US airlines are obliged to refund passengers for cancelled flights

Time to pay up.
Time to pay up.
Image: AP Photo/Charles Krupa
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In an enforcement notice published today, the US Department of Transportation left little wriggle room for troubled US airlines. “Passengers should be refunded promptly when their scheduled flights are cancelled or significantly delayed,” wrote Blane Workie, the department’s assistant general counsel for Aviation Enforcement and Proceedings.

In general, when a flight is cancelled, airlines have two options: they must refund the passenger in full, or offer an alternative route. If the proposed alternative is unsatisfactory to the customer, they’re entitled for a full refund. This remains the case even if the cancellation is due to factors far outside the airline’s control, Workie noted, including due to government restrictions, after Hurricane Katrina and the attacks on Sept. 11, 2001, and in presidentially declared natural disasters: “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.”

For airlines hoping to placate customers on cancelled flights with vouchers, air miles, or other forms of credit, the notice will likely come as a blow. Still, carriers have some time to get themselves together: The Aviation Enforcement Office said it would not prosecute carriers immediately, given them the opportunity to adjust their policies and let customers know that they could receive a cash refund instead of any form of credit. Airlines must also contact passengers who have already received vouchers for cancelled or significantly delayed flights and let them know that they do have the option of a refund, instead.

The notice may be a response to airlines instituting policies that prevented affected passengers from getting their refund in a prompt manner: JetBlue recently introduced a “temporary” policy in place until April 15 which stated that passengers would only qualify for a refund if their flight was changed by more than a day—if not, they would receive a travel credit with an 18 month expiration date.

Meanwhile, United announced a series of cancellation policy changes ranging from offering refunds on a “case-by-case” basis to only allowing refunds with schedule changes of six hours or more. Its more recent iteration gives customers flight credit valid for a year. Only at the end of the 12-month period would the credit be refunded to the original card.