IATA HOLDS CONFERENCE CALL ON DOT’S AIRLINE TICKET REFUNDS NPRM
October 17, 2022
On September 22, 2022, the International Air Transport Association (“IATA”) held a conference call to discuss the components of DOT’s Notice of Proposed Rulemaking on Airline Ticket Refunds and Consumer Protection.
It is strongly encouraged that covered carriers carefully study DOT’s proposal as it is unusually impactful and if there are issues of concern to your operation, to file comments. The more specific operational issues that carriers can identify, and bring to DOT’s attention through public comments, the greater the likelihood that certain problematic requirements proposed in the rule can be revised before the regulations are finalized. Another option would be to prepare and submit a short filing in support of IATA’s more detailed comments (which are still being prepared). Comments are due November 21, 2022, and we are happy to assist you in preparing and submitting a comment if you are interested.
The proposed rule asks for comments on a number of key topics and issues and proposes to regulate the industry in troublesome ways. We think the following topics are particularly important for comments:
- The rule proposes to put into law the Department’s longstanding interpretation that passengers must receive full refunds (not vouchers) for cancelled or significantly delayed flights. This was not an issue of concern pre-pandemic, and it appears DOT is using a once in a lifetime occurrence to push through unnecessary regulations that would require cash refunds not vouchers for flights that are cancelled or significantly delayed for any reason.
- The rule also proposes to require carriers to provide non-expiring vouchers to passengers holding non-refundable tickets if such passengers are unable to fly due to certain pandemic related reasons including government-mandated travel bans, closed borders, or if passengers are advised not to travel due to personal health risks or concerns, or the health risks or concerns of other passengers. Carriers would have to provide refunds in the original form of payment if they receive significant government assistance. This requirement is troublesome because it places few “guardrails” on situations where passengers can voluntarily cancel their reservation and receive a voucher and essentially makes non-refundable tickets refundable in many circumstances.
- The rule asks for comment on whether DOT’s proposed refund rules should be applied to flights operating between two foreign points. DOT does not have jurisdiction to regulate flights between foreign points operated by foreign air carriers and any attempt by DOT to do so would be extraterritorial.
- The proposed rules may also generate operational conflicts in terms of carriers’ compliance with existing passenger rights regimes in the EU and Canada, as definitions and obligations across these existing regimes are not aligned with DOT’s proposal.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665).
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