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DOT Again Warns Airlines To Issue Refunds For Canceled Flights

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The U.S. Department of Transportation has issued a second warning to airlines to issue refunds to passengers for canceled flights during the coronavirus pandemic after the agency saw a surge in complaints related to refunds. The DOT had sent the first warning to airlines regarding ticket refunds in April.

The DOT said it issued a second Enforcement Notice regarding airline ticket refunds after more than 25,000 air travel service complaints and inquiries were filed by customers in March and April 2020. This compares to about 1,500 air travel service complaints and inquiries the department receives in a typical month.

The agency noted that most of the complaints it received in April and May were related to ticket refunds.

"The Department is asking all airlines to revisit their customer service policies and ensure they are as flexible and considerate as possible to the needs of passengers who face financial hardship during this time," said U.S. Secretary of Transportation Elaine Chao.

However, airlines are reluctant to issue refunds during the coronavirus pandemic.

Several airlines have cut flight schedules and fares in the past few months as the rapid spread of the coronavirus across the world sharply reduced demand for air travel. The weak demand for air travel is the worst since the last financial crisis.

According to the DOT, airlines have an obligation to provide a refund to a ticketed passenger when the carrier cancels or significantly changes the passenger's flight, and the passenger chooses not to accept an alternative offered by the carrier.

However, neither the term "significant change" nor "cancellation" is defined in regulation or statute by the DOT. Accordingly, airlines define these terms differently when fulfilling their obligation to provide refunds.

Most airlines offer consumers alternatives to a refund, such as credits or vouchers, in order to retain revenue.

Airlines in the U.S. are required to process refund issues within seven business days if a passenger has paid for the tickets by credit card, and within twenty days if he paid by cash or check.

The U.S. airline industry has received a $50 billion bailout from the $2 trillion coronavirus economic stimulus bill signed by President Donald Trump in March. It includes $25 billion in direct aid to passenger airlines.

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