The U.S. Department of Transportation issued a second Enforcement Notice regarding airlines' obligations to provide refunds in light of COVID-19's impact on air travel. DOT issued the guidance after seeing consumer complaints skyrocket from about 1,500 complaints in an ordinary month to more than 25,000 complaints per month in March and April.
In a statement, Secretary of Transportation Elaine L. Chao said, "The Department has received an unprecedented volume of complaints from passengers and is examining this issue closely to ensure that airlines' policies and practices conform to DOT's refund rules. The Department is asking all airlines to revisit their customer service policies and ensure they are as flexible and considerate as possible to the needs of passengers who face financial hardship during this time."
In the Enforcement Notice, DOT reminded airlines that they "have an obligation to provide a refund to a ticketed passenger when the carrier cancels or significantly changes the passenger's flight, and the passenger chooses not to accept an alternative offered by the carrier."
DOT said, however, that airlines do not generally have an obligation to provide refunds to consumers if they want to cancel or change their ticket "due to concerns related to the COVID-19 public health emergency." DOT warned that, when reviewing refund complaints against airlines, it will closely examine any allegation that an airline misled a passenger about the status of a flight to avoid having to offer a refund.
DOT also said that airlines may not retroactively change refund policies. DOT wrote, "The refund policy in place at the time the passenger purchased the ticket is the policy that is applicable to that ticket."
In addition, while the DOT acknowledged that airlines can offer consumers alternatives to a refund, such as credits or vouchers, they should not mislead consumers about their right to receive an actual refund. In addition, DOT warned that any restrictions on credits and vouchers offered, such as the period in which credits must be used or any fees charged for using the credit, must be clearly disclosed to consumers.
Finally, echoing the FTC's "flexible and reasonable" approach during this period, DOT said that, "Given the unprecedented impact of the COVID-19 public health emergency on the aviation industry, the Aviation Enforcement Office intends to exercise its enforcement discretion and first provide carriers and ticket agents an opportunity to become compliant."
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.
