April 3, 2020

Carriers Must Offer Refunds Says DOT

The U.S. Department of Transportation (DOT) on Friday, April 3 issued an enforcement notice to airlines saying they are required to provide refunds for flights that have been canceled or required a significant schedule change. The DOT has not defined “significant delays” and has chosen to settle disputes on a case-by-case basis.

“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,” the agency said. 

The notice, issued by DOT assistant general counsel for aviation enforcement and proceedings Blane Workie, said "an increasing number of complaints and inquiries" from passengers who said they have been denied refunds for canceled or significantly delayed flights and instead were offered vouchers for future travel. While the DOT said carriers, both domestic and international that operate in the United States, can offer passengers that as an option, they also are required to offer—and make it clear to passengers that they offer—a refund.

The European Union on Wednesday issued a similar statement, saying EU law requires reimbursements to be made within seven days. “Airlines must refund canceled flight tickets,” EU Transport Commissioner Adina Valean said in an emailed statement. “They can of course also offer a voucher but -- and this is very important -- only if the customer agrees to accept this.”

The mass cancellations mean airlines owe customers a substantial amount. International Air Transport Association (IATA) estimates that airlines’ liability for refunds globally is $35 billion. "Most airlines are spending more cash in reimbursing their passengers than they receive in new booking revenues," according to Alexandre de Juniac, IATA Director General and CEO. "In this context, airlines' most urgent need is to keep their remaining liquidity to pay salaries and face their fixed cost. It is practically impossible for industry players to find sufficient financial means to keep the air travel value chain operating in the short time that airlines have before facing bankruptcy."

Please see this link which shows the April 3rd DOT notice to airlines: https://www.transportation.gov/briefing-room/enforcement-notice-regarding-refunds-carriers-given-unprecedented-impact-covid-19

Please see this link which shows the full DOT policy on flight delays and cancellations: https://www.transportation.gov/individuals/aviation-consumer-protection/flight-delays-cancellations