DALLAS _ Airlines are being warned to give customers refunds for canceled flights for the second time since the COVID-19 pandemic began, but U.S. transportation officials won't say what will happen if passengers don't get their money back.
The U.S. Department of Transportation issued a second warning to airlines after an "unprecedented volume of complaints" from passengers furious that carriers were withholding refunds on thousands of canceled flights.
Airlines operating routes in the U.S. or flying in or out of the country are required to provide refunds if the carrier cancels the flight and it causes a "significant" delay in getting to the destination.
But since the COVID-19 pandemic began, airlines have been pushing customers hard to take travel vouchers or credits for future travel. Customers have complained that airline ticket agents will claim refunds are not warranted or provide credits even when a refund was promised.
"The Department is asking all airlines to revisit their customer service policies and ensure they are as flexible and considerate as possible to the needs of passengers who face financial hardship during this time," said a statement from Transportation Secretary Elaine Chao.
For airlines, it's a matter of self-preservation.
All major airlines have reported that customer cancellations outpaced new bookings for several weeks early in the pandemic. On top of that, airlines such as American have cut more than half of all flights in May and June. Even more flights are getting canceled and consolidated on the day of the trip when planes only have a few passengers.
Airlines are losing $30 million to $70 million a day paying for employees and running flights that are often nearly empty.
Fort Worth-based American said it refunded passengers $900 million in the first quarter, even though the COVID-19 pandemic only hit the U.S. in the last few weeks of March.
Consumer Reports aviation adviser William McGee said the Department of Transportation isn't giving any protection to consumers to get back refunds.
"We've repeatedly told the DOT that there are significant loopholes in its guidance to airlines, including exclusions for flights that have not been canceled, 'nonrefundable fares,' and bookings made through third parties such as Online Travel Agencies," McGee said. We believe all flights affected by COVID-19 are eligible for cash refunds, yet the thousands of complaints we've received from consumers makes it clear U.S. airlines are forcing passengers to jump through unnecessary hoops, or simply refusing such payments."
The Department of Transportation got more than 25,000 complaints in March and April about refunds, compared with the 1,500 complaints it receives on the topic during a normal month.
Senate Democrats, including Elizabeth Warren, say airlines are sitting on nearly $10 billion in refunds from COVID-19 pandemic.
