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USDOT to Help Secure Refunds for Flights Cancelled Due to Pandemic

September 13, 2021 by Reece Nations
Looking out from Terminal C at Reagan National Airport. (Photo by Dan McCue)

WASHINGTON — Airlines failed to provide timely refunds for flights cancelled due to the COVID-19 pandemic, according to a report from the United States Department of Transportation.

USDOT issued two enforcement notices to airlines emphasizing the companies’ obligation to provide prompt refunds due to cancellation. The report was launched by an executive order signed by President Biden in July mandating USDOT to submit a report to the chair of the White House Competition Council on its progress in addressing the failures.

In 2020 alone, the department received a total of 102,561 consumer complaints which represented a 568.4% increase from the year before. USDOT received an additional 22,357 consumer complaints throughout the first half of 2021, 84.3% over 18 months were concerning refunds.

“Airlines and ticket agents have a legal obligation to provide refunds to consumers if the airline cancels or significantly changes a consumer’s flight,” USDOT officials said in a written statement. “However, in the early months of the COVID-19 pandemic, airlines had difficulty processing the significant volume of refund requests that they received. Many airlines were also initially reluctant to provide the required refunds.”

In addition to the enforcement notices, USDOT also opened investigations into 20 airlines for failing to promptly provide refunds — 18 of which are still pending — and increased the number of staff handling consumer complaints by 38%. Further, the department issued a formal complaint seeking a substantial fine for extreme delays in refunds against Air Canada.

As a result, at least nine airlines have updated their policies making it clear that passengers are entitled to a refund when a carrier cancels a flight or makes a significant schedule change. Consequently, airlines are now providing refunds as required by the order rather than providing vouchers or credits for non-refunded tickets following a cancelled flight or significant schedule change.

USDOT’s report concluded “thousands of passengers who had initially been denied refunds have received or are receiving the required refunds. However, we have more work to do in this area. The department will continue its efforts to ensure that airlines are complying with the refund obligation and to develop policies and regulations to ensure that airline passengers are treated fairly.”

Because current regulations do not cover situations when an airline’s flight is operating but the passenger chooses not to fly because of government restrictions, USDOT is initiating rulemaking to account for these scenarios. The department is also moving ahead with rulemaking on ancillary fees — which were called by Biden in his executive order — which would require airlines to clarify the costs of ancillary services. 

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