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'Travelers are struggling': Senators call for airlines to offer cash refunds, not credits, for canceled flights

"Many of those airline trips people booked are just not needed or wanted right now."

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If you bought a plane ticket for the spring of 2020, it's likely that you never ended up taking that trip. In the early months of the pandemic, it became clear that air travel was not going to be safe for many passengers, and airlines began canceling flights.

In March 2020, major air carriers reported they canceled 16.9% of their domestic routes, up from 1% in February 2020, according to the U.S. Department of Transportation. In April, that number jumped to 41.3%.

Some airlines offered cash refunds for these trips. Others, however, offered only vouchers for a future flight, many of which are set to expire this year.

That move has some politicians calling for a better deal for consumers. On May 10, Sens. Ed Markey, D-MA, and Richard Blumenthal, D-CT, sent an open letter to 10 airlines, asking them to commit to a cash refund for all tickets canceled during the Covid pandemic.

Barring that, the senators wrote, all flight credits issued during the pandemic should be valid indefinitely, including those that have already expired. "In light of the ongoing pandemic and looming expiration dates for flight credits, we fear that countless consumers will be unable to redeem their flight credits or will redeem them at a loss," the senators wrote.

Advocacy groups call for cash refunds

Complaints about airline refunds have increased, according to data from the Department of Transportation. In February 2021, the agency received 3,313 consumer complaints about airlines, more than 80% of which concerned refunds. That's a 178% increase from the number of comparable complaints the DoT received in February 2020.

Since each airline has a different refund policy, consumers could easily be confused as to how much they were actually refunded, or when their voucher expired. "Because travelers are struggling to navigate these differing policies, they are now at risk of losing the billions of dollars they were effectively forced to loan to the airline industry interest-free," the senators wrote in their letter.

Offering a one-year flight voucher might "seem nice," says Teresa Murray, consumer watchdog at U.S. PIRG, a consumer watchdog organization. But it doesn't reflect the reality that the pandemic changed many people's financial priorities.

Some Americans might not have the means or ability to fly anymore, due to job loss or the need to care for children or elderly family members affected by pandemic closures. "Many of those airline trips people booked are just not needed or wanted right now," Murray says. "That's what the senators are talking about."

"It's outrageous and embarrassing for airlines to say they won't issue refunds because customers didn't plan for a pandemic that brought things to a screeching halt," she says.

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Over the past year, Congress provided billions in taxpayer dollars to airlines, and some took out government loans for other costs. Given this level of public aid, Murray says, airlines should feel an obligation to provide consumers with some flexibility.

"Airlines are playing hardball with people's wallets after they gladly accepted $50 billion of taxpayer money," she says. "Some even took government loans. The government helped out the airlines, so what are the airlines doing for consumers? I would say, not enough."

Airline industry: Updated policies offer 'flexibility'

The 10 airlines who received letters from Sens. Markey and Blumenthal are Alaska Airlines, Allegiant Air, American Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, and United Airlines.

Airlines for America, an advocacy group for the airline industry that represents seven of those 10, argues that airlines have provided unprecedented flexibility to consumers, in the face of a catastrophic year for the industry's finances.

"Throughout the pandemic, U.S. airlines have updated travel policies to offer increased flexibility for customers, and remain committed to working with each customer to address individual circumstances," Airlines for America said in a statement to Grow. "In 2020, U.S. passenger airlines issued $12.84 billion in cash refunds to customers — up 72% year over year – in addition to issuing billions of dollars of travel credits."

Many air carriers the group represents have "bolstered their commitment to consumers by offering voucher and credit opportunities exceeding the Department of Transportation's guidelines," the statement notes. A handful of airlines, including American and Delta, have extended their voucher expiration dates to 2022.

It's outrageous and embarrassing for airlines to say they won't issue refunds because customers didn't plan for a pandemic that brought things to a screeching halt.
Teresa Murray
consumer watchdog, U.S. PIRG

Austin Horowitz, principal aviation consultant at global advisory firm ICF, says accepting money from the government is one of the "legitimate arguments" for airlines providing full refunds.

"Airlines will say this money was for employees, but a dollar is a dollar," he says, noting that even if the government aid was meant for paychecks, it still kept the airline afloat overall.

Still, he doesn't think there should be a blanket policy that airlines need to refund customers, especially for tickets that were nonrefundable. "There was always this risk when the people bought their tickets originally — even if no pandemic happened, there was a risk people might lose their job," he says. "People bought what might have been a nonrefundable ticket to begin with, so [airlines] think they are being quite generous."

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