There has been a lot of frustration among consumers when it comes to how airlines have been handling cancellations in light of COVID-19. Even in situations where airlines cancel flights, in many cases there has been no option to get a cash refund, but rather you can just get a voucher valid towards a future flight.

I understand that airlines are having liquidity issues, but so are many consumers…

Senators demand cash over vouchers

Nine US Senators have written a letter addressed to the CEO of every major US airline, urging them to change their policies on refunds.

The letter is signed by nine Democrats, including Edward Markey, Richard Blumenthal, Elizabeth Warren, Sheldon Whitehouse, Bernie Sanders, Christopher Murphy, Kamala Harris, Amy Klobuchar, and Robert Casey.

The letter essentially makes the case that:

  • The government has provided airlines with significant aid, and now it’s time the airlines do something for consumers
  • They request that airlines refund passengers for cancelled flights, rather than just issuing them vouchers
  • They make the case that consumers should get cash refunds even when they choose to cancel flights, and not just when airlines cancel flights

Here’s the letter to US airlines

Here’s the entire letter, for full context, and then I’ll share my thoughts below:

We write to urge your airline to issue full cash refunds to all customers who cancel their flights during the COVID-19 crisis, and to American citizens who encounter flight cancellations while stranded in countries that implemented travel restrictions. 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. 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.

Most domestic airlines have taken some steps to temporarily waive coronavirus-related change and cancellation fees. But travelers who cancel their flights are finding that they will receive only airline credits, not cash refunds. Unfortunately, these travel vouchers do the public little good in this time of emergency, especially when airlines require their redemption in as little as 90 days.3 Americans need money now to pay for basic necessities, not temporary credits towards future travel.

Additionally, many of our constituents have experienced expensive flight cancellations by commercial airlines – without reimbursement – as they sought to return to the United States, particularly from countries that implemented travel restrictions in response to the COVID-19 crisis. We appreciate the efforts many airlines have already made to assist the State Department with evacuation flights. However, prices for flight tickets back to the United States have been inconsistent and often exorbitantly expensive, forcing Americans to pay thousands of dollars out- of-pocket, simply to comply with national travel restrictions and State Department guidance.

Moreover, many of these flights were also cancelled last-minute, leaving Americans no choice but to resort to alternative travel arrangements.

It would be unacceptable to us for your company to hold onto travelers’ payments for canceled flights instead of refunding them, especially in light of the $25 billion bailout that the airline industry just received from Congress.4 We urge you to offer cash refunds for flight cancellations so that Americans can better weather this crisis.

We specifically respectfully request that you respond to the following questions by April 7, 2020:

  1. Please estimate the total value of all travel vouchers and credits you have issued during the coronavirus pandemic.
  2. Please estimate the total number of flights that your airline cancelled during the COVID- 19 crisis, including flights cancelled due to travel restrictions implemented by countries globally.
  3. Will your airline commit to providing full cash refunds to travelers who cancel their flights during the coronavirus outbreak, including refunds in lieu of travel credits to those who have already received but not used those credits during this pandemic? If not, why not?
  4. Will your airline commit to providing full cash refunds to any travelers who experienced flight cancellations due to COVID-19 travel restrictions implemented globally?
  5. If you will not issue real cash refunds, will your airline commit to making any travel credits valid indefinitely? If not, why not?
  6. Will your airline commit to working with the State Department to expedite commercial flights – at an affordable price – for all Americans who remain stranded abroad?

Thank you for your attention to these important matters.

Do the Senators have a point?

I appreciate the sentiment behind this, but I think this letter may be taking it a bit far. I support them requesting cash refunds for flights that are cancelled, which seems entirely reasonable. Personally I think the Department of Transportation should be clarifying the policies, rather than Senators seemingly writing a letter without any authority, but…

However, requesting that airlines provide cash refunds when passengers choose to cancel their tickets is a bit much, in my opinion. A vast majority of passengers book non-refundable tickets, knowing full well the risks. Of course we’re in an unprecedented situation, but that’s also terrible for the airlines.

I do think issuing vouchers and not charging a change fee when consumers choose to cancel a flight is sufficient for now.

I like their suggestion that vouchers should be valid longer, though. Maybe not indefinitely, as is proposed, but I certainly do think that more than the usual “12 months from the date of issue” is appropriate, in light of the circumstances.

Frontier takes it to the extreme, requiring people to rebook within 90 days for travel by the end of the schedule. That’s not okay, in my opinion, especially if the current situation continues…

Bottom line

It’s always interesting when politicians write letters like this to companies. The CARES Act has already passed, and the issues in the letter weren’t in the final version of the bill.

I appreciate the sentiment behind what Senators are saying, though I think what we really need at this point is some clarity from the DOT, so that airlines and consumers both know exactly what’s acceptable.

What do you make of this letter to airlines?

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