Airlines under pressure for refund policies

U.S. airlines are facing intense congressional and legal pressure for their handling of refunds during the Covid-19 crisis. 

On Friday, 10 Democratic senators -- spearheaded by Edward Markey (D-Mass.), Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Kamala Harris (D-Calif.) -- released findings from an inquiry they made this month into airline refund policies. 

In response to questions from the senators, all 11 mainline U.S. airlines (American, Delta, United, Southwest, Alaska, JetBlue, Hawaiian, Spirit, Allegiant, Frontier and Sun Country) said they will provide refunds after they cancel a flight, an option required under U.S. law. 

However, only the discount carriers Spirit and Allegiant said they have implemented a policy allowing for travelers to receive refunds if the customer initiates a cancellation. In addition, Hawaiian said that if it cancels a flight after a customer’s decision to cancel, vouchers can be converted into refunds. The other carriers will issue only vouchers when customers cancel.

“Unfortunately, these travel vouchers do the public little good in this time of emergency, when Americans need money now to pay for basic necessities such as food, housing, and medical care,” the senators said. 

Only Spirit and JetBlue answered the senators’ question about how much they have issued in travel credits since the Covid-19 outbreak. Spirit said it issued $270 million in credit between March 1 and April 10, while JetBlue said that during the first few weeks of March it was issuing approximately $20 million in travel credit per day. 

The senators extrapolated JetBlue’s answer to develop an estimate that U.S. carriers are holding more than $10 billion in customer cash in the form of credits.

American Airlines told senators that more than 90% of customers whose flights have been canceled have opted for refunds. 

Also on Friday, Delta became the latest carrier to be hit with a class action over refunds. United and Southwest have been sued, too.

The plaintiff in the Delta case, Maryland resident Elliott Daniels, alleges that he spent $3,090 for roundtrip tickets between Washington Dulles and Cairo with a departure date of April 1. When Delta canceled that flight on March 11, Daniels agreed to reschedule for a day earlier. But when that March 31 flight was canceled as well, he requested a refund. Delta, the suit alleges, said no. 

In an email, Delta spokeswoman Elizabeth Wolf said that Daniels requested a refund on April 15, just two days before filing suit. Delta has since expedited Daniels’ refund process and has issued his refund. 

“Doing right by our customers through refunds and rebookings has been -- and will continue to be -- a key focus as we manage through this unprecedented global pandemic,” Wolf said. 

Under U.S. law, when airlines cancel a flight, they are required to give refunds when customers request one. That rule was reinforced by a Transportation Department enforcement order on April 3, which the department said it issued in response to a surge in consumer complaints about airline refund practices during the Covid-19 pandemic. 

Airlines have canceled most of their April and May schedules.

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