Nine US Senators Demand Airlines Provide Cash Refunds

Filed Under: Travel

There has been a lot of frustration among consumers when it comes to how airlines have been handling cancellations in light of COVID-19. Even in situations where airlines cancel flights, in many cases there has been no option to get a cash refund, but rather you can just get a voucher valid towards a future flight.

I understand that airlines are having liquidity issues, but so are many consumers…

Senators demand cash over vouchers

Nine US Senators have written a letter addressed to the CEO of every major US airline, urging them to change their policies on refunds.

The letter is signed by nine Democrats, including Edward Markey, Richard Blumenthal, Elizabeth Warren, Sheldon Whitehouse, Bernie Sanders, Christopher Murphy, Kamala Harris, Amy Klobuchar, and Robert Casey.

The letter essentially makes the case that:

  • The government has provided airlines with significant aid, and now it’s time the airlines do something for consumers
  • They request that airlines refund passengers for cancelled flights, rather than just issuing them vouchers
  • They make the case that consumers should get cash refunds even when they choose to cancel flights, and not just when airlines cancel flights

Here’s the letter to US airlines

Here’s the entire letter, for full context, and then I’ll share my thoughts below:

We write to urge your airline to issue full cash refunds to all customers who cancel their flights during the COVID-19 crisis, and to American citizens who encounter flight cancellations while stranded in countries that implemented travel restrictions. The ongoing pandemic is placing enormous financial strain on millions of Americans, and families need cash to pay for essentials such as food, housing, and medical care. In light of this pressing need and the unprecedented bailout — to the tune of $25 billion — that the airline industry just received from Congress, we believe your company has a moral responsibility to provide real refunds, not travel vouchers, to consumers, and to support State Department efforts to repatriate any American citizens trying to come home.

Most domestic airlines have taken some steps to temporarily waive coronavirus-related change and cancellation fees. But travelers who cancel their flights are finding that they will receive only airline credits, not cash refunds. Unfortunately, these travel vouchers do the public little good in this time of emergency, especially when airlines require their redemption in as little as 90 days.3 Americans need money now to pay for basic necessities, not temporary credits towards future travel.

Additionally, many of our constituents have experienced expensive flight cancellations by commercial airlines – without reimbursement – as they sought to return to the United States, particularly from countries that implemented travel restrictions in response to the COVID-19 crisis. We appreciate the efforts many airlines have already made to assist the State Department with evacuation flights. However, prices for flight tickets back to the United States have been inconsistent and often exorbitantly expensive, forcing Americans to pay thousands of dollars out- of-pocket, simply to comply with national travel restrictions and State Department guidance.

Moreover, many of these flights were also cancelled last-minute, leaving Americans no choice but to resort to alternative travel arrangements.

It would be unacceptable to us for your company to hold onto travelers’ payments for canceled flights instead of refunding them, especially in light of the $25 billion bailout that the airline industry just received from Congress.4 We urge you to offer cash refunds for flight cancellations so that Americans can better weather this crisis.

We specifically respectfully request that you respond to the following questions by April 7, 2020:

  1. Please estimate the total value of all travel vouchers and credits you have issued during the coronavirus pandemic.
  2. Please estimate the total number of flights that your airline cancelled during the COVID- 19 crisis, including flights cancelled due to travel restrictions implemented by countries globally.
  3. Will your airline commit to providing full cash refunds to travelers who cancel their flights during the coronavirus outbreak, including refunds in lieu of travel credits to those who have already received but not used those credits during this pandemic? If not, why not?
  4. Will your airline commit to providing full cash refunds to any travelers who experienced flight cancellations due to COVID-19 travel restrictions implemented globally?
  5. If you will not issue real cash refunds, will your airline commit to making any travel credits valid indefinitely? If not, why not?
  6. Will your airline commit to working with the State Department to expedite commercial flights – at an affordable price – for all Americans who remain stranded abroad?

Thank you for your attention to these important matters.

Do the Senators have a point?

I appreciate the sentiment behind this, but I think this letter may be taking it a bit far. I support them requesting cash refunds for flights that are cancelled, which seems entirely reasonable. Personally I think the Department of Transportation should be clarifying the policies, rather than Senators seemingly writing a letter without any authority, but…

However, requesting that airlines provide cash refunds when passengers choose to cancel their tickets is a bit much, in my opinion. A vast majority of passengers book non-refundable tickets, knowing full well the risks. Of course we’re in an unprecedented situation, but that’s also terrible for the airlines.

I do think issuing vouchers and not charging a change fee when consumers choose to cancel a flight is sufficient for now.

I like their suggestion that vouchers should be valid longer, though. Maybe not indefinitely, as is proposed, but I certainly do think that more than the usual “12 months from the date of issue” is appropriate, in light of the circumstances.

Frontier takes it to the extreme, requiring people to rebook within 90 days for travel by the end of the schedule. That’s not okay, in my opinion, especially if the current situation continues…

Bottom line

It’s always interesting when politicians write letters like this to companies. The CARES Act has already passed, and the issues in the letter weren’t in the final version of the bill.

I appreciate the sentiment behind what Senators are saying, though I think what we really need at this point is some clarity from the DOT, so that airlines and consumers both know exactly what’s acceptable.

What do you make of this letter to airlines?

Comments
  1. The reality is that airlines don’t have enough cash to provide refunds to everyone. They’d file for bankruptcy before doing this.

  2. I agree that the DoT should be clarifying, and while I appreciate the sentiment, nine senators writing a letter is not policy.

    I personally dont have too much against what the airlines are doing at the moment. I wish/hope any vouchers that get issued are usable for longer than they normally are – because none of us knows when we’ll be done with this crisis.

    Having said all that – if airlines are going to take taxpayer money as part of a bailout, I see absolutely nothing wrong with Congress putting conditions on using that money.

  3. Maybe these senators are expecting that the airlines meet them halfway? Ask for an entire loaf, you get half back. Ask for half a loaf, you get crumbs

  4. Maybe I’m missing something but I thought DOT regulations REQUIRED cash refund as an option for cancelled flights in the US? What should be required is making that choice obvious versus making people call (further clogging up phone lines) or disputing credit card charges. Years ago airlines in the US were forced to include taxes in the price of fare they display. A similar requirement could be made when a traveler goes to deal with a cancelled flight the web site should have two buttons: voucher (no expiration like many gift cards require) or refund.

  5. Are the Senators really saying they want their “own” fares refunded. That’s the way it usually goes.

  6. I am in the live entertainment industry, and we have been forced to refund non-refundable tickets to anyone who asks for them, regardless of the date of the show, if they choose not to exchange.

    It’s interesting that the airline industry creates onerous rules and policies that simply don’t exist in any other industry. If the airlines don’t refund, why hotels?

  7. They’re senators. All the airlines have to do to get them off their backs is give them some hush hush money.

  8. Cant criticize elected officials that are trying to look out for the consumer. However there is a lot more they should be asking for. The general standard of US airlines when it comes to consumer interest and protection is shocking. More should have been required from the bailout.

  9. The airlines got off too light with the bailouts. Were the bailouts necessary – matter of debate. There were not enough strings attached.

    Caps on salaries for executives and maybe even line staff temporarily. More strict consumer protection. Airlines got off easy.

  10. What John said. CARES Act was a huge missed opportunity for a more robust Passengers’ Bill of Rights. If the situation worsens and airlines have to go back to the trough for another bailout, it won’t be too late.

  11. Politicians always know what’s best for the airline industry. they know how much legroom everyone must have; they know what should be included in your fare; they know how airlines should utilize their back-end resources to process refunds. If politicians got their way, airline travel would have higher fares like it did before deregulation, and thus would be limited to themselves and other Americans with their socioeconomic status, rather than being an option for the masses.

  12. Lucky, I’ve been following your blog for some time. I really enjoy your informative posts. I agree with much of what you say. However, I disagree with your statement about “requesting airlines to provide cash refunds when passengers choose to cancel their tickets is a bit much in my opinion. A vast majority of passengers book non-refundable tickets knowing full well the risks.” We booked non-refundable tickets to Europe for mid-April this year. We fully intended to take our trip until the Coronavirus hit. I cancelled our flights when the country we planned to visit began to shut down public spaces, museums, restaurants, etc. It turns out that United cancelled our outgoing flights several days later. I understand the risks of a non refundable ticket, but these are extraordinary circumstances. United said they would hold the ticket amount as a credit to be applied to our next trip which needed to be taken within 12 months after the original date of the ticket issued. In our case, this meant, we’d need to use the credit by August. However, no one knows if it will be safe to fly by then or what kinds of service to what destinations will be available. I have emailed United Customer Service multiple times and sent messages via Twitter requesting a refund. The response has been full of bureaucratic, unclear and unhelpful language. One United employee finally stated that they were not issuing refunds at this time. He suggested I let the 12 months expire and then I could apply for a refund. When I asked if United would guarantee in writing that they would refund our money once the 12 month credit period expired, they stopped responding to me. I can only imagine how many others are in a similar situation to mine. The airlines have gotten a huge bailout from the Federal government. It is time for United and other airlines to refund tickets.

  13. Most people buy non refundable tickets because that’s what they can afford. You’re right that they should know what they’re getting into, but this is an exception.
    We’re not faulting airlines for their failure to anticipate and prepare for these tough times—they’re getting bailed out. We forgave the airlines; they should forgive their passengers and give them cash refunds.
    I don’t think they will, though.

  14. I have no problems with airlines doing what they’re doing given the situation they’re in. Currently I have vouchers from 4 different airlines to use in the future. I just hope that said airlines are still around so I can use them.

  15. I don’t think you could have expected the CARES Act to have provided a comprehensive passengers` bill of rights out the door. That can come later. With that being said, if the US taxpayers are going to be injecting money into the airlines they ought to have one in short order. As for the cash refunds, they should considering most of the cash will be from taxpayers anyways. Another point that I think needs to be made is that many if not most scientists studying corona expect a second wave of virus outbreak in the fall even after the current outbreak subsides. So even if we resume some level of travel by summer, it is quite probably that we will be dealing with another round of this by winter.

  16. Senators should also extend the validity of passports by a year because we, the People, paid for them but cannot travel for about a year due to Covid 19. They should also return about 5% of campaign donations because Bernie and Biden are not campaigning and holding rallies. Lazy!

    While they are at it, they should declare April 2, 2021 a second April Fools because this years is spoiled by Covid 19

  17. I don’t mind the travel vouchers, but they need to be extended indefinitely. For frequent travelers, it’ll be easy to burn these once some semblance of normalcy returns. It’s the occasional traveler, or those with unique trips planned that are getting hurt.

    For example, my wife and I had planned a vacation to Hawaii with our kids and my parents. It’ll easily be the longest trip my parents have been on (and probably will ever take), so we planned to surprise them with first class seats on a non-stop from Denver to Maui. The flight has not yet been cancelled, but there’s zero chance I’m getting my almost 70 year old parents on a plane anytime soon. I also have no idea how I’m going to burn 6k+ in flight credits over the next 12 months, in addition to other credits we’ve accumulated this spring. Given that the Grand Wailea has canceled our reservation, and the ongoing quarantine in Hawaii, it should not be the consumer bearing there brunt of this, while the airlines hold our money while providing no service. If the vouchers are extended indefinitely, at least we can get this rebooked sometime in the next couple of years.

  18. It’s a bit logically inconsistent to say “Airlines should get a bailout because they could not have predicted the current crisis”, but then turn around and say “Consumers should not get a refund if they cancel because they knew the risks of a non-refundable ticket”.

    Either everybody should be covered because this is unpredictable, or no one should be covered because they should’ve known better. Never mind the fact that, if anything, consumers require MORE protection because they have at a disadvantage.

  19. “A vast majority of passengers book non-refundable tickets, knowing full well the risks.”

    I don’t think anyone knew the risks in booking non-refundable flights before COVID hit, so this statement does not hold any water. I booked flights to travel next week that I fully intended to use and would still like to use, instead, I’m going to be sitting on vouchers that I may or may not get to use.

  20. @John Why should we be penalizing private companies who are trying to make money? As a private corporation, their job is to earn as much revenue as they can for their shareholders… whether or not people chose to fly them is their prerogative– and they do. If the consumers want more passengers’ rights, they don’t have to fly the airlines that they dislike. They can fly elsewhere or book first class. If you want more legroom book a better cabin… it’s not the airlines’ fault that you don’t like the seat you booked for yourself

  21. Airlines being an essential service should be placed an a stress test like what was introduced to the banks during 2008

  22. Right or wrong , Suggestions and demands (even if its from president) worth as much as the paper i use to wipe. Laws have effect nothing else. If politicians want some behavior changes they must either rely on free market to do it on its own or create a law.

  23. “A vast majority of passengers book non-refundable tickets, knowing full well the risks.”

    Refundable fares often run as much as 10 times as much as an ordinary non-refundable ticket. An American JFK-LAX non-refundable fare in September is priced at $133 one way; the non-refundable fare is $1,498. In what universe is a) this global pandemic scenario even contemplated in regular people’s decision-making on whether to purchase a refundable fare; or b) a price difference of 10 times for flexibility even remotely reasonable? They clearly are priced in a way to discourage most people from purchasing them.

    This is tone-deaf in the extreme, Lucky, and I genuinely expected better of you.

  24. @airlines aren’t doing anything wrong

    So by this metric and the airlines asking for and accepting taxpayer money they will effectively be hoarding the profits and subsidizing the losses. That is not a fair scenario. At this point we are not at a 1:1 ratio.

    When people book tickets, even non-refundable ones, there is an expected conveyance of product or service. That clearly is not going to happen for most people for the foreseeable future. Whether you blame it on the airlines for proactively cancelling flights in response to reduced demand or the government for curtailing freedom of movement due to a public health crisis, it certainly isn’t the fault of the passenger who has yet to be able to break his/her side of the contract by failing to show up for the purchased flight.

    “A party is considered to have repudiated a contract when they evidence a lack of willingness or an inability to perform their contractual obligations. A repudiation of a contract by one party (the repudiating party) will entitle the other party (the aggrieved party) to elect to terminate the contract.”

    The fact that the airlines do not have the funds to pay the complete cost of the refunds is a different problem but not one that negates a passengers` right to a refund.

  25. I’m not sure I “chose” to cancel my flight, despite actually doing so. I knew I wouldn’t be able to travel so I canceled it due to the favorable cancellation terms. I am sure the flight, scheduled for next week, ends up being canceled anyway.

    I should have let the airline cancel it if I was savvier, but the reality is most travelers aren’t thinking like that (people who don’t read these blogs) and likely did what I did unaware of the cancel/refund rule, yet might now want the money to pay other expenses.

    It comes down to cost for me. If the airlines can, in theory, afford it, refunds should occur. Maybe that is too costly, in which case keeping the airline out of bankruptcy seems preferable.

  26. Lucky, you said that people book nonrefundable tickets knowing the full risks of not being able to cancel. I would make the same argument that airlines decide to buy back stocks instead of saving for rainy days like now knowing full well that they don’t have enough cash reserve to operate.

    Why is it that airlines can get back bailout from taxpayers and people who are essentially paying these airlines can’t get money back from the airlines?

  27. I’m sorry but the whole concept of issuing travel vouchers that have to be used within 12 months and not refunds is just wrong. Airlines know that a percentage of date-defined travel vouchers )or “free” systemwide upgrades) are never used. In fact, their rigged business model counts on it. In this circumstance, a voucher issued when the AIRLINE cancelled the flight is not only wrong, but effectively amounts to theft.

    These airlines have been getting away with ridiculous policies, like these, for years. They operate a monopoly with the full support of the federal government and they know it.

  28. The airlines are in the right to do what they are doing minus the bailout monies now being given to them. Once they accepted these monies ALL bets are off and they will be asked, as they should to make things right with their customers. If they don’t like this, than don’t accept the free money simple!

  29. Today I heard American Airlines is most likely going to go bankrupt. It’s all part of taking advantage of the horrible catastrophe of the Covid-19 and economic-financial downturn and seizing the opportunity to restructure. So long to all your miles you’ve accumulated, let alone vouchers.

  30. I have been reading this back and forth for a while. I have but 2 points
    If I cancel or miss a flight it’s my fault…………if the airlines cancel a flight, or the flight cannot fly, that’s “not providing a paid for service” and the charges should be returned by the credit card company.

    The airlines bought back hundred of millions worth of stock,pumping up their prices, and making a lot of money for a lot of people. Why isn’t the bailout money coming after they sell all that stock…up to say 2010 or when the big buy backs started. Stocks have always been a gamble sometimes you lose money.
    Lucky you should stay out of all disputes as you have a vested interested in the airlines

  31. The fact that you can have a flight 9 months out that you want to cancel or change and have to pay a $250 change fee is stupid. I understand maybe a month or two out.. but there’s no reason they can’t give vouchers for all, a la Southwest.

  32. Aegean Airlines- $845 for 4 pax to fly Athens Santorini Athens. We can’t get there even if we wanted to as DL flights cancelled. Even Aegean cancelled our non refundable flights. I can’t just pop over to Greece and use the voucher they are offering. I have already payed for travel elsewhere next year (God willing) and can’t squeeze and extra European vacation in. I’m disputing this with AX and hoping for the best. It’s not the airlines fault but it’s certainly not mine.

  33. Not sure if it’s been said, but yeah the airlines are just dependent on government money right now, so the government might as well just give a check to people directly instead. This is actually happening!

  34. There are a lot of different points here and it is not cut and dry like people want it to be. For instance, AA has not “cancelled” our flight from LAS to PVR for April 4th BUT we can not enter Mexico because the borders are closed and in some areas they have quarantine requirements. So in this case, why should the airlines not refund the amount. We may have a hard time using $3,600 in credits for 3 people by the date they outlined as 12 months from our ORIGINAL ticketing date in Sept 2019. We have already booked all our other flights for the summer and fall with cash previous to the COVID-19 problems starting.

    There are a lot of different situations and I think the airlines need to be fair about putting together a refund/credit strategy that can allow for some flexibility.

  35. What about people who booked non refundable tickets on non US carriers like Aer lingus? I had a may 2020 ticket to Ireland which I cancelled after US announced all travel from Ireland cancelled. Aer lingus has not cancelled the flight so does not want to refund my money. On normal days, I would be traveling but these are different times.

  36. (1) The Senators’ request is a reasonable starting position for negotiations. Bear in mind that, unlike normal circumstances, the risk of a “system meltdown” (airports being cut from the network, etc.) actually exists now. Also, with foreign travel, even if the customer has cancelled, it is often due to a situation where either travel has been flat-out banned or, if not banned, subjected to very heavy quarantine requirements. Florida and NY/NJ/CT comes to mind here as well.

    (2) That said, some element of this should have been in the bill (or authority to put these conditions in place should have been clearly present if it was such a rush that it needed to be delegated to the DOT). Something always hits me poorly about adding conditions to an agreement after the fact (especially since there’s a real case that, given an overly-stringent bailout, one or more carriers might have managed to shake some cash loose on a junk bond issue [Carnival managed this] and/or decided to temporarily stop operations rather than take the deal.

  37. @Lucky – I think you missed the mark on this one. You state that when we book nonrefundable travel, we go into that purchase with the notion of understanding we won’t get our money back should we need to cancel. That is true IF the fault is on us. However, this convid situation is entirely different and can’t be compared to anything in recent history. Most states are on lock-down, countries have their borders closed, several states have mandatory quarantine if you enter. Even if we could travel, it is heavily restricted. This is an unprecedented situation and the airlines are essentially trying to cover their butts and leave us consumers high and dry. Delta Vacations is requiring we use a $2,000 voucher to be used within 90 days (that would be by the end of May – we cancelled that ticket in late February (it was travel to an international convention in Vegas). We have over $10,000 in Delta vouchers for travel that was for Italy in May. We didn’t get a refund (Delta hasn’t even cancelled those flights yet) – only a voucher and we booked last November. Delta is requiring us to book travel by November of this year. The list goes on,.. To make matters even more confusing is the fact that all of the airlines have different polices riddled with various uncomprehending rules and regulations. The airlines should not stronghold us into using these vouchers within a short window of time. They know they will be the winners in that game and the consumers stand to lose a lot of money. Not only should vouchers have no expiration date (I am floored you even disagree with this…) but the consumer should be allowed to decide who uses the voucher (currently, only the ticketed passenger is allowed to reuse the voucher)! For instance, I bought my dad and his wife tickets to Iceland for August. That trip won’t happen and being that my dad is almost 81 years old, I doubt he will want to risk flying ever again. He should have the opportunity to gift that voucher however he so chooses. So Lucky, please think long and hard how to proceed on this topic. It’s not all cut and dry and most of your readers are standing to lose a lot of money after putting their faith in the airlines.

  38. Amaaazing… I see that this forum is for US, but needed to air this. I’m trying to get a refund for 4 tickets from Emirates Airline for a 3 week trip to Italy. I knew that I had purchased non-refundable tickets. As my party knew we were not going to cancel and had booked hotel, tours, and rental car. Emirates said yes to refund then no.

    And to add financial stress I also had to book a flight to NY with Jet Blue… fighting with them for a refund as I write. Bail outs for the airlines??? Then we should get a refund period.

    I’m a senior.. who knows what shape I will be in next year or the following to travel. This was going to be my possibly last hurrah. Saddened

  39. Senators should stick to government issues and not involve themselves in this issue . Airlines have businesses to manage and vouchers are the best way to keep customers and retain cash flow in very difficult times

  40. Wait – If airlines refunded tickets for flights not flown and this would make them bankrupt. Does this not mean that airlines were trading while being insolvent. This would not be allowed in any other business.

  41. I cancelled 3 tickets in Delta as this virus was just ramping up, mid March. Delta still charged me a $150 cancel fee per ticket and only gave a voucher. Did they recently change their tune in regards to cancellation fees? When they advertise no fees, but then charge me one is was not happy. Who is going to change a flight in these times? People are canceling and willing to rebook for a later unknown date, I don’t mind the voucher, but the fees???

  42. U.s. Airlines for years have been sticking it to their passengers charging for luggage taking away blankets any kind of snacks my opinion is they miss manage their money I am a small business owner I had to make adjustments with my company to survive this pandemic they should have to make adjustments to if they go out of business so be it another company will come along and be strong and provide a better service the problem is they’ve got by with treating people like crap for so long without the risk of going out of business due to loss of customers that they continue to do it. Knowing that the government will bail them out they should be allowed to go bankrupt go out of business for their lack of management also their CEO makes over 14 million dollars a year no man alive should make that kind of salary and mismanagement a Company the way he has give us our money back you greedy jerks

  43. We have not cancelled our direct UA flight from IAD to CDG at the end of this month, but it has disappeared from the booking. The itinerary now shows EWR to EWR. ??? That’s it. No flight to Paris.
    Not sure what we’re supposed to do at this point. UA is probably hoping we will ‘choose’ to cancel the EWR to EWR flight, lock ourselves into a credit (for 7 mos since we booked in Nov) and sacrifice any rights to a refund for a flight they cancelled. Or ‘no show’ and forfeit all rights.
    Given the extraordinary profits the airlines have had over the last several years as they’ve monetized almost every aspect of air travel – from carryon luggage to seat assignment fees to sit next to your toddler – it’s appalling they’ve so quickly asked for a taxpayer bailout while refusing to refund passengers, many of whom are already out of work and need the funds as much, if not more.

  44. United cancelled my flight. I did not cancel. They suggested that I fly the day before and take another day off work, pay for another day at a hotel, etc. They said they could not help out with any of the additional costs. I’ve asked for a refund, and i was denied — only offered a credit to use in the next 10 months. Credit is non-transferrable, so if i travel buy my daughter cannot, oh well. My loss — their gain. When I pointed out the DOT requirement to issue refunds for cancelled flights, CS rep told me that they have been told not to issue a refund under any circumstances, no matter what the law is. At least she was honest with me. Not sure why a company that openly violates the law is entitled to a bailout.

  45. I wish senators asked airlines to refund our money before giving them 25 billions ( taxpayer’s money).There was no hurry to help Delta when last December Delta gave each employee 2 months pay as a bonus.At least refunds should have no expiration date.I want to go to Italy to visit my 90 year old mother
    The pandemic prevents me from flying.The writer is siding with airlines,he likely gets free flights doing so.

  46. These airlines are getting OUR TAX DOLLARS to bail themselves out of a mess they should have prepared for so the least they should do is give us our money back.

  47. I have contacted southwest on several occasions. They stated they are not doing anything to help with social distancing on the planes. They also stated they were not canceling any flights with the pandemic.
    If it was a couple hundred dollars I wouldn’t mind the travel funds…. however $900.00 in travel funds is a lot of money. They don’t even meet half to say with a refund I have to pay a fee. They are doing anything but saying the answer is no. It is reported a lot of employees have this virus.
    It a national thing not a simple thing that is causing so many to cancel.

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