We know that a lot of airlines have been playing games when it comes to issuing refunds for cancelled flights and significant schedule changes. Here in the US, the Department of Transportation is the governing body that oversees that.
In early April the DOT clarified the policies airlines have to follow when it comes to issuing refunds, though many airlines still haven’t been obeying the rules. Well, the DOT has this week issued a second notice addressing some frequently asked questions.
This comes as the DOT has seen a spike in consumer complaints — the organization usually sees an average of 1,500 complaints per month, while in March and April they saw more than 25,000 complaints, many of which concerned refunds.
Here are some of the key things that the DOT clarifies in the latest notice:
In this post:
How are “significant changes” and “cancellations” defined?
The DOT has been requiring airlines to issue refunds in the event of cancellations and significant schedule changes. The problem is that the DOT hasn’t defined those terms, causing some airlines to redefine the terms in an unreasonable manner.
The DOT acknowledges that US carriers have different interpretations of the terms, and therefore airlines may develop reasonable interpretations.
While the DOT isn’t defining the terms now, the organization reserves the right to determine that a carrier’s refund policy is unfair and deceptive, if not determined to be reasonable.
How quickly do airlines have to refund flights?
In the event that passengers are entitled to a refund, refunds have to be made promptly:
- For airlines this is defined as being within seven days when paying by credit card
- For travel agencies “promptly” isn’t defined, so they have a bit more leeway; the DOT will take into account increased refund volumes when it comes to determining whether travel agencies are compliant
It’s also noted that the totality of airlines’ circumstances will be taken into account when making decisions based on refund times, as it comes down to whether airlines are making a good faith effort to provide refunds in a timely manner.
In other words, airlines likely won’t be punished if it takes them eight days to issue some refunds.
Can airlines retroactively apply new refund policies?
We’ve seen airlines adjust schedule change and refund policies a countless number of times, so can airlines do that for previously booked tickets? The answer is no.
The DOT doesn’t allow airlines to retroactively apply changes to refund policies if they negatively impact customers. The refund policy in place at the time the passenger purchased the ticket is what counts.
In other words, United Airlines can’t retroactively redefine the word “cancelled” for people who had already booked tickets.
Can airlines offer vouchers in place of refunds?
Airlines can offer consumers alternatives to a cash refund, so long as the option for a refund is also offered and clearly disclosed, assuming the passenger is entitled to one. Also, any restrictions associated with vouchers need to be made clear, or else the issuing of vouchers will be considered a deceptive practice.
What happens if passengers don’t feel safe flying?
What happens if your flight operates as scheduled, but you don’t feel safe flying due to the COVID-19 pandemic?
Passengers who purchase non-refundable tickets still being operated without a significant schedule change aren’t entitled to a refund or travel voucher.
However, it’s noted that many airlines are providing travel credits or vouchers that can be used for future travel. This isn’t government mandated, though.
There’s nothing terribly surprising with the DOT’s latest notice. There has been a huge increase in consumer complaints, which is to be expected given some of the practices airlines have engaged in.
The key takeaways with this latest notice are that airlines have to issue refunds within seven business days, and that airlines can’t retroactively apply new refund policies on schedule changes and cancellations.