Flight refund no sure thing amid crisis

As it stands, decision often hinges on whether airline or customer cancels first

WASHINGTON — As covid-19 cases began exploding last month, Quinton Martins thought he was doing the prudent thing by canceling a flight to Mexico for a planned vacation with his wife and daughter.

But the California man didn’t realize that by doing so he gave up the right to a refund from Alaska Air Group Inc. — even though taking the trip next week would require his family to violate their state’s stay-athome order and a federal recommendation to avoid foreign travel.

While the U.S. Department of Transportation sternly admonished airlines to refund fares for canceled flights, people such as the Martins, whose flight next week hasn’t been scrapped, aren’t covered. Even the state order that came a few days later doesn’t matter. Most who cancel trips must accept vouchers for future travel.

“They’re happy to take your money, but they’re not happy to help out when things don’t go as they should,” said Martins, who lives in Sonoma County north of San Francisco. “It’s pretty frustrating.”

Complaints from disgruntled passengers are one more thing airlines must contend with as losses mount, their stock values plunge and the government finalizes an aid package of loans and payroll guarantees worth $50 billion.

Alaska Air is following all U.S. regulations and honoring its contracts with passengers, said spokesman Ray Lane. The airline has taken actions to lessen the hardship on customers, such as suspending fees for changes and cancellations, he added.

A trade association of global carriers, the International Air Transport Association, says the embattled airlines might not be able to afford the refunds they’re obligated to pay — which could total $35 billion — let alone what they’d have to pay if people such as Martins also got reimbursed. Nevertheless, nine Democratic senators are urging them to provide them to passengers who had to forgo trips because of the virus.

“Unfortunately, these travel vouchers do the public little good in this time of emergency, when Americans need money now to pay for basic necessities,” the senators, led by Ed Markey and Elizabeth Warren of Massachusetts and Richard Blumenthal of Connecticut, said in a news release.

Under laws governing passengers and their rights as consumers, who cancels first can have huge repercussions.

If an airline cancels or significantly delays a flight through its own actions — for example, if it doesn’t make sense to operate the route any more while travel plummets during the pandemic — then U.S. law requires the carrier to refund the cost of the ticket and any fees, according to the Transportation Department.

Yet when a passenger opts not to take a flight that is still scheduled, then separate rules apply and airlines don’t have any refund obligation. Orders to shelter in place don’t apply.

In many cases, airlines have waived some of their normal fees, such as charging for cancellations or changes to a ticket. But they have been unwilling to refund people’s money as their cash flow slows to a trickle, say customers and advocates.

Most if not all carriers don’t spend time explaining the nuances to customers, and few passengers know to ask. As a result, a knowledgeable flyer might hold off canceling a ticket to see if the airline cuts the flight first, which would require a full refund, said Charles Leocha, president of the advocacy group Travelers United.

“Unfortunately, people who don’t know what they’re doing get screwed,” Leocha said. “They lose a lot of money.”

Even if an airline later cancels the flight, a passenger who acted first isn’t entitled to a refund.

Airlines for America, a trade group representing large carriers, said members are working closely with the government to contain the virus and maintain safety during a time in which more than 90% of people are subject to some kind of stay-athome order.

“Since the early stages of the crisis, carriers have worked to increase communications with customers, as well as introducing travel policies to accommodate passengers during this health crisis,” the group said.