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Why airline passengers are not getting their cash refunds

A growing number of airline passengers are furious that airlines are providing travel credits rather than cash refunds for canceled flights amid the coronavirus pandemic.

“You are screwing taxpayers”,

said Senator Richard Blumenthal (D-Connecticut) put airline executives on the spot about the problem at a hearing last week. The hearing was held before the Senate Committee on Commerce, Science, and Transportation.

The hearing featured testimony from airline industry executives.

Senator Blumenthal’s presentation

The Senator expressed his opinion:

“When you come to us and ask for more assistance, my mind goes back to the bailout we’ve just given you. More than $25 billion in taxpayer money and now in effect you are continuing to mislead and deceive those taxpayers who have given you that bailout. In effect, you are, forgive me, screwing the very taxpayers whose money is going into your pocket.”

airline passengers cash refunds, san diego aerial
Airliner over San Diego, California. Photo: CaptainJetson.com.

Response to why airline passengers are not receiving cash refunds

Representing the airlines, Nicholas Calio, the head of Airlines for America (A4A), responded. Airlines for America is the trade and lobbying group that represents the major airlines in the U.S.

Calio said he did not believe the airlines were misleading its passengers.

He continued,

“It ought to be clear to some passengers receiving vouchers that they’re entitled to a refund. If a passenger under current law and regulation is entitled to a cash refund, they’re getting it.”

Mr. Calio summarized his argument by pointing out that airlines are faced with “two bad choices” amid the pandemic:

  1. “You can insist that everyone gets a refund who canceled the flight themselves instead of a voucher.”
  2. “Or you can drive the companies towards bankruptcy, which would happen very quickly at the rate things are going.”

Mr. Calio further stated that the airlines are fighting for survival.

airline ticket refunds, new york aerial
Airliner over New York City/Brooklyn. Photo: CaptainJetson.com.

Airline refunds are exceeding revenue

Negative revenue is larger than bookings right now during the pandemic. So, to the defense of the airline industry, no business can sustain operation for long with ongoing negative revenue.

The voucher-solution gives our airlines breathing space while figuring how to sustain the business until the turnaround comes.

Money allocated to airlines from the CARES Act

Calio said he was not coming back to the Government for additional CARES Act-type airline funding:

“It’s the hope of our members that this money that we got previously, and the loan program already in place, will be the bridge to the future that we need and not have to come back and ask for more money.”

From the senate hearing about airline cash refunds from canceled flights. Video: YouTube.

Senator Markey’s view

Senator Ed Markey (D-Massachusetts) pointed out that many Americans need money as badly as the airlines do.

“I recommend very strongly to you that given the federal government’s help to the airlines, that the airlines should return try to help these passengers get their money back,”

Markey said.

“I think that would be the right thing to do. They need it just as much as the airlines do right now. It’s just a very difficult situation all around.”

There are two sides to every argument. How do you feel about the airlines not giving airline passengers cash refunds? You can contact us here.

Featured Image: CaptainJetson.com.

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