On April 3, the US Department of Transportation issued an enforcement notice telling airlines that they must pay refunds for flights that they have canceled in response to the novel coronavirus pandemic.
According to the statement, airlines are obligated to provide refunds, including the full ticket price and service fees, even when the cancellation is a result of a flight disruption outside the airlines' control, such as government travel restrictions.
"Airlines have long provided such refunds, including during periods when air travel has been disrupted on a large scale, such as the aftermath of the September 11, 2001 attacks, Hurricane Katrina, and presidentially declared natural disasters," the statement read.
The DOT says the statement was motivated by an increase in complaints from passengers who said airlines were denying refunds and offering travel vouchers instead. But the agency says the dramatic reduction in flight scheduling leaves passengers with flight vouchers that are virtually unusable.
"Although the COVID-19 public health emergency has had an unprecedented impact on air travel," the statement said, "the airlines’ obligation to refund passengers for canceled or significantly delayed flights remains unchanged."
The DOT said it will use "prosecutorial discretion and provide carriers an opportunity to become compliant before taking further action." According to the statement, the department will refrain from enforcement action against airlines that have provided travel vouchers as long as those airlines promptly contact passengers to notify them that they have the option of a refund and clarifies internal and external policies to clearly state refunds are available.
Recent cancellations and schedule cuts resulting from the novel coronavirus pandemic have left the airline industry with approximately $35 billion in refund liabilities, according to a recent estimate from the International Air Transport Association, a trade association for the airline industry.