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Airline refunds could get a lot easier with new bill

WASHINGTON — Since the start of this year, 88,161 flights have been canceled by major American airlines, far more than any recent year except 2020, when the coronavirus ended most recreational and business travel. Fliers eager to see family, friends and colleagues for the first time in two years have found themselves stranded at airports, as pilot shortages, new pandemic waves and extreme weather led to record cancellations.

And although airlines have tried to accommodate the legions of exasperated people with rebookings and meal vouchers, they have frequently avoided offering full refunds, despite a federal Department of Transportation rule requiring them to do so. The result, a 2021 investigation by the Wall Street Journal found, was that the nation’s four largest airlines “had $10 billion in unused travel credits on their books at the end of 2020” — all money that could have been returned to consumers.

But a new measure being introduced Monday by Sen. Edward Markey of Massachusetts and Rep. Steve Cohen of Tennessee, along with other Democrats in both chambers of Congress, would mandate that airlines forthrightly offer travelers cash refunds as opposed to other forms of compensation like vouchers.

“The airlines often push vouchers even in cases where passengers are entitled to cash refunds. Consumers must be made aware by the airlines that they have a cash option,” says William McGee, an aviation expert at the American Economic Liberties Project.

(This reporter, for example, recently discovered that his own Southwest Airlines vouchers from 2020 had expired.)

Perhaps even more significantly, the law would allow fliers to claim a full refund if they cancel a flight up until 48 hours of the scheduled departure time.

“Something like this is long overdue,” says John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League. He told Yahoo News that Markey’s bill, if passed, would give American fliers some of the protections already enjoyed by their European and Canadian counterparts.

“Americans have a right to these refunds, and they are sick and tired of fighting the airlines for them,” Markey told Yahoo News in a telephone interview. “Booking travel months ahead is hard and stressful. Plans change. Consumers should not be forced to eat that cost if they’ve given airlines reasonable notice.”

Known as the Cash Refunds for Flight Cancellations Act, the measure is being introduced during an acutely chaotic moment in American travel. With plans uncertain and budgets strained, the ability to easily claim a refund could return hundreds or even thousands of dollars to individual consumers.

The act would mandate that a refund be offered within 30 days of a canceled flight. Airlines could continue to offer vouchers too, but not in a way that conceals the refund option that many passengers would probably prefer — if they knew about it. And the vouchers, according to Markey’s office, would have to be “redeemable indefinitely” instead of expiring after a year or two.

“They love having these vouchers, because it’s basically free money on their books,” Breyault told Yahoo News.

Co-sponsors of the legislation include Sen. Elizabeth Warren of Massachusetts and Rep. Jamie Raskin of Maryland. There is no Republican support yet, and the bill’s prospects are unclear. Lawmakers, who generally fly home to their districts, are certainly acquainted with the headaches of airline travel. And policies that give constituents cash tend to be popular.

"Flight cancellations are happening all too frequently. My American flight was canceled just last week. The flying public does not expect or want to get credits when the airlines are the cause of the cancellation, especially when they already benefited from a multibillion-dollar bailout from American taxpayers. Our bill remedies this situation," Cohen said in a statement.

Markey and other Democrats — including then-Sen. Kamala Harris of California, today the vice president of the United States — introduced a similar measure in May 2020. Since then, and especially in recent months, the zeal for air travel has returned. But the coronavirus has not gone away, continuing to create logistical nightmares and resulting in outlandish scenarios that speak to pervasive desperation in the aviation sector.

The airlines say they are being unfairly maligned for global disruptions that no one could have predicted. Hannah Walden, a spokesperson for the trade group Airlines for America, said that “member carriers comply with federal laws and regulations regarding cash refunds. Carriers strive to provide the highest level of customer service and are committed to working with travelers to address their individual circumstances.”

Despite profuse apologies from airline executives, little has changed during the travel-heavy summer months, which have also been marked by spells of extreme weather. In late June, Delta offered passengers $10,000 to give up their seats on an oversold Michigan-Minneapolis route, or about $167 for each minute of the hourlong flight.

Transportation Secretary Pete Buttigieg met over video link with airline executives to address the issue. Shortly after the meeting concluded, he learned that his upcoming flight from Washington, D.C., to New York City had just been canceled.

“The travel system is broken,” Markey says, charging that U.S. airlines “disappoint and exploit their customers.”

Though the airlines received $54 billion from the federal government to stave off an industrywide collapse during the pandemic, survival has had costs of its own. Many middle-aged pilots took early retirement, while new pilots were slow to enter civil aviation. During the height of the pandemic, carriers sent jets into “hibernation.” When travel started to pick up again in late 2021, those planes had to undergo an involved fleet reentry process.

“It’s difficult to overstate just how much the COVID-19 pandemic has devastated airlines,” a McKinsey report found in 2021. But the same report and many others have faulted the airline industry for inefficient and unimaginative operations.

“The airlines have been very good this summer at pointing the finger at everyone but themselves for the cancellations,” says Breyault, who believes that the carriers that took billions from the federal government should have done more to prepare for the return of travel once the pandemic subsided.

Some civil aviation observers are skeptical of Markey’s measure. “While that’s a form of consumer protection, it doesn’t do much to solve the underlying problem, which right now is staff shortages,” Ethan Klapper, senior aviation reporter at travel website The Points Guy, told Yahoo News (where he formerly worked) in a text message. “You could perhaps even argue that it might even make things worse — instead of using that money to hire more staff, airlines will now have to compensate passengers for canceled flights.”

Markey unsurprisingly disagrees. “We have to protect passengers on planes,” he says. Those passengers are already paying 25% more for tickets this summer than they were in the summer of 2021. Meanwhile, airlines are seeing a return to profitability.

And he hopes, perhaps unrealistically, that Republicans will join his call for greater airline accountability. “I don’t think consumer protection should be a partisan issue,” Markey told Yahoo News.

Republicans were vociferous in their opposition to mask mandates on airplanes and other forms of transport. They have been silent on cancellations. “I don’t understand why a Republican wouldn’t want to support a bill like this,” Breyault told Yahoo News. “Everybody flies.”

This article originally appeared on Yahoo!

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