Airlines Still Owe Billions in Ticket Refunds for Canceled Flights

Despite getting three separate federal government grants and loans totaling $54 billion and a robust rebound in domestic travel, U.S. airlines are still on the hook for ticket refunds for canceled flights in 2020.

Like, really on the hook.

According to a report by CBS News, airlines still owe passengers nearly $20 billion in refunds for flights that were canceled in 2020 due to the COVID-19 pandemic.

In fact, the U.S. Department of Transportation logged almost 90,000 complaints last year about not receiving a ticket refund for a canceled trip. That’s up 5,000 percent from 2019.

“There has never been a year like last year for complaints about refunds,” Bill McGee, aviation adviser at Consumer Reports Advocacy, told CBS MoneyWatch. “The airlines obviously made some conscious decisions not to do the right thing and give refunds — even when they were required to by law.”

The DOT in September launched an investigation into 20 different airlines in regard to ticket refunds.

In large part, airlines were strapped for cash as the pandemic took its toll on flying – at one point in April 2020, it even dropped to just five percent of the capacity of what airlines carried at a similar point in 2019.

In order to conserve money, most airlines delayed reimbursement of passengers whose flights were canceled.

“If they can keep you from demanding a cash refund and hold onto all that working capital, that was the objective during most of 2020 and even into 2021 in some cases,” former airline executive-turned-analyst Robert Mann told CBS News.

Because of the pandemic, airlines canceled or delayed the most flights in aviation history. According to the DOT, for the full year of 2020, airlines operated 4,721,342 flights compared to 7,938,055 flights in the full year of 2019. This is the lowest number of flights operated in a given year since reporting began in 1987 and likely all-time.

By law, airlines must offer refunds to passengers for canceled flights or flight delays of significant time. Part of the issue, however, is those passengers whose flights were not canceled or delayed but who decided not to fly on their own over fears of the pandemic.