to a flight one hour earlier to allow time to catch an international flight. American wanted $175 to move it. They subsequently moved my original flight three times and didn’t have to pay me a penalty. They better quantify “significant “ or you will never see a dime…as it is, thunderstorms in. Japan will suddenly cause your flight to Des Moines to be a “weather cancellation.”
I’m just wondering how they will refund award flights.
Yeah… Keep Dreaming…
Airline Lobby is too big and will NEVER let this happen. This is why the US does not have a Passenger Bill of Rights on the same level as Europe (Believe, I don’t in any way agree with most European political themes but they got the Passenger Bill of Rights and their Computer Privacy laws just right!)
Will be a good thing If it gets passed
“Require a covered airline or ticket agent to offer a full cash refund within 30 days…if a passenger cancels their ticket for any flight up until 48 hours of the scheduled departure time”
This will never happen, as much as I would love to see it. Imagine the number of speculative bookings that would be cancelled…
I do think requiring cash refunds for when airlines cancel the flights is fair, and within the rights of the government to mandate for the financial protection of the flying public.