Department Of Transportation Will Make Airlines Offer Refunds For Cancelled Flights

In an interview Department of Transportation Secretary Elaine Chao says that airlines have to refund customers when they cancel flights. That’s clear, published DOT policy.

Currently many airlines are breaking the law refusing refunds for cancelled flights, or misleading customers into taking travel credits instead of cash, and going out of their way to make the refund process more difficult.

In the U.S., United Airlines and JetBlue have been especially big offenders. American Airlines has probably been the best actor in my experience.

DOT action may pressure airlines to change here, or at a minimum the DOT may be responsive to consumer complaints, based on Secretary Chao’s guidance.

Some airlines are refusing to give refunds to canceled flights, and instead are offering travel credits. However, Chao said her department will order airlines to abide by federal policies, and people should be eligible for full refunds.

“During extraordinary times like this when people have to make involuntary travel, plan changes — I think we all need to be more flexible,” she said. “But on top of that, the department has a responsibility to look at the consumer protection rights of passengers, and we will do that.”

In a statement today, DOT made it explicit that refunds including option fees for additional services must be refunded even when the cause of the disruption is outside the airline’s control.

So in addition to seeking redress from your credit card company, consider filing a complaint with the Department of Transportation.

Secretary Chao also said that the government should not ground the airlines, and that flying decisions should be left up to them – and that the nation needs the airlines flying, even now.

[A]irline companies are experiencing a 94% drop in passengers. Some of the airplanes are huge 737s — they’re carrying six people, they’re carrying nine people,” she said on Thursday. “These are commercial decisions that should be made by the airline companies.”

…“The airline companies are hurting badly, but there are still people who need to get from, for example, New York to California. They can’t spend three days driving from New York to California,” she said. “They need to have this essential service available.”

That seems right as a first principle, though I can imagine future restrictions on flying out of virus hot spots, especially to places that have successfully contained COVID-19.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Wow, Moscow Mitch is NOT going to be happy with his wife now…how dare she stand up for consumers like that

  2. Does this help with Singapore Air (non US carrier) for trip originating in US (SFO-SIN)? I was forced to take a $4500 one year voucher over five tickets through Chase for @SingaporeAir tickets. They insisted on $200 change fee per ticket ($1000 total) if I took the refund.

    The voucher is actually worth less than one year since they aren’t even flying now to any meaningful destinations.

    I suspect it wouldn’t hurt to submit a DOT complaint and maybe I could get some action on an actual refund.

  3. My agency has several commission contracts, mostly for international travel. I am told that when the airlines refund to the passenger, my commission will be recalled. I’m a small agency-me. I have built a niche market over the past 50 years which is 75% repeat clients and mostly high end buying seat in the front of the bus.
    Is anyone in congress, government or Ms. Chao, planning on visiting this situation?
    The recall will give the airlines a swift short $ shot in the arm. They should weigh that against the revenue they will lose in future sales when the recall will put many out of business.

  4. DOT secretary thinks it takes just three days to drive from NY to CA? And a 737 is “huge?” Hmm.

  5. @ Gary — What is considered a “significant” schedule change for DL, AA, UA, WN, B6 etc.? Or, what WAS considered significant before the “new” policies that airlines have adopted? A post summarizing these policies would be helpful.

  6. Westjet is already rejecting the directive. They told me that they are Canadian and the CTA said they could refund to voucher.

  7. @Gene – each airline is different, UA was a couple of hours and that’s usually been rule of thumb but what is in their contracts of carriage varies (and I don’t think any refund for schedule change is in WN’s actually)

  8. @chris – As it happens I drove from California to DC in just over 3 days when I moved to the East Coast for work after college

  9. Can you imagine? LOL. Hey it’s a free market. Maybe they should charge people for the actual cost of the flight. If 200 people paying $200 is profitable, then 10 people would have to pay $4000 each. Or drive.

  10. @ Chris, Google Maps says 41 hours, so yes, you could do it in three days, especially if more than one person is sharing the driving. Grueling, but doable.

    It seems to me that the airlines should be offering a refund, but if the idea is to preserve cash, offer a voucher worth X% more than the amount of the refund would be. If there’s enough incentive, there would be takers.

  11. Yesterday AA added a clause to their Covid policy that award tickets are no longer included in their no-change fee refund policy. You want your miles back for a cancelled flight? You pay a redeposit fee. Maybe the DOT didn’t include award tickets, as I don’t recall seeing this on the AA landing page before yesterday

  12. @UA-PEK says: “Wow, Moscow Mitch is NOT going to be happy with his wife now…how dare she stand up for consumers like that”

    And Nicaragua Nancy and Chihuahua Chuck were NOT happy that Trump restricted cross border traffic. How dare Trump stand up for citizens like that

  13. Is it considered a “schedule change” when your original flight is canceled outright and your placed on a different flight 2.5 hours later? United did this to our family for a flight on 4/7 and they’re refusing a refund, claiming it’s a schedule change and not a cancelation.

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