A quartet of Democratic senators say that U.S. airlines could be sitting on as much as $10 billion in potential refunds to customers, and have sent a letter to 11 domestic carriers demanding full cash refunds for anyone who canceled a flight due to the global coronavirus pandemic.
The letter comes just days after the airlines and the Treasury Dept. agreed in principle to the structure for $25 billion in grants to the industry.
Senators Edward J. Markey (D-Mass.), Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), and Kamala Harris (D-Calif.) on Friday released the findings from an investigation into the consumer refund policies of the airline industry during the coronavirus pandemic.
The refund policy has been a bone of contention between airlines and consumers, with travel agents caught in between trying to do right by their clients. The airlines offered the typical credits/vouchers for future flights, but many passengers who had set up lengthy, expensive trips for specific times found it frustrating to try to replicate the dates in the future - especially with travel restrictions still in place and uncertainty over when the virus will fully go away.
Carriers are already required under federal law to give full refunds to customers who request cashback if the airline itself cancels a flight. Passengers who cancel their own tickets receive airline credits. But credits don't do much to buy food or pay mortgages when 22 million people have filed for unemployment in the U.S. in the last month.
"The ongoing pandemic is placing enormous financial strain on millions of Americans. In light of this pressing need, and the unprecedented multi-billion-dollar bailout that the airline industry just received from Congress, we are absolutely outraged that so few airlines are willing to offer real cash refunds to consumers who must cancel their tickets," said the Senators in a joint statement.
"Although most companies refused to say just how much money they are sitting on in the form of travel vouchers, we estimate that the airlines could be holding onto over $10 billion of hard-earned money from American travelers. If these companies released that money back to the public, it would provide a significant stimulus for struggling families. That's why we once again urge the airlines to end their anti-consumer policies and offer real refunds during this emergency."
The Senators found that only two airlines - Allegiant and Spirit - are offering refunds to passengers who voluntarily and proactively cancel their own tickets during the coronavirus crisis.
"None of the biggest carriers with the most revenue, including United, American, Delta, and Southwest, offer similar refunds," the lawmakers said.
In the airline replies to the Senators, most carriers did not share the total value of the vouchers and credits they have issued, adding that their policies were consistent with
Department of Transportation guidelines.
Low-budget carrier Sun Country was one of the few admitting that giving out cash refunds or refunding all of its non-refundable tickets outside of DOT guidelines "would put the company's future at risk."
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