Airlines would give cash refunds for coronavirus cancellations under bill

Coronavirus Cancellations Act targets airline credit policies

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A group of U.S. senators has proposed a new law that would require airlines to give cash refunds instead of credits for passengers whose travel plans are canceled as a result of the coronavirus.

Currently, an airline is only required to give a cash refund if it cancels the flight. For passengers who call off their own travel plans because of the pandemic, most airlines are offering only credit toward a future flight – a voucher that may not be valid for long enough to be used, according to Sen. Richard Blumenthal, one of the bill's co-sponsors.

“In fact, what they’ve been doing is confusing and misleading those passengers into thinking that all they are entitled to receive are the vouchers or credits of very limited duration,” he told FOX Business’s Melissa Francis on After the Bell Wednesday.

U.S. Democratic Senator from Connecticut Richard Blumenthal (REUTERS/Andrew Gombert/Pool)

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People who call off their travel plans during the pandemic are doing a “public service,” Blumenthal said. The bill would make airlines offer them cash refunds if the travelers choose. Although vouchers would still be an option for any passengers who prefer them.

“When passengers feel they can’t safely fly for public health reasons, they should also receive cash back,” he said. “They need that cash, they have to pay their own bills.”

Many travel industry businesses have taken steep losses because of the pandemic. The U.S. airline industry is receiving a $25 billion relief package from the Treasury Department.

A traveler wears a face mask as he goes to the boarding gates at Sacramento International Airport in Sacramento, Calif., Monday, May 11, 2020. (AP Photo/Rich Pedroncelli)

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“And in effect, [airlines] have been screwing – forgive me – the same taxpayers who have given them billions of dollars in payouts,” Blumenthal said.

As written, the bill, “Cash Refunds for Coronavirus Cancellations Act of 2020,” would cover all flights from March 1 and last until 180 days after the end of the public health emergency.

The Department of Transportation would be responsible for enforcing the law, Blumenthal said.

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