The U.S. Department of Transportation (USDOT) is releasing a report on its work to address failures of airlines to provide timely refunds for flights cancelled or significantly changed as a result of the COVID-19 pandemic. This report was mandated by President Biden’s Executive Order on Promoting Competition in the American Economy that he issued in July.
Airlines and ticket agents have a legal obligation to provide refunds to consumers if the airline cancels or significantly changes a consumer’s flight. However, in the early months of the COVID-19 pandemic, airlines had difficulty processing the significant volume of refund requests that they received. Many airlines were also initially reluctant to provide the required refunds.
This resulted in USDOT receiving a flood of complaints about carriers’ failures to provide refunds. In the five years before the COVID-19 pandemic, the Department received an average of 17,420 aviation consumer complaints annually with refund complaints accounting for approximately 8.25% of the total. In calendar year 2020, the Department received a total of 102,561 consumer complaints—the highest number on record and an increase of 568.4% from the prior year. The volume remained high for the first half of 2021 with the Department receiving a total of 22,357 consumer complaints. Of the complaints received over this 18 month period, 84.3% concerned refunds.
The new report details how the USDOT has responded and its efforts to help travelers get their money back and hold airlines accountable. This includes:
- USDOT issuing two enforcement notices on airlines’ obligations to provide refunds;
- USDOT initiating investigations against 20 airlines for failing to timely provide refunds, 18 of which are still pending
- USDOT issuing a formal complaint against Air Canada seeking a substantial fine for extreme delays in refunds;
- USDOT taking steps to increase the number of DOT staff handling consumer complaints by 38%.
To date these efforts have resulted in at least nine airlines amending their policies to make clear that passengers are entitled to a refund when a carrier cancels a flight or makes a significant schedule change and are providing refunds as required. Initially, the airlines provided vouchers or credits instead of refunds for non-refunded tickets when the carrier cancelled a flight or made a significant schedule change.
As a result of USDOT’s efforts, thousands of passengers who had initially been denied refunds have received or are receiving the required refunds.
USDOT is planning additional steps to protect consumers including initiating rulemaking that would enhance passengers’ rights when a flight is operating but the passenger decides not to fly because of government restrictions. Current regulations do not cover this situation. USDOT is also moving forward with rulemaking on ancillary fees, called for in the President’s Executive Order, which would require airlines to increase the transparency of fees for ancillary services.