Congress introduces new bill requiring cash refunds from airlines - regardless of who cancels the trip

In response to the growing number of consumer complaints to the U.S. Transportation Department over flight refunds in light of the coronavirus pandemic, a group of Democratic senators have signed on to a bill that would require major airlines and third-party ticket sellers to offer full cash refunds for all canceled tickets - regardless of whether the airline canceled the overall flight or the passenger canceled their individual ticket.

The Cash Refunds for Coronavirus Cancellations Act would allow airlines to pay for the refunds using emergency money made available by Congress as long as the money designated for employee benefits and payroll by the Cares Act remains untouched.

"Americans need cash in their pockets to pay for food, housing, and prescriptions, not temporary credits toward future travel," Sen. Edward Markey, D-Mass., said in the bill announcement. "In light of this pressing need, and an unprecedented multi-billion dollar bailout, it's absolutely unconscionable that the airlines won't give consumers their money back."

In the months of March and April, the Transportation Department received more than 25,000 complaints from consumers who said they had been denied refunds by carriers, according to reporting from The Washington Post. The group of senators, which includes Elizabeth Warren, D-Mass.; Richard Blumenthal, D-Conn.; Chris Murphy, D-Conn.; and Kamala Harris, D-Calif., said the airline industry could be holding on to as much as $10 billion in consumer cash.

The new bill would make the right to request a cash refund retroactive through March 1, so that travelers who had previously asked for and received a travel voucher can change it to a refund, provided that the voucher is unused.

It would also provide relief for consumers in the way of an 180-day extension after the end of the nationwide covid-19 emergency declarations, so that travelers would have six months of flexibility to request a cash refund in case fears of flying linger after the procedures in place deem it safe to fly again.

"Offering vouchers might be a defensible policy in ordinary times, but in a crisis of this magnitude, it is simply unfair to deny refunds to customers who canceled their flights," said Anna Laitin, director of financial fairness and legislative strategy at Consumer Reports, in the announcement. "The airlines should provide refunds to all customers whose travel plans were impacted by this unprecedented public health and economic crisis. With so many Americans out of work and facing financial hardship, a voucher for future travel is simply not appropriate or useful."

Many travelers have found the process of requesting a refund to be a series of hoops as airlines have ducked Transportation Department regulations on airfare refunds. The problem was so widespread that the agency issued an enforcement notice in early April saying airlines had to issue refunds for canceled flights or those with a significant schedule change even in the midst of the pandemic.

"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," Transportation Secretary Elaine Chao said in a statement that accompanied the announcement. "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."

Still, it may not be an easy process for travelers expecting to be refunded. Industry experts told The Post in April that the key to securing a refund comes down to persistence. "I can't tell you the number of times I've been told no on the first call, no on the second call, then yes on the third call," says Scott Keyes, founder of Scott's Cheap Flights.

Even with the pressure on, airlines may be reluctant to shell out millions in refunds but it’s ultimately the consumers’ money. “Everybody should be able to get their cash refunds,” Charles Leocha, the president and co-founder of the advocacy group Travelers United, told The Post. “They paid for something. They’re not getting it. It’s basic American law.”