(Washington, DC) — A Senate investigation is revealing that U.S. domestic airlines are sitting on an estimated $10-billion in “customer cash” due to cancellations as a result of the coronavirus pandemic.
Airlines are required by law to issue cash refunds to travelers for flights the company cancels but they are under no obligation to offer cash if a customer cancels the flight by themselves.
A group of Democratic senators are urging airlines to issue cash refunds to Americans who are struggling financially.
Sens. Ed Markey (D-Mass), Elizabeth Warren (D-Mass.), Kamala Harris (D-Calif.) and Richard Blumenthal (D-Conn.) argued in a statement on Friday that the the pot of money collected by the airlines should be used to issue cash refunds for Americans who are struggling financially.
“The ongoing pandemic is placing enormous financial strain on millions of Americans,” the senators said in a joint statement. “In light of this pressing need, and the unprecedented multi-billion-dollar bailout that the airline industry just received from Congress, we are absolutely outraged that so few airlines are willing to offer real cash refunds to consumers who must cancel their tickets.”
Portions of the $25 billion aid package for airlines are to be used for payroll grants for employees and low-interest loans. The aid is negotiated on an individual basis between the Treasury Department and U.S. airlines.
Flight trips have dropped off sharply as Americans comply with stay-at-home orders across the country in an effort to limit the spread of coronavirus.
While no domestic travel ban is in place, President Trump on March 16 urged Americans to avoid discretionary travel.
The senators said they came to the $10 billion estimate in customer cash based on data provided by JetBlue, which was the only airline to provide the dollar amount of travel credits related to coronavirus cancellations.
“Although most companies refused to say just how much money they are sitting on in the form of travel vouchers, we estimate that the airlines could be holding onto more than $10 billion of hard-earned money from American travelers,” the senators continued.
“If these companies released that money back to the public, it would provide a significant stimulus for struggling families. That’s why we once again urge the airlines to end their anti-consumer policies and offer real refunds during this emergency.”
The airlines singled out by the senators include American Airlines, Alaska Airlines, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Sun Country Airlines and United Airlines.
The senators said they welcome airlines to dispute the $10 billion figure.
Instead of cash refunds, most of these carriers said they have responded to coronavirus-related trip modifications by waiving fees associated with itinerary changes and cancellations and extended up until at least 2021 the time customers can use travel vouchers.