DOT ENFORCEMENT NOTICE REGARDING REFUNDS BY CARRIERS
April 6, 2020
On April 3, 2020, the U.S. Department of Transportation (DOT) issued an “Enforcement Notice Regarding Refunds by Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel,” available here.
According to DOT, there have been 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 cancelled or significantly delayed. DOT issued the Enforcement Notice to remind carriers and passengers that although the COVID-19 epidemic has had an unprecedented impact on air travel, airlines’ obligation to refund passengers for cancelled or significantly delayed flights remains unchanged. As such, DOT states that carriers still have an obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule, and the cancellation is through no fault of the passenger. Under existing rules that if a passenger is owed a refund, an airline, travel agent or online travel agency must process it within seven business days if the passenger paid by credit card and 20 business days if the passenger paid by check.
However, due to the COVID-19 epidemic, DOT says it will exercise prosecutorial discretion and provide carriers an opportunity to become compliant before taking further action. Specifically, DOT has advised it will refrain from pursuing enforcement action against a carrier that provided passengers vouchers for future travel in lieu of refunds for cancelled or significantly delayed flights during the COVID-19 public health emergency so long as:
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The carrier contacts, in a timely manner, the passengers provided vouchers for flights that the carrier cancelled or significantly delayed to notify those passengers that they have the option of a refund;
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The carrier updates its refund policies and contract of carriage provisions to make clear that it provides refunds to passengers if the carrier cancels a flight or makes a significant schedule change; and
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The carrier reviews with its personnel, including reservationists, ticket counter agents, refund personnel, and other customer service professionals, the circumstances under which refunds should be made.
The subject of cancellations and refunds is particularly nuanced, and we encourage you to contact us if you have any questions, or would like to discuss this topic on a case specific basis.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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