The U.S. Department of Transportation (DOT) has issued an Enforcement Notice Regarding “Refunds By Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel.” The notice clarifies DOT’s expectations regarding the provision of refunds to passengers in the event of a cancelled flight, significant schedule change, or significant delay in light of COVID-19.

Background

DOT has experienced an increase in complaints from ticketed passengers in recent weeks alleging that they were denied refunds from airlines for cancelled flights and are instead receiving vouchers or credits for future travel that “are not readily usable.” While DOT acknowledged the “unprecedented impact on air travel” from COVID-19, it reminded U.S. and foreign airlines of their obligation to offer the option of a prompt refund to passengers if their flights are cancelled or significantly delayed, including for reasons outside the airline’s control. The DOT notice, however, does not prohibit an airline from offering a passenger a voucher or credit in lieu of receiving a refund as long as the passenger is adequately informed about his/her right to receive a refund.

Airline Obligations to Provide Refunds for Flight Cancellations, Significant Schedule Changes, or Significant Delays

DOT identified three steps airlines must take to ensure their compliance:

1. Airlines, “in a timely manner,” must contact any passengers to whom they provided vouchers for flights that were cancelled or significantly delayed to notify those passengers that they have the option of a refund.
2. Airlines must review and if necessary update their refund policies and contract of carriage provisions to provide for refunds to passengers if the airline cancels a flight or makes a significant schedule change. DOT may take enforcement action if it finds contract provisions or statements (e.g., website postings, emails to customers) that would “purport to deny” passengers a refund.
3. Airlines must review with their personnel, including reservationists, ticket counter agents, refund personnel, and other customer service professionals, the circumstances under which refunds should be offered.

The full text of the DOT notice can be found here.