Airline cancel your flight due to coronavirus crisis? You're still due a refund, DOT says

The U.S. Department of Transportation on Friday warned airlines that they must issue prompt refunds to passengers whose flights are canceled or changed significantly by the airline during the coronavirus crisis.

The enforcement notice, which applies to U.S. and foreign airlines serving the U.S., follows a spike in complaints from travelers being denied refunds and told they were only eligible for travel vouchers or credits. 

The refund requirement, which does not cover travelers who voluntarily cancel their flights, is a longstanding DOT policy. But carriers including United Airlines have changed their policies since the coronavirus outbreak began in hopes of preserving badly needed cash as trip cancellations have soared and new bookings have disappeared.

On the hot seat: United Airlines blasted for refund policy

"Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines’ obligation to refund passengers for cancelled or significantly delayed flights remains unchanged,'' the DOT said in its enforcement notice.

The DOT notes that airlines complied with the policy during 9/11, Hurricane Katrina and other natural disasters. Airline executives have repeatedly said the financial damage from the coronavirus crisis is already worse than the travel fallout following 9/11.

The DOT is giving airlines that haven't been following the refund policies time to change their policies before it takes any enforcement action.

It said airlines that have been denying refunds must:

1) Contact, in a timely manner, passengers provided vouchers for flights that the carrier canceled or significantly delayed to notify those passengers that they have the option of a refund. 

2) Update their refund policies and contract of carriage provisions to "make it clear that it provides refunds to passengers if the carrier cancels a flight or makes a significant schedule change.''

3) Review the refund requirements with airline employees, including reservationists, ticket counter agents, refund personnel and other customer service professionals.

"The Aviation Enforcement Office will monitor airline policies and practices and take action as necessary,'' the enforcement notice says.

Pro tip: Don't rush to cancel that flight during coronavirus crisis. Here's why.

Brett Snyder, who runs the Cranky Concierge travel service and recently launched Refund Hunter to help travelers sort through the confusing flight change and cancellation options during the crisis for a fee, said United faces among the biggest changes.

The airline has been denying refunds for domestic flights it cancels unless the flight the airline rebooks you on delays your departure or arrival by more than six hours. If it doesn't, and you don't want to travel, you'll receive a travel credit for the value of the ticket.

The policy is even more strict for canceled international flights: the airline has only been issuing travel credit, telling passengers they can request a refund if they don't use it within a year.

"The use of the word prompt (refund) means United needs to get its act together,'' Snyder said. "Because United is playing games.''

United spokeswoman Leslie Scott said the airline is reviewing the DOT's order. The airline previously told USA TODAY it ran its coronavirus policies by the DOT.

Snyder said the only thing unclear about the DOT"s enforcement notice is that it doesn't define "signficantly delayed.'' In addition to United, JetBlue has been criticized for its policies.

"There is a still a Texas-size loophole here,'' he said.