In light of the coronavirus pandemic, airlines have had to cut their capacity at historic levels, canceling thousands of flights due to travel restrictions that have been put in place by various governments, including by the United States, and due to a drastic drop in demand as large swaths of the population are sheltering in place and practicing social distancing to mitigate the spread of COVID-19.
United Airlines last week reported that it has cut about 80 percent of its capacity in April and anticipates larger cuts in May. American Airlines said it will cut domestic capacity by between 60 and 70 percent in April and between 70 and 80 percent in May; international capacity will be cut between 80 and 90 percent during the same two months. Globally, the number of scheduled flights was down by 48 percent the week of March 30 compared to the same week last year, according to a recent report by air travel data firm OAG.
Given the avalanche of cancellations, airlines have been steering customers toward the option of obtaining a future flight credit if their flight has been canceled due to the COVID-19 outbreak. But on Friday, the U.S. Department of Transportation (DOT) issued a notice to U.S. and foreign airlines reminding them that they remain obligated to provide “a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier.” (Lawmakers in Europe followed suit days later, with EU Transport Commissioner Adina Valean rejecting calls from airlines to relax refund rules.)
The DOT stated that it is receiving a growing number of complaints and inquiries from ticketed passengers who said they have been denied refunds for flights that were canceled or significantly delayed.
In lieu of refunds, passengers told the DOT that carriers are offering them vouchers or credits for future travel.
Refunds required despite the “unprecedent impact” of COVID-19
In its notice to airlines, the DOT reminded carriers that they have long provided refunds to passengers for flights that they canceled or significantly delayed, “including during periods when air travel has been disrupted on a large scale, such as the aftermath of the September 11, 2001 attacks, Hurricane Katrina, and presidentially declared natural disasters,” the DOT stated. “Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines’ obligation to refund passengers for cancelled or significantly delayed flights remains unchanged.”
Recognizing that the coronavirus pandemic has hit the airline industry particularly hard, the DOT said it will exercise “prosecutorial discretion” and give carriers the opportunity to become compliant before taking further action.
What affected passengers can expect
For carriers that provided passengers future flight credits in lieu of refunds for canceled or significantly delayed flights during the COVID-19 public health crisis, the agency won’t take enforcement action as long as the airline contacts the passengers (in a timely manner) to whom it provided vouchers for said flights and lets them know that they have the option of a refund.
The refund should include the ticket price and any optional fees for services a passenger didn’t use and should be offered even if the disruptions are outside of the carrier’s control, such as a public health emergency or government restrictions.
Airlines must also update their refund policies to make it clear that refunds are available if they cancel a flight or make a significant schedule change.
Travelers should note that all of the above applies to flights that were canceled or significantly delayed by the airlines—not cancellations made by passengers. For those who have canceled or want to cancel flights still scheduled to operate, there is no government-protected entitlement to a refund.