Airlines issued billions in vouchers but can consumers get cash refunds

From today’s MarketWatch Online:

While airlines are providing refunds when they cancel flights, very few carriers are doing so when a customer proactively chooses to cancel a trip because of the coronavirus outbreak, a new report from a group of Democratic lawmakers charges.

U.S. Senators Edward Markey, Elizabeth Warren, Richard Blumenthal and Kamala Harris released the findings of an investigation into airline procedures in the midst of the global coronavirus pandemic.

Air travel has all but come to a halt as the number of COVID-19 cases around the world has continued to grow. Passenger volume is down some 97%, according to industry trade group Airlines for America, reaching levels not seen since the 1950s. The average flight today is only transporting 10 passengers, down from around 100 before the coronavirus crisis, the group notes.

As the coronavirus crisis worsened, airlines quickly began adopting relaxed policies allowing passengers to receive travel vouchers and to rebook trips without incurring fees if they wanted to change their travel plans. But airlines have been stingier when it comes to providing full refunds.

In total, U.S. carriers are sitting on more than $10 billion in customer cash in the form of vouchers, based on the lawmakers’ calculations. While most airlines refused to confirm the value of the vouchers they had extended, the senators used data provided by JetBlue to reach that amount.

“If these companies released that money back to the public, it would provide a significant stimulus for struggling families,” the senators said in a joint statement. “That’s why we once again urge the airlines to end their anti-consumer policies and offer real refunds during this emergency.”

The Democratic lawmakers sent inquiries to 11 airlines. JetBlue said in its response to the senators’ inquiry that it issued more than $20 million per day in vouchers to consumers in the first few weeks of March. The senators reached the $10 billion figure based on JetBlue’s domestic market share, assuming that the trend was even across the month of March and across the industry.

Read the complete article here.