Democratic bill would require cash refunds for all canceled airline tickets during pandemic

Democratic senators introduced legislation Wednesday requiring airlines refund billions of dollars to customers who canceled flights due to the COVID-19 pandemic.

The cash refunds from major airlines and third-party ticket sellers would be issued regardless of whether the airline canceled the flight or if the passenger backed out of their ticket, according to a summary of the bill introduced by Sens. Ed Markey (Mass.), Elizabeth Warren (Mass.), Richard Blumenthal (Conn.), Chris Murphy (Conn.) and Kamala Harris (Calif.).

While airlines are already required to offer cash refunds for flights they cancel, air carriers are not under the same obligation for flights canceled by customers.

Airline activity has dropped off dramatically since March with the increased spread of the coronavirus and the majority of Americans under stay-at-home orders.

Department of Transportation figures showed that air travel was down 51 percent in March compared to the same month in 2019. It plunged 93 percent in the beginning of May, according to Airlines for America, a trade association for major North American airlines.

Senators backing the legislation conducted an earlier investigation that found major U.S. air carriers were sitting on approximately $10 billion in customer payments over canceled flights and only offered travel vouchers and credits toward future flights.

“Americans need cash in their pockets to pay for food, housing, and prescriptions, not temporary credits toward future travel,” Markey said in a statement Wednesday.

Congress provided up to $25 billion in relief for airlines as part of the $2.2 trillion CARES Act signed into law March 27. Portions of the coronavirus relief package were to be used for payroll grants for employees and low-interest loans and negotiated on an individual basis between the Treasury Department and U.S. airlines.

“In light of this pressing need, and an unprecedented multibillion-dollar bailout, it’s absolutely unconscionable that the airlines won’t give consumers their money back,” Markey said. “Airlines already have a moral responsibility to give cash refunds for all cancelled tickets during the coronavirus pandemic. My new legislation will give them a legal responsibility, too.”