Feds Warn Airlines Once Again To Offer Customers Refunds

By David Schaper

Published May 12, 2020 at 2:37 PM CDT

An airline arrival and departure board shows several canceled flights last month at the Tampa International Airport in Florida.

Amid a huge increase in consumer complaints, the federal government is once again reminding airlines of their obligation to offer customers refunds for canceled flights. At the same time, regulators say they will provide airlines some relief from a requirement that carriers continue flying into cities where demand for air travel is close to nonexistent.

As a condition for accepting federal aid as part of the coronavirus relief package known as the CARES Act, the government had required airlines to continue flying to all destinations they served before March 1 "to the extent practicable." The Department of Transportation can approve waivers of that requirement and has granted some, but has denied others, resulting in airlines often flying planes carrying just a handful of passengers on some routes, and sometimes none.

The number of people flying each day has fallen more than 90% in recent months because of the coronavirus pandemic, but the airlines continue to fly about 30% of their flights each day.

Transportation Secretary Elaine Chao announced Tuesday that "in light of ongoing challenges faced by U.S. airlines," the department will begin to allow carriers to reduce the number of points they serve, as long as "every community served by a covered air carrier prior to March 1, 2020 will continue to receive service from at least one covered carrier."

Airlines can request exemptions from providing flights into up to 5% of required destinations that they believe are no longer reasonable for them to continuing serving.

Airlines have slashed their flight schedules in response to plummeting demand, canceling thousands of flights. But they've been reluctant to refund airfares to customers when they've canceled flights, instead offering travel credits and vouchers for future travel. Many would-be travelers say they've gotten the runaround from airlines when trying to request refunds they're rightfully owed.

Consumer complaints filed with the U.S. Department of Transportation skyrocketed to more than 25,000 in March and April, up from a usual amount of about 1,500 complaints and inquiries per month.

So the DOT is once again issuing a stern warning to the airlines, issuing a second enforcement notice to carriers, reminding them of their obligation under federal regulations to provide refunds for canceled flights, regardless of the reason for the cancellation.

"The Department has received an unprecedented volume of complaints from passengers and is examining this issue closely to ensure that airlines' policies and practices conform to DOT's refund rules," Chao said. "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."

The federal agency is also providing guidance for consumers, with answers to common questions about refunds, to help customers understand their rights. While airlines must offer refunds when the carrier cancels flights, refunds are not required for consumers who cancel their travel plans. In those instances, many airlines are offering credits for future travel and they are waiving cancellation and change fees.