Senators Unveil Bill to Force Airlines to Provide Cash Back for Pandemic-Driven Flight Cancellations

Five Senate Democrats announced their intent Wednesday to introduce legislation that would mandate both airlines and third-party ticket sellers to fork out full cash refunds for all airline tickets cancelled during the ongoing global public health crisis. 

The soon-to-be-released Cash Refunds for Coronavirus Cancellations Act would require airlines to provide cash reimbursements as an option outside of vouchers to pay back  pandemic-induced travel cancellations—regardless of whether the airline or passenger cancelled—according to Sens. Ed, Markey, D-Mass., Elizabeth Warren, D-Mass., Richard Blumenthal, D-Conn., Chris Murphy, D-Conn., and Kamala Harris, D-Calif., who are all behind it. 

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

The administration began encouraging Americans to avoid discretionary travel and help slow the spread of COVID-19 in March. Airlines' revenue streams were significantly disrupted since the onset of the pandemic and, to help mitigate the strains, the industry as-a-whole received $25 billion in coronavirus aid through Congress’ $2 trillion stimulus bill. Reflecting on the multibillion-dollar bailout, Markey this week said, “It’s absolutely unconscionable that the airlines won’t give consumers their money back.”

Existing federal laws direct airlines to provide full refunds if their own companies cancel flights, but when travelers cancel on their own, most only receive their payments back in the form of vouchers or travel credits that can solely be used for future travel. The new bill would change that—and force major airlines and third-party ticket sellers to offer reimbursements regardless of who made the cancellation. Under the to-be-proposed bill, those entities are also still able to offer vouchers as an alternative to the mandatory cash refunds—but the vouchers would need to remain valid indefinitely. According to the release, the legislation would also enable airlines to use emergency funds provided by Congress, except for grants from the stimulus CARES Act that are designated for workforce payroll and employee benefits. 

The bill defines the "COVID-19 emergency period" for which flights must be refunded for cancellations as the time beginning March 1 and lasting 180 days beyond the nationwide COVID-19 emergency declarations. The senators said they hope this will “give consumers six extra months of flexibility and peace of mind so they don’t have to travel until they truly feel safe flying again.” 

And if the legislation is eventually passed, it would also firm up the cash reimbursements to be retroactive to on or after that March 1 date—”so that passengers who previously received a travel voucher, but have not used it, can ask for a cash refund now,” the senators said.

The to-be-released bill follows a joint statement Markey and Blumenthal issued Tuesday, which was motivated by a Transportation Department enforcement notice and emphasized that airlines must provide cash refunds for the cancellations they’re responsible for. It also comes after a comprehensive investigation and subsequent letter the senators sent to 11 major domestic airlines in April, which together indicate the flight-focused companies could be sitting on at least $10 billion in customers’ cash (in the form of travel credits) for trips that didn’t happen due to the pandemic. In response, several top airline officials reiterated that the pandemic is depleting their funds.  

Still Murphy emphasized that “rebooking is impractical for many consumers, especially given the uncertain nature of the future course of the pandemic.” 

Officials from several consumer groups voiced their support of the forthcoming bill in the senators’ announcement. The National Consumers League’s Vice President of Public Policy, Telecommunications, and Fraud John Breyault, for example, applauded what he deemed to be a “common-sense consumer protection bill, which will ensure that consumers get the refunds they deserve without having to jump through the airlines' hoops.”