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Hope for airfare refunds....maybe

Let your Senator hear your financial pain, and let them know you are a voter

The proposed law would require airlines to promptly offer a cash refund whether the flight is canceled by the airline or the passenger decides not to fly. It would also require that any voucher or credits that passengers receive in lieu of a refund remain valid indefinitely, rather than for the one or two years the airlines are currently allowing.

Posted by
700 posts

As written that bill is going nowhere. Unconstitutional.
Fed regs already require a refund for flights cancelled/altered by the airline. They could tighten that up and require the airlines to offer both refund and voucher at the same time (stop hiding it in the fine print).

But if you want to cancel because you just wanna (concern for the virus or the virus cancelled the event you were going to) and you bought a nonrefundable ticket. Nope. You bought nonrefundable. Part of your contract. Any statute attempting the rewrite that contract to allow you to cancel and get a refund would be a violation of the US Constitution Contract Clause. Simply not going to happen for previously purchased tickets. They could require such a refund but only for new tickets purchased as of the date the law is enacted.

Posted by
2329 posts

While I agree that airlines should be much more forthcoming in making consumers aware of the refund option when airlines cancel flights, I think this bill is a terrible idea. It sounds great. Woo-hoo! A refund for you... and for you... and for you. But it would push cash burn at the airlines to an unsustainable level. Even the strong airlines would likely enter bankruptcy and the weak ones would likely liquidate.

The long-term consequence for consumers is markedly higher airfares due to (1) decreased competition, (2) the sequelae of COVID-19 operations, and (3) the need for airlines to price fares with consideration for future post hoc government-dictated pandemic refund mandates. Will cheap non-refundable fares even exist? Many consumers who comfortably find room for flying in their budget now may find themselves priced out of that transportation option in the future.

And what are our enlightened European friends doing during these times? Well, 12 countries asked the EU to suspend refund requirements for airlines when airlines cancel flights to avoid mass bankruptcies.

So, my senators will hear, "Be like the enlightened Europeans! Please don't vote in favor of this terrible bill!"

Posted by
5651 posts

The US "plan" makes a lot of optimistic assumptions. One being that the temporarily bailed-out airlines will still be around "indefinitely" to give those vouchers value. Second, that they will still be able to give any cash refunds after the taxpayer bailout money runs out October 1. The next plan will be for the government to guarantee the refunds - just in time for the election.

Nobody should be making any new reservations with the expectation they will be refundable.

Posted by
3151 posts

If I were to follow your framework: I would indeed let my Senators’ offices know that I am against this, that I am a voter, and that I in fact DID receive my refunds from Delta Airlines that I requested, both for a cancelled international itinerary and another international itinerary that was NOT cancelled, WITHIN 24 HOURS after I spoke with a Delta agent.

I knew to request a refund because I read about in NY newspapers including the WSJ & heard on numerous news reports that airlines were required to refund airfares for flights they cancel even if airfare were nonrefundable which mine were.

Also, I would ask the Senators’ offices why only the airline industry is targeted and not hospitality including hotels, AirBNB, etc. Countless many are not refunding prepaid reservations that are as nonrefundable as airline fares are.

As I have no respect for politicians, I will not waste my time calling their offices.

Posted by
2637 posts

This policy should apply to any industry that is being bailed out with my tax money. As our pastor says, when you accept money from the government, you are giving them say in your organization.

Posted by
20972 posts

And you cannot (should not) make anything indefinitely when it comes to refunds. That creates an overhang on the balance sheet that is unpredictable and therefore, unmanageable.

Posted by
1106 posts

In general I’m not comfortable with laws that change contracts after the fact. But these are extraordinary times so perhaps this is one of those times. But there’s a more pressing issue. Unless air travel rebounds quicker and or more vigorously than forecast, airlines will move to offset the negative cash flow. The most obvious way is to layoff more employees than originally planned come Oct 1. So it’s a difficult trade off. Cash going to customers but coming from the pockets of employees.