Democratic Senator Elizabeth Warren and several Senate colleagues including Bernie Sanders, Kamala Harris, and 6 others, announced a letter to the CEOs of major U.S. airlines demanding “every company to issue full cash refunds to all customers who cancel their flights during the COVID-19 crisis.”
The problem many of us have faced is that airlines around the world have refused to provide refunds when they cancel flights. The airline isn’t providing promised transportation, but is keeping the money. They’re doing this because they’re desperate for cash, they have our cash, so enforce an involuntary interest-free loan.
- We get a travel credit, good for a year from original date of ticket purchase.
- They break the law, but most people won’t complain and by the time any fines are levied it’ll be far enough in the future that it’s beyond their current concerns.
I’ve advised people they should seek the help of their credit card issuer to dispute charges, and file complaints with the U.S. Department of Transportation (which requires refunds for cancelled flights) and the European Union under EU261 (refund guidance was reinforced this month) as appropriate based on the airline and flight itinerary.
However Elizabeth Warren and her two colleagues want to go further. They want refunds for everyone, including those who have chosen to cancel trips themselves. They make the case that this should be honored because of the airline bailout but that’s just grandstanding.
- They could have insisted this as a part of the bailout package. They did not.
- Bailout decisions are now in the hands of the Treasury Secretary, and they aren’t even writing to him.
They complain that “Americans need money now to pay for basic necessities” though I’m not sure how that’s really the airline’s problem (as opposed to society’s problem generally). Airlines should honor their refund obligations, both from a legal and a moral standpoint. However the demand of these Senators seems to go farther than that.
“The ongoing pandemic is placing enormous financial strain on millions of Americans, and families need cash to pay for essentials such as food, housing, and medical care,” write the Senators. “In light of this pressing need and the unprecedented bailout — to the tune of $25 billion — that the airline industry just received from Congress, we believe your company has a moral responsibility to provide real refunds, not travel vouchers, to consumers, and to support State Department efforts to repatriate any American citizens trying to come home.”
The Senators also demand each airline answer a series of question:
- Total value of travel issued during the coronavirus pandemic
- Total number of flights cancelled during the crisis (including those legally required to be cancelled as a result of travel restrictions)
- Whether they’ll provide full cash refunds, even for those who chose to cancel their own travel plans and have already received (but not used) vouchers?
- Whether they’ll provide refunds for travelers whose flights are cancelled by the airline?
- Whether they’ll “commit to working with the State Department to expedite commercial flights – at an affordable price – for all Americans who remain stranded abroad?”
Generally speaking airlines are willing to work with the State Department on rescue charters. There are plenty of grounded aircraft and the State Department has successfully chartered several flights. I wrote about one from Maputo, Mozambique. This is complicated by local government restrictions on flights, and by challenges making Americans aware of the opportunity.
A demand for cash refunds for cancelled flights is reasonable, and the Department of Transportation should be taking a lead on this. A demand for refund of flights travelers have chosen to cancel doesn’t appear to be required under current law, though might make good fodder for a class action lawsuit claiming that government travel warnings are enough to constitute force majeure or at least ‘contract frustration’.
Bernie Sanders and Elizabeth Warren aren’t likely to get justice for customers, especially by making demands that go beyond what’s clearly required, and doing so after they have already voted airlines the bailout money.