U.S. Investigating Airlines Over Slow Refunds During Pandemic

The Transportation Department has investigated 20 airlines over failures to issue prompt refunds.

The Transportation Department is detailing efforts it is making to help airline customers who were wrongfully denied refunds after flights were cancelled or changed during the pandemic.

The department says in a new report that it has investigated 20 airlines over failures to issue prompt refunds to customers, and 18 of those probes are still ongoing. 

The department disclosed that an examination into United Airlines was dropped in January after the airline took steps resulting in "thousands" of customers getting refunds. 

In June, the department announced that it was seeking a $25.5 million fine against Air Canada, saying the airline improperly delayed refunds for more than 5,000 passengers by up to 13 months. The airline is fighting the penalty.

The Transportation Department did not identify the other 18 airlines still under investigation in Thursday's report to the White House, but a footnote identified 10 U.S. carriers and 15 foreign ones — a who's who of the industry — that it contacted about the matter last year. 

"Air Canada is far from being the only carrier that violated DOT refund rules," Bill McGee, an aviation expert at Consumer Reports, said Friday. McGee said both Consumer Reports and the Transportation Department received "tremendously high numbers of complaints" against United and Frontier Airlines.

The department says it received about 30,000 complaints over airline refunds. The agency says at least nine airlines changed their policies to clarify that passengers are entitled to refunds, not just travel vouchers, when the airline cancels their flight or significantly changes the flight's schedule.

Consumer groups and lawmakers have been raising the issue of refunds that were slow or never came since March 2020, when U.S. air travel nosedived and airlines canceled thousands of flights on short notice. Elaine Chao, who was Transportation secretary under President Donald Trump, issued a reminder to airlines of their obligation to offer refunds when they — and not the customer — cancel a trip, but refrained from stronger action against airlines.

On Friday, consumer groups praised current Transportation Secretary Pete Buttigieg for expanding the agency's staff for handling complaints and proposing to expand refunds to times when government lockdowns cause flight cancellations. But they said more needs to be done to help consumers who are still waiting for refunds from 2020 and those who received travel vouchers that will expire.