I was already aware that many customers have had issues trying to get refunds from the airlines on flights they had booked before the coronavirus shut everything down. But I had no idea the extent of the problem was so vast. This report from NextGov indicates that there are currently enough of these cancellations that ten billion dollars worth of refunds are in limbo. The airlines want to give people travel vouchers instead of money, basically saying that once they have your money, they’re going to keep it. Whether you fly or not is up to you.
Of course, these are the same airlines that are currently pushing their snouts deep into the government trough for bailout money that adds up to more than all of those refunds combined. We got almost nothing from the airlines in exchange for this taxpayer largesse. It’s time to pony up.
Four Senate Democrats on Friday revealed that major domestic airlines are holding on to roughly $10 billion in customers’ cash following dramatic spikes in flight cancellations caused by the COVID-19 pandemic.
In a joint statement outlining the results of their recent investigation into the matter, Sens. Ed Markey, D-Mass., Elizabeth Warren, D-Mass., Richard Blumenthal, D-Conn., and Kamala Harris, D-Calif., also pressed the companies to release customers’ money via full cash refunds—not solely as travel vouchers—to all who cancel flights during the worldwide public health emergency.
“The ongoing pandemic is placing enormous financial strain on millions of Americans,” the senators wrote. “If these companies released that money back to the public, it would provide a significant stimulus for struggling families.”
We should note up front that this doesn’t apply to all of the airlines. There are two of them (Allegiant and Spirit) that are offering cash refunds. Good for them. But they are two of the smallest and account for only a slim fraction of total air travel.
Moving on, I will admit that it’s a rare day indeed when I get the chance to heap some praise on Ed Markey, Elizabeth Warren, Richard Blumenthal or Kamala Harris, so I will take this opportunity to do so. I’m glad that they are “expressing their outrage” over the situation and bringing the details to the public’s attention.
Unfortunately, expressions of outrage are not enough. If we’ve learned anything about the management of these airlines over the years, it’s that they are completely incapable of shame. They continue to make air travel more and more intolerable for their customers, packing them in like sardines and decreasing services while continuing to raise prices. And when they were making record profits, rather than improving service quality, they were flushing all of that cash into buying their own stock back.
If that’s how they choose to run their business as part of a capitalist system, so be it. But they received $25B in bailouts from the first aid package and now they’re back asking for more. That means there is leverage available if Congress has the collective cojones to employ it.
Simply expressing outrage and sending letters isn’t getting us anywhere. It would take little effort to draft legislation modifying current and future aid packages to include a provision stating that any airlines holding on to refund money from taxpayers and only offering travel vouchers in return will be ineligible for another dime of federal assistance, either through grants, assured loans or anything else. Return all of the passenger’s money in cash or no bailout for you.