Government warns airlines on refunds, allows 5% of flights to halt

Airline trade group says refunding all tickets for canceled COVID-19 flights would mean bankruptcies

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The Department of Transportation warned airlines against "unfair or deceptive" refund policies after receiving a record number of complaints from customers during the coronavirus pandemic.

DOT also announced airlines receiving government aid under the Coronavirus Aid, Recovery and Economic Security (CARES) Act will be allowed to stop up to 5 percent of scheduled flights.

Passengers screened by the Transportation Security Administration has rebounded from April lows, but are still down around 90 percent.

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The department said it received 25,000 air travel service complaints and inquiries in March and April, far above the 1,500 complaints and inquiries it gets in a typical month.

Provided by Vince Warburton, passengers get off an American Airlines flight after they landed at Los Angeles International Airport in Los Angeles. (Vince Warburton via AP)

"The Department has received an unprecedented volume of complaints from passengers and is examining this issue closely to ensure that airlines’ policies and practices conform to DOT’s refund rules," Transportation Department Secretary Elaine Chao said Tuesday. "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."

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Airlines and ticket agents must comply with aviation consumer protection requirements and refund customers for canceled flights under the Department's April 7 Enforcement Order 2020-4-2," according to the department.

TickerSecurityLastChangeChange %
DALDELTA AIR LINES INC.31.10+0.52+1.70%
UALUNITED AIRLINES HLDG.35.18+0.43+1.24%
AALAMERICAN AIRLINES GROUP INC.12.58+0.29+2.36%
LUVSOUTHWEST AIRLINES CO.37.93+0.43+1.15%

U.S. airlines are spending more than $10 billion per month during COVID-19, even though most flights are averaging only a dozen customers and 50 percent of the active U.S. fleet has been grounded, industry trade group Airlines for America told Reuters.

The group also said that refunding all passenger tickets, not only for canceled flights but for nonrefundable tickets and flights canceled by passengers instead of airlines, "will result in negative cash balances that will lead to bankruptcy."

TSA agents wear masks as they screen passengers at Seattle-Tacoma International Airport April 15, 2020, in SeaTac, Wash. (AP Photo/Elaine Thompson)

The U.S. Treasury has given airlines $25 billion in cash grants to keep workers employed during the outbreak.

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Since the start of the pandemic, U.S. airlines have been working on ways to ensure their passengers' safety and peace of mind while traveling. Last week, a number of major carriers included Frontier Airlines, JetBlue, Spirit and Southwest rolled out new safety measures such as required masks for passengers and staff for that reason. AmericanDelta, JetBlue, United and have all previously announced that passengers have to wear face covers on flights.

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