The U.S. Airlines have USD $10 billion sitting right in their hands

The U.S. airlines, which should have made cashback on the flight vouchers that got canceled due to the pandemic, are just sitting tight with the cash right in their hands, a staggering USD$10 billion says a board of senators!

According to the board of senators comprising of Senators Richard Blumenthal, Elizabeth Warren, and Ed Markey, only when the airlines’ company itself cancels a scheduled flight, it offers a cash refund as mandated by the U.S. Transportation Department but only the airlines Allegiant and Spirit have offered to refund the trips which the customers themselves have voluntarily canceled.

The fact differs from the ongoing situation:

It has been mandated under the federal law that the passengers are entitled to full refunds once a flight gets canceled, and now that many airlines are canceling 60% to 80% of their scheduled flights, it’s essential that those airlines refund the money, said the board.

“However, many airlines have been obfuscating this right by offering travel vouchers as the default option, requiring passengers to take burdensome steps to claim refunds instead,” said the board in a recent statement. They further added that “Assuming a similar trend throughout the industry in over the past month, this figure could mean that the airlines are sitting on more than USD 10 billion in customer cash”.

The Democratic board of Senators has asked the following airlines to provide with the details of their refund records so far during this pandemic:

Alaska Airlines (ALK.N)
Delta Airlines (DAL.N)
Hawaiian Airlines (HA. O)
Allegiant Air
Frontier Airlines
American Airlines (AAL.O)
JetBlue Airlines (JBLU.O)
Sun Country Airlines
Southwest Airlines (LUV.N)
United Airlines (UAL.O)

And the feedback given is not complete as the airlines haven’t shared the total value of the travel vouchers they have issued during the pandemic but claimed that their policies are well within the DOT guidelines and so far, only JetBlue which is said to have 5.5% of the domestic share market noted that it had issued over $20 million per day of travel credits in the first few weeks of March, to the customers. The board also stated that “None of the big carriers with the most revenue, including United, American, Delta, and Southwest offer similar refunds.

Among replies by large carriers, Delta Airlines stated that it has issued over a million refunds that amounted to up to $500 million in cash in the month March itself as the passengers requested for a cash refund. On the other hand, a Minnesota based ultra-low-cost carrier said that by doing so outside the DOT guidelines would put the company’s path into risk. And yet again, American airlines too reported that most of its customers are opting for a travel voucher as supposed to a total refund.

The typical case here is that when passengers do not demand a refund, they are issued with a travel voucher, which is valid for up to two years, but in some cases, they expire within the following year itself, which points to a scam.

The Transportation department so far has only issued a notice to all the airlines as to refund all the cash entitled to the passenger if the flights are canceled/delayed on the company’s behalf, which the passengers may not opt to accept but not issue travel vouchers as the default option.

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Nishith Ramachandra
Nishith Ramachandra
Nishith is not famous, nor has he even looked at the stairs of fame at a large scale. He’s a normal CS engineering student but with some strange curiosity and a penchant for good articles. He actively cooks some wonderful dishes while stating that his inspiration to cook is the famous cook, Gordon Ramsey. He discovered his ability to fluently use words since he was in 7th grade and since then, he’s constantly kept at it. While writing is more of a mainstream pastime to him (other than engineering of course), he has a passion towards instrumental music as well, ranging from the tabla to the bass guitar. He’s quiet renowned within his educational sphere as being a person with a flair to churn out quiet good poems and paragraphs and that too on demand! He writes not so as to address a mass gathering (his orating skills take care of that aspect) but to address the individual reading the article, that’s something that the reader himself testifies to. His plans towards his future albeit are more aligned towards the business and management side, his skill as a writer are gonna leave some mark in its aspect to the world, or so he says.

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