The Transportation Department plans to consider whether to require airlines and travel agencies to offer refunds to travelers who choose not to fly during a public health emergency, such as the current pandemic, due to government restrictions and advisories.
The department is scheduled to issue the Notice of Proposed Rulemaking in March, Vinh Nguyen, a senior attorney for the DOT's office of aviation enforcement, said during a meeting of the Aviation Consumer Protection Advisory Committee Thursday.
"Some of the questions we are looking to answer: should airlines be required to provide refunds, vouchers or credits in these instances? What government restrictions and health advisories are relevant? Should passengers provide any sort of documentation?" Nguyen said.
Currently, the DOT only requires airlines and travel agencies to provide refunds, when requested, for flights that have been canceled or have undergone a significant schedule change.
At the meeting, Matthew du Mee, chief counsel for the consumer litigation unit of the Arizona attorney general's office, was among those advocating for the DOT to require airlines to provide refunds to any customer who chooses not to travel for reasons related to Covid-19.
"We are in an unprecedented situation where Covid-19 impacts every aspect of consumer travel," de Mee said.
Full-service U.S. airlines, including the Big Three of United, Delta and American, eliminated change fees during the pandemic but don't provide refunds for nonrefundable tickets unless a flight is canceled.
Industry advocates defended such policies during the meeting, arguing that consumers can choose to purchase refundable tickets for an extra cost. By selling both refundable and nonrefundable tickets, Airlines for America chief economist John Heimlich said, airlines have been able to offer low prices for consumers who are willing to fly without refundability. In 2019, 38% of domestic flyers paid a roundtrip fare of less than $300, he said, compared with 30% in 2010.
"The ability to offer these really low end fares is tied heavily to the ability to offer these trades with consumers, to say in return, 'you're going to give me a greater degree of revenue certainty,'" Heimlich said.
Eben Peck, ASTA's executive vice president of advocacy, also weighed in on the topic. ASTA, Peck said, believes the refund requirement should be on airlines rather than travel agencies, since in the large majority of cases it is airlines, rather than ticket agencies, that hold the consumer's money.
He also said ASTA supports refund requirements under certain circumstances, even when a flight is operated. As one example, Peck cited a situation in which government restrictions are instituted after a ticket is purchased: For instance, when a ticket holder chooses not to fly because new quarantine rules have been imposed in their destination.
Nguyen said that as part of the March rulemaking the DOT also plans to develop a more specific definition of what constitutes a "significant" schedule change.