DOT coming down on airline cancellation policies

The U.S. Department of Transportation is now coming down hard on airlines that have been playing a wild game of semantics when it comes to refunds.

The long-standing DOT policy has been that if a customer cancels a nonrefundable flight, they are not entitled to a refund as per the terms of the contract of carriage. However, if an airline cancels the flight, the customer is then entitled to receive a refund if that is what they want to do.

This policy has been enforced after catastrophic events like 9/11, hurricane Katrina, and other disasters.

After the cascade of canceled flights over the past few weeks, some airlines like United have decided to push back on offering refunds.

The pushback has come in different forms. In some cases, the airlines have claimed that flights were merely “rescheduled” and not canceled. In other cases, travel vouchers were offered instead of refunds.

Regardless of what the airlines did, the end result has been the same: many have struggled to receive refunds that they were entitled to.

Well, the DOT just came in to make things clear.

The DOT warned airlines that they must issue prompt refunds to passengers when their flights are canceled or “changed significantly.”

The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).

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.

According to the DOT Notice, the Aviation Enforcement Office will “exercise its prosecutorial discretion and provide carriers an opportunity to become compliant before taking further action.”

The office will refrain from pursuing enforcement against carriers that offered travel vouchers for future travel in lieu of refunds for cancelled or significantly delayed flights during the COVID-19 public health emergency so long as:

 (1) the carrier contacts, in a timely manner, the passengers provided vouchers for flights that the carrier cancelled or significantly delayed to notify those passengers that they have the option of a refund;

(2) the carrier updates its refund policies and contract of carriage provisions to make clear that it provides refunds to passengers if the carrier cancels a flight or makes a significant schedule change;

and (3) the carrier reviews with its personnel, including reservationists, ticket counter agents, refund personnel, and other customer service professionals, the circumstances under which refunds should be made

One of the biggest issues here has been clarity.

There has been a lot of confusion and lack of clarity when it comes to what constitutes a cancellation requiring a refund. It looks like these new standards are designed to address that lack of clarity.

I think this is the right decision by the DOT and I am glad that they are speaking out about this problem because I have received a lot of comments and also messages about people getting screwed over on the refunds.

The biggest question though is what constitutes a “significant change?”

It seems like it would have been easy to insert a hard time requirement for that criteria. For example, they could have stated that a significant change is any change over four hours or something along those lines.

But it seems like it has been left to be interpreted which could cause even more clarity issues. Either way, hopefully that definition will get resolved soon and many customers who have been entitled to a refund will be able to get what they deserve.