US Government to Airlines: Stop Denying Refunds for Canceled Flights

U.S. regulations require airlines to give travelers a full cash refund if they cancel a flight – no exceptions. And as coronavirus has wracked the travel industry, airlines are canceling more flights than ever to limit their losses.

Thrifty Tip: Deciding whether to cancel your upcoming trip? You won't get a refund if you cancel on your own, but will instead get a voucher for future flights. So it's better to wait and see if the airline cancels your flight.

But some airlines aren't playing by the rules. United, JetBlue, and other carriers have refused to give out the refunds they legally owe customers, insisting they're only giving out vouchers.

Now the Department of Transportation is weighing in. In an enforcement notice issued Friday, the U.S. airline industry's main regulator made clear that carriers need to issue refunds when they cancel flights. Coronavirus is no excuse.

“The Department is receiving an increasing number of complaints and inquiries from ticketed passengers, including many with non-refundable tickets, who describe having been denied refunds
for flights that were canceled or significantly delayed,” the order states. “The longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier’s control.”

The Department of Transportation says it will be more lenient with offending airlines if they reach out to customers who previously took a voucher to offer a refund option and clearly updates its policies to make clear that refunds are available in the event of flight cancellations.

“The Aviation Enforcement Office will monitor airline policies and practices and take enforcement action as necessary,” the notice concludes.

What the Law Says

All U.S and foreign air carriers are required to give a full cash refund, including taxes and fees, to passengers for flights to, within, or originating in the U.S. that are canceled by the airlines themselves.

What's more, passengers are also due a full cash refund if the airline makes a significant schedule change that the passenger chooses not to accept as an alternative flight. The law gives airlines more leeway to airlines to decide what a “significant schedule change” means.

Here's a direct snippet from the regulations:

If your flight is canceled and you choose to cancel your trip as a result, you are entitled to a refund for the unused transportation – even for non-refundable tickets. You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.

What to Do to Get Your Money Back

Only time will tell whether guilty airlines will start following the law.

But if you don’t want a voucher for future travel, don’t settle for one. If you already took a voucher on a flight that your airline canceled, you could get your money back.

Here are some tips to keep in mind.

• If your flight hasn’t been canceled, wait! That may change, and if it does, you could get your money back.
• If you can’t find the option to process a refund online, call your airline – or better yet, send them a direct message via Twitter.
  • If you booked through an OTA like Expedia or KAYAK, you’ll have to call that agency.
• Cite this new enforcement notice as well as your airline’s “contract of carriage” – both spell out that they’re required to give you a refund if they cancel your flight.
• If the airline refuses to give you the refund you are legally owed, hang up and call again – or ask to speak to a supervisor.
• You can initiate a credit card chargeback with your bank, though this should be your last resort.
• File a complaint with the Department of Transportation – just don’t expect an answer in a hurry.

Bottom Line

The federal government is making it clear that there's no excuse for airlines to deny the refunds they're legally required to give when canceling a flight. Here's hoping airlines see the error of their ways.