Today, 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.
Today’s report details how the USDOT has devoted considerable time, energy, and effort to ensuring families get their money back and holding airlines accountable. This includes:
* DOT issuing 2 enforcement notices on airlines’ obligations to provide refunds;
* DOT initiating investigations against 20 airlines for failing to timely provide refunds, 18 of which are still pending
* DOT issuing a formal complaint against Air Canada seeking a substantial fine for extreme delays in refunds;
* DOT taking steps to increase the number of DOT staff handling consumer complaints by 38%.
To date these efforts have resulted in:
* At least 9 airlines have amended 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.
* Thousands of passengers who had initially been denied refunds have received or are receiving the required refunds.
DOT 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.
* 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.
To read more about USDOT efforts, read the report HERE . For more information on the President’s Executive Order Promoting Competition in the American Economy, read the fact sheet HERE .
