US Airlines Offer Vouchers Over Refunds Despite a $50 Billion Bailout

May 15, 2020

US Airlines Offer Vouchers Over
Refunds Despite a $50 Billion Bailout

Airline information boards in terminals across the world are covered with cancelled and delayed flights, something we would generally dread seeing. Yet, grounded flights and obsolete travel have become part of our new normal, at least for the time being.

With air travel coming to a near grinding halt, the airline industry has undoubtedly struggled to adapt to the unprecedented impact of the coronavirus pandemic. In support of keeping airline companies alive, and more importantly keeping airline employees on the payroll, Congress and the US Treasury Department approved a $50 billion-dollar taxpayer bailout comprised of both grants and loans aimed at avoiding mass lay-offs and greater economic downturn:

American Airlines received $5.8 billion ($4.1 billion in grants, $1.7 billion in low-interest rate loans) from the bailout fund as part of U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act. Delta received $5.4 billion ($4.1 billion in grants, $1.6 billion in low-interest rate loans) and United accessed $5.0 billion ($3.5 billion in grants, $1.5 billion in low-interest rate loans) to help weather the storm.

The $50 billion lifeline to the industry is a gift from taxpayer to shareholder. While it remains pivotal to prop up a vital industry to provide payroll support over bankruptcy, consumers have been left behind in favor of a more “corporate-focused” recovery plan.

After receiving the federal bailout, airline companies continue to offer consumers vouchers over refunds, leaving many travelers with no relief in a time when many could use the money. Many airlines have even turned to deceptive behavior, lagging to put cancellations into reservation systems in hopes consumers use a conservative approach and opt for vouchers over refunds in a “its better than nothing” scenario. Some airlines are only advertising vouchers and make no mention of refunds. By delaying or omitting important information for the advantage of the airline industry, many consumers have been left more confused and misled than ever.

Flight disruptions outside of carriers’ control have occurred in the past. During the September 11 attacks and Hurricane Katrina, airlines complied with appropriate refund policies. According to U.S. Transportation Department, under U.S. regulations, airlines have a long-standing obligation to provide refunds to travelers for cancelled flights, and the coronavirus pandemic is no exception:

"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,'' the DOT said in its enforcement notice.

Ultimately, there are many airlines neglecting the pandemic’s economic toll on consumers, even with federal aid and government support on their side. President Donald Trump intends the bailout agreement to “fully support airline industry workers and preserve the vital role airlines play in the US economy.” The airline industry will be supported by bailouts even with demand and revenue losses, but relief for consumers during these uncertain times has not been made easily available.

Keller Rohrback cares deeply about the impact the COVID-19 pandemic has had (and will continue to have) on consumer rights and experiences. If you have been denied a refund for a flight cancelled by an airline, please visit our flight cancellation investigation page or contact us at (800) 776-6044 or for a consultation at no cost to you.

To learn more about the many ways we’re supporting our clients and communities during the COVID-19 crisis, please go here.

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