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DOT mandates that airlines must offer refunds over vouchers for canceled flights during COVID-19 outbreak

The move follows pushback that Southwest received over its Early Bird refund policy

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Photo (c) Marta Ortiz - Getty Images
As the COVID-19 crisis continues to rage across the U.S., many industries are working to figure out how they can continue to do business. The airline industry, for example, has flipped back and forth between offering vouchers and refunds to travelers who have had their travel plans affected by the outbreak.

But some of the ambiguity over how carriers should be responding was put to rest on Friday. In an Enforcement Notice, the Department of Transportation (DOT) said that airlines will need to provide refunds to consumers in some cases.

“In the context of the 2019 Novel Coronavirus (COVID-19) public health emergency, that U.S. and foreign airlines remain obligated to provide a prompt refund to passengers for flights to, within, or from the United States when the carrier cancels the passenger’s scheduled flight or makes a significant schedule change and the passenger chooses not to accept the alternative offered by the carrier,” the DOT commented in a news release.

“The obligation of airlines to provide refunds, including the ticket price and any optional fee charged for services a passenger is unable to use, does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).”

DOT to enforce compliance

As other federal regulators have found during the pandemic, the smart move is siding with the consumer, no matter what it takes and how much it costs.

The DOT says it was swamped with complaints and inquiries from ticketed passengers -- including many from travelers with non-refundable tickets -- who got nowhere asking the airlines for refunds; most carriers offered only vouchers or credit for future travel.

We probably haven’t seen the last of the DOT exercising its will, either. 

“Because the COVID-19 public health emergency has had an unprecedented impact on air travel, DOT’s Aviation Enforcement Office will exercise its enforcement discretion and provide carriers with an opportunity to become compliant before taking further action,” the Department wrote.

“However, the Aviation Enforcement Office will monitor airlines’ refund policies and practices and take enforcement action as necessary.”  

Southwest backs down following backlash

The DOT’s actions are sure to be popular among travelers, who have lashed out at companies in cases where they thought they deserved a refund. 

Southwest, for example, found out that it was on the verge of becoming Southworst for sticking to its guns regarding its no-refund policy for EarlyBird fees. That is until the clamor from unhappy Southwest customers got to be so loud that the airline had no choice but to reverse course and announced a temporary change.

Prior to the DOT’s announcement, the airline posted a revamped policy on its community forum which stated that passengers with travel dates between Mar 1, 2020 - May 31, 2020 who cancel their reservations can request a credit for EarlyBird fees paid. The company said the voucher would be good for one year and could be used for a future flight (however, not for Early Bird fees).

Southwest typically gets good reviews from ConsumerAffairs reviewers, and this move is a bit of a head-scratcher in light of the pro-consumer moves we’ve watched the airline make over the years -- not to mention the share of positive tweets Southwest has gotten since the COVID outbreak began. ConsumerAffairs reached out to the Southwest and received the following explanation on the carrier’s stance, though it may be subject to change given the new regulatory stance from the DOT:

For all Customers with travel dates between March 1, 2020 and May 31, 2020:

Customers may now request a Southwest LUV Voucher in the amount of the non-refundable EarlyBird purchase(s) on the booking record. The voucher will be issued to the purchaser of the reservation (not each flyer), upon request, and may be applied toward future Southwest fares, excluding government-imposed segment fees, taxes, or ancillary products such as EarlyBird. The voucher is valid for one year from the date of issuance.

We hope this new exception provides more flexibility for our Customers who purchased EarlyBird but choose not to travel during these dynamic times. We look forward to welcoming each Customer onboard another Southwest flight one day very soon.

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