- The US Department of Transportation (DOT) issued an enforcement notice to airlines on Friday, warning them that they must offer refunds to passengers whose flights are canceled.
- Some airlines have been accused of only offering travel vouchers or credits as flights are canceled due to the coronavirus pandemic.
- However, DOT rules require airlines to offer regular cash refunds in the event of cancellations.
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The Department of Transportation issued a stern reminder to airlines on Friday: If they cancel a flight, they have to refund the affected passengers.
As demand for air travel has plummeted due to the novel coronavirus outbreak, airlines have canceled and consolidated vast numbers of flights within their networks. At the same time, passengers have rearranged travel plans, taking advantage of travel waivers issued by the airlines allowing changes and cancellations without fees.
When a passenger cancels a ticket under the travel waiver, they can typically get a credit for the value of the ticket to use toward a future flight. Typically, customers will have about a year to use the credit - on Friday, Delta extended that to two years for customers who were originally scheduled to travel in March, April, or May.
But when an airline, rather than the customer, cancels the flight, US Department of Transportation rules require the airline to offer a refund to passengers. While there is some leeway if the airline can provide another flight within the same day, most airlines will still allow a refund if the rescheduled flight is much earlier or later than the original.
The rule applies to every US airline, and on flights to or from the US operated by a foreign airline.
However, as airline revenue has taken a serious hit during the outbreak, some passengers have complained that getting refunds for canceled flights is becoming a challenge.
According to an official enforcement notice issued by the DOT, the department has received "an increasing number of complaints and inquiries from ticketed passengers, including many with nonrefundable tickets, who describe having been denied refunds for flights that were canceled or significantly delayed."
In most cases, passengers said they were told by the airline that they would only receive vouchers or credits for future travel which, due to the current travel reductions and restrictions, couldn't be used anytime soon.
"The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier's control (e.g., a result of government restrictions)," the Department said in a statement.
It added that the extreme nature of the current crisis for the industry was not an excuse to suspend the refund rule.
"Airlines have long provided such refunds, including during periods when air travel has been disrupted on a large scale, such as the aftermath of the September 11, 2001 attacks, Hurricane Katrina, and presidentially declared natural disasters," the enforcement notice said. "Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines' obligation to refund passengers for canceled or significantly delayed flights remains unchanged."
Airlines that have already issued vouchers in lieu of offering a refund are required to contact passengers and offer the alternative.
Several airlines have recently changed their refund policies in an effort to hold onto liquidity rather than offering refunds, where possible.
For instance, JetBlue implemented a temporary policy in which it would no longer offer refunds if an alternative flight was available within 24 hours, according to The Points Guy. United began offering credits instead of refunds for cancellations, saying it would provide a refund if the credit was not used within a year. It was not clear if the Transportation Department policy would allow either of those changes.
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