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senate Bill S. 3727

Should Airlines be Required to Offer Cash Refunds to Customers for Flights Canceled Due to COVID-19?

Argument in favor

Customers deserve to receive refunds for flights they are unable to take during the COVID-19 pandemic, regardless of the reason for the cancellation. Returning customers’ cash to them during the economic crisis caused by COVID-19 should be a priority for airlines, which shouldn’t be allowed to treat their customers like piggy banks to help them ride out the COVID-19 pandemic.

J.Watkins's Opinion
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07/12/2020
Should be required to offer refunds. They should also be allowed to provide other compensating options to customers. Let the consumer have choices. This provides potentially mutualistic benefits for both airline companies and the consumer. Most importantly, the consumer would be in charge of their money, not the government regulation nor the business.
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Dean's Opinion
···
07/12/2020
Yes; absolutely. The airlines accepted stimulus money so should pay passengers for cancellations. One airline will be laying off thousands in just a couple months; so, they be flush with our tax money.
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KansasTamale's Opinion
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07/12/2020
They shouldn’t be selling full flights. They shouldn’t be any traveling by plane without social distancing. I’ve flown a lot since 1973 and am appalled at the way people are treated today in airlines. The feeling I get when flying in America is the same I got when I had to ride a public bus in Guatemala - jammed together, sharing the bus with poultry & livestock while being stuffed in it like sardines. Social Distancing will never happen. So any flights canceled MUST BE REFUNDED
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Argument opposed

Requiring airlines to provide cash refunds to all passengers at a time when their business is sharply down could push many airlines into financial insolvency. This could, in turn, cause bankruptcies, layoffs, and other economic impacts that would hurt millions of workers and cause worse harm than airlines’ current policy of giving customers vouchers for future travel where possible.

Brian's Opinion
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07/12/2020
No, I don't think airlines have enough cash for this right now, and we can't keep giving them government loans to keep them solvent. I think credit for future flights with no fees for changes is fair, until such a time as those cannot be honored. If at some point the airline becomes insolvent and cannot honor flight credits, then the government may need to step in to ensure refunds to customers. I don't want more bailouts for big businesses when small businesses and individuals are still hurting and waiting for assistance.
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singinghawk926's Opinion
···
07/13/2020
From my POV the pandemic falls under the category of “force majeur”, similar to a hurricane or an earthquake which, while predictable to some degree, operate completely outside our ability to affect them in any way. Every one of us, including our corporate and government institutions, is completely unable to directly affect the occurrence of the virus. Our only influence is over how we respond to it. While I am a severe critic of much about corporations and the corporate oligarchy, the role of airlines and other businesses in maintaining some semblance of our economy and way of life can’t be minimized or disregarded. If we want to return to some similar, though likely severely changed, way of doing things in our country when the pandemic is over, we must bend where we can to ensure some of those contributors to our national economic engine survive intact, if possible.
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Just.Dave's Opinion
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07/13/2020
You gotta love the suggestion to stop selling planes at full capacity... What happened to global warming? Did it just stop when the pandemic showed up? And so we should just fly even more planes, but at half-capacity or less, and increase our carbon output? I'm all for your plan as trees and other plants require that carbon to live, so we're doing them a favor. I'm also all for you showing how much you are like the waves of the ocean, going back and forth which ever way the wind is blowing. Your madness is my entertainment.
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What is Senate Bill S. 3727?

This bill — the Cash Refunds for Coronavirus Cancellations Act — would require major airlines (defined as airlines with at least $1.5 billion in annual revenue) and third-party ticket sellers to offer full cash refunds for all canceled tickets during the coronavirus pandemic, no matter whether the airline canceled the overall flight or the passenger canceled their individual ticket. It would permit airlines and third-party ticket sellers to offer travel vouchers as an alternative to cash refunds as long as the vouchers are valid indefinitely and the offer included clear and conspicuous notice of the flyer’s right to a cash refund. 

The right to a cash refund would be retroactive, applying to any flight on or after March 1, 2020. This would allow passengers who previously received travel vouchers that they haven’t yet used to now ask for cash refunds instead.

Finally, this bill would mandate that cash refunds be available until 180 days after the end of the nationwide COVID-19 emergency declarations. This would give consumers six extra months of flexibility and peace of mind so that they don’t have to travel until they truly feel safe flying again.

Airlines would be allowed to pay for refunds using any of the financial assistance they received from federal COVID-19 relief funds, with the exception of funds that were designated for airline employees. This includes funds from the CARES Act, which set aside $50 billion for U.S. airlines.

Impact

Travelers; air travel; airlines; and refunds for travel canceled due to COVID-19.

Cost of Senate Bill S. 3727

A CBO cost estimate is unavailable.

More Information

In-DepthSponsoring Sen. Ed Markey (D-MA) introduced this legislation to require major airlines and third-party ticket sellers to offer full cash refunds for all cancelled tickets during the COVID-19 pandemic. Passengers would be eligible for the refund regardless of the circumstances surrounding the cancellation regardless of whether the airline cancelled an entire flight or the passenger themselves cancelled their individual tickets. In a May 13 press release, Sen. Markey argued that airlines have a  “moral responsibility” to give cash refunds for cancelled tickets during the COVID-19 pandemic:

“Americans need cash in their pockets to pay for food, housing, and prescriptions, not temporary credits toward future travel. In light of this pressing need, and an unprecedented multi-billion dollar bailout, it’s absolutely unconscionable that the airlines won’t give consumers their money back. 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.”

Original cosponsor Sen. Elizabeth Warren (D-MA) adds:

“Working families everywhere are being crushed under the weight of this pandemic, and they need cash returned to them now to help feed their loved ones, put a roof over their heads, and pay for their health care needs. I’m glad to partner with Senator Markey on a bill to require airlines to provide customers with full cash refunds—not travel vouchers—for flights canceled during this public health emergency and economic crisis.”

Rep. Steve Cohen (D-TN), sponsor of this bill’s House companion, says:

“At a time when Americans need cash to pay for food, housing and medical care, the airlines have a moral responsibility to return ticket money to consumers, especially after they received a multi-billion-dollar bailout from the American people.”

Anna Laitin, Director of Financial Fairness and Legislative Strategy at Consumer Reports, argues that offering refunds is the only fair policy in the current crisis:

“Offering vouchers might be a defensible policy in ordinary times, but in a crisis of this magnitude, it is simply unfair to deny refunds to customers who canceled their flights. The airlines should provide refunds to all customers whose travel plans were impacted by this unprecedented public health and economic crisis. With so many Americans out of work and facing financial hardship, a voucher for future travel is simply not appropriate or useful.  These consumers need their money back.”

Opponents of this legislation argue that it would hurt cash-strapped airlines that are teetering on the brink of insolvency due to a sharp decline in travel during the COVID-19 pandemic. In a blog post, International Air Transport Association (IATA) CEO Alexandre de Juniac wrote that requiring immediate cash refunds would bankrupt airlines, causing them to fold and leading to the loss of many jobs:

“Airlines cannot cut costs fast enough. And with the $35 billion owed to travelers for flights that could not or cannot take place, airlines face an imminent depletion of the cash they need, not just to maintain employment, but ensure that they will be around to support the economic revival when the COVID-19 crisis is over. Passengers have the right to get their money. They paid for a service that cannot be delivered. And in normal circumstances, repayment would not be an issue. But these are not normal circumstances. If airlines refund the $35 billion immediately, that will be the end of many airlines. And with that an enormous number of jobs will also disappear.”

As an alternative to immediate cash refunds, de Juniac defended the idea of offering vouchers for future travel once the COVID-19 crisis abates:

“So what’s to be done? The simple answer is that airlines need time. And that is why I am supporting airlines (and our partners in the travel and tourism sector) in their request for governments to delay the requirement for immediate refunds. We propose vouchers that could be used for future travel or refunded once we are out of this crisis period. This would buy the industry vital time to breathe—surviving the crisis so that they are ready to fly when better days arrive… Without this flexibility, airlines will collapse, and jobs will disappear. Accepting a voucher or delayed refund today will mean that the airlines will be around for when we have our freedom to travel restored.”

This legislation has five Democratic Senate cosponsors. Its House companion, sponsored by Rep. Steve Cohen (D-TN), has 36 Democratic House cosponsors. As of June 23, 2020, neither bill has received a committee vote.

The Consumer Federation of America, the National Consumers League, Consumer Reports, and the U.S. Public Interest Research Group (PIRG) support this legislation. The airline industry and air travel associations such as the International Air Transport Association (IATA) oppose this legislation.


Of NoteU.S. Public Interest Research Group (U.S. PIRG), which supports this legislation, reports that most airlines are only offering vouchers, not refunds, when passengers cancel their flights due to concerns about COVID-19. Additionally, according to U.S. PIRG, some carriers are offering vouchers as the default option when they themselves cancel flights and not letting customers know that they have the right to a full cash refund.

At present, customers are only protected for flights that were canceled or significantly delayed by airlines. They can also file consumer complaints with the U.S. Dept. of Transportation or dispute the charges with their credit card companies. Finally, airline customers who’d like to see this legislation passed can sign U.S. PIRG’s petition in support of this bill.

In mid-April, an investigation by Democratic legislators estimated that airlines could be holding billions of dollars’ worth of consumer money that they have refused to refund. Paul Hudson from FlyersRights.org, a nonprofit organization defending passenger interests, explains that this is because “the bottom line for many airlines is simple: Do whatever is possible to generate revenue and conserve cash now and worry about any consequences later.”


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / thomas-bethge)

AKA

A bill to provide for cash refunds for canceled airline flights and tickets during the COVID-19 emergency.

Official Title

A bill to provide for cash refunds for canceled airline flights and tickets during the COVID-19 emergency.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
    IntroducedMay 13th, 2020
    Should be required to offer refunds. They should also be allowed to provide other compensating options to customers. Let the consumer have choices. This provides potentially mutualistic benefits for both airline companies and the consumer. Most importantly, the consumer would be in charge of their money, not the government regulation nor the business.
    Like (100)
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    No, I don't think airlines have enough cash for this right now, and we can't keep giving them government loans to keep them solvent. I think credit for future flights with no fees for changes is fair, until such a time as those cannot be honored. If at some point the airline becomes insolvent and cannot honor flight credits, then the government may need to step in to ensure refunds to customers. I don't want more bailouts for big businesses when small businesses and individuals are still hurting and waiting for assistance.
    Like (63)
    Follow
    Share
    Yes; absolutely. The airlines accepted stimulus money so should pay passengers for cancellations. One airline will be laying off thousands in just a couple months; so, they be flush with our tax money.
    Like (61)
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    Yes they should offer cash refunds. Who knows when it will be safe to fly again, maybe 2021 after the vaccine is available. Until then many people are out of work and need the money now, not travel later! And individuals only received $1200 if their income was low enough while airlines received billions and are requesting more, not to mention 2017 tax break legislations large businesses benefited from but unwisely invested to stock buybacks in support of executive compensation. https://www.reuters.com/article/us-health-coronavirus-aviation/u-s-aviation-unions-ask-congress-for-another-32-billion-bailout-idUSKBN23W3IZ
    Like (40)
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    They shouldn’t be selling full flights. They shouldn’t be any traveling by plane without social distancing. I’ve flown a lot since 1973 and am appalled at the way people are treated today in airlines. The feeling I get when flying in America is the same I got when I had to ride a public bus in Guatemala - jammed together, sharing the bus with poultry & livestock while being stuffed in it like sardines. Social Distancing will never happen. So any flights canceled MUST BE REFUNDED
    Like (37)
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    Good business and common sense.
    Like (29)
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    The fact this is even a question is ridiculous. Where will America’s Big Business Greed End?
    Like (28)
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    Why is this a question? Every other service dose. Airlines are a service industry like any other.
    Like (26)
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    Number one....I don't know why anyone would want to fly at this particular time in history.......being enclosed for hours in a capsule of recirculated air seems like a death wish. Number two....even before the days of Covid, there were regulations in place that you did NOT receive a refund if you canceled your flight after so many days, was there not? Why would this change.... we as a population have been OK with these restrictions in the past, when the airlines were thriving....again, why should it change?
    Like (23)
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    Refunds for cancelled flights should be the norm & would encourage sick people to back out without financial repercussions. Because the flights are not full, airlines should keep a wait list to bump people onto the flight once someone cancels. A win for everyone!
    Like (21)
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    The airlines received billions in tax payer bailouts, so yes they should be required to use some of those billions to provide refunds to the people,
    Like (21)
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    If I purchase a product and for any reason the company cannot deliver the product, then I am entitled to a refund using the same method of payment I used for the purchase. It’s highly unlikely I used cash during the pandemic but a credit card refund is perfectly reasonable. I do not see why I should be forced to accept future travel as I am immunocompromised and do not normally travel. It’s fine to offer but I should be able to refuse.
    Like (19)
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    We need to do everything we can to dismantle airline monopolies. If this punches them in the gut then yippie
    Like (17)
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    From my POV the pandemic falls under the category of “force majeur”, similar to a hurricane or an earthquake which, while predictable to some degree, operate completely outside our ability to affect them in any way. Every one of us, including our corporate and government institutions, is completely unable to directly affect the occurrence of the virus. Our only influence is over how we respond to it. While I am a severe critic of much about corporations and the corporate oligarchy, the role of airlines and other businesses in maintaining some semblance of our economy and way of life can’t be minimized or disregarded. If we want to return to some similar, though likely severely changed, way of doing things in our country when the pandemic is over, we must bend where we can to ensure some of those contributors to our national economic engine survive intact, if possible.
    Like (14)
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    Absolutely. Why should they keep the money? If flights are cancelled on airlines’ decision then they need to refund the money to their customer.
    Like (12)
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    The airlines got “bailed out” they should definitely refund $ to people who were unable to fly due to COVID-19
    Like (11)
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    They paid cash they should get cash when the flight is cancelled from no fault of theirs.
    Like (11)
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    Other businesses that don't deliver the product ordered must return the fee. Why should airlines be any different.
    Like (11)
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    Not all of us fly on a regular basis. To penalize those of us who don’t and have flights canceled through no fault of our own is theft when our costs are not reimbursed and we are unable to use what the airlines consider compensation. I’ve been there before, which is part of why I don’t fly unless absolutely necessary.
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    Of course they should refund passengers.
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