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Senators Urge U.S. Airlines to Issue Refunds After Being Given $25 Billion Bailout

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Nine Democratic U.S. senators on Tuesday urged the chief executives of 11 major airlines to issue full cash refunds to customers canceling flights during the coronavirus pandemic after Congress approved $25 billion in cash grants for the hard-hit industry.

“We believe your company has a moral responsibility to provide real refunds, not travel vouchers, to consumers, and to support State Department efforts to repatriate any American citizens trying to come home,” Senators Ed Markey, Elizabeth Warren, Kamala Harris, Bernie Sanders, Amy Klobuchar, Richard Blumenthal, Chris Murphy, Sheldon Whitehouse and Bob Casey said in the letter.

American airlines

Most U.S. airlines are temporarily waiving coronavirus-related change and cancellation fees but are not issuing cash refunds.

“Americans need money now to pay for basic necessities, not temporary credits towards future travel,” the senators wrote.

Economic stimulus legislation passed by Congress last week included the cash grants to the passenger airlines.

American Airlines said in response to the letter that its “comprehensive travel waivers we’ve put in place are designed to meet the full range of our customers’ needs.”

UNited Airlines plane

A group representing major airlines has warned about the impact of a potential 30-day domestic flight ban because that would require them to repay consumers for all tickets purchased within seven days if the service cannot be provided even for non-refundable tickets. That could boost liquidity losses by $7 billion to $10 billion and make it harder to obtain credit, the group added. No such flight ban has been imposed.

The U.S. State Department last week said it was tracking 50,000 Americans abroad who might seek help to return to the United States during the health crisis and was helping to arrange dozens of flights to assist people in returning.

American AIrlines

U.S. airlines are collectively cancelling hundreds of thousands of flights. Southwest said on Tuesday it will cut more than 40% of flights from May 3 through June 5 amid a sharp decline in travel demand from the pandemic.

Other U.S. carriers have said they are cutting 60% or more of their flights, including American, United, Delta and Alaska Airlines.

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