Politics

Pete Buttigieg forces airlines to pay $600M in refunds to customers after “unprecedented” complaints

Secretary Pete Buttigieg
Secretary Pete ButtigiegPhoto: Shutterstock

An unprecedented number of travelers have complained about airlines refusing to refund their canceled trips. So out Transportation Secretary Pete Buttigieg is taking the unprecedented step.

Buttigieg’s Department of Transportation (DOT) is requiring six airlines to pay $600 million in refunds to “hundreds of thousands of customers who had been denied them,” NPR reported.

Additionally, the DOT is assessing $7.5 million in fines against the six airlines. Interestingly, only one of the airlines is based in the U.S. — Frontier Airlines. The five others, which follow, are foreign: Air India, TAP Portugal, El Al Israel, Aeromexico, and Avianca (a Colombian airline).

Bureau of Transportation statistics show that customer complaints about airlines’ refusal to pay refunds increased from 1,500 in 2019 to 89,000 in 2020. In 2020, the COVID-19 travel restrictions caused customers to cancel flights, but airlines often would only cancel flights at the last minute.

In those cases, airlines weren’t required to issue refunds and instead offered vouchers or credit for future travel. Often, these vouchers and credits can expire or go unused, leaving customers without due compensation for their canceled flights.

“It’s really unprecedented,” Bill McGee, an aviation consumer advocate with the American Economic Liberties Project, said. “We’ve never seen anything like it.”

In 2022, cancellations increased as airlines scheduled more flights than they had staff to cover.

“A flight cancellation is frustrating enough and you shouldn’t also have to haggle or wait months to get your refund,” Buttigieg said. “DOT will be here to make sure that a refund is available and that it’s processed as promptly as possible.”

Most of the aforementioned airlines told Reuters that they had trouble quickly refunding customers because of staff shortages and overwhelming customer requests during the COVID-19 pandemic.

McGee said that Buttigieg’s actions are basically too little, too late.

“This latest round of enforcement from the [DOT] comes almost three years too late and leaves out the most egregious U.S. offenders,” McGee said, noting that major U.S. carriers weren’t targeted by the DOT.

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