Source: US State of California
Although the airline industry received nearly $60 billion from the CARES Act, many will not refund consumers for flight cancellations due to COVID-19
SACRAMENTO – California Attorney General Xavier Becerra, as part of a bipartisan coalition of 40 attorneys general, urged Congress to establish new protections that would allow airline customers to quickly obtain a full refund for voluntarily cancelling their flight due to COVID-19. The protection should be a condition on any further federal financial relief for the airline industry. In the letter, the coalition highlights that the American airline industry and cargo air carriers received nearly $60 billion from the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and argues that any future economic stimulus package should include provisions that protect consumers, tax dollars, and public health.
“Any further COVID-19 bailout for the airline industry will be paid for by taxpayers, again. Those taxpayers are airline customers and they, too, deserve protection when COVID-19 disrupts their air travel plans,” said Attorney General Becerra. “Airlines that take taxpayer-funded relief should be required to provide timely refunds to customers who must cancel their flight reservations due to COVID-19. And state attorneys general who are on the front lines of consumer protection should have the authority to enforce this critical consumer protection.”
The coalition urges Congress to require airlines that accept future federal relief funds to provide full refunds, without delay, to consumers who voluntarily cancel their flight reservations for reasons related to COVID-19, and to strengthen existing laws to require that refunds for flight cancellations be timely and usable by consumers. The coalition also urges Congress to authorize state attorneys general to enforce federal airline consumer protections and asks the U.S. Department of Transportation to make its consumer complaint process more transparent and easy for consumers to navigate.
Placing contingencies on emergency relief funding has precedent. In the letter, the coalition praised Congress for prohibiting airline companies that accepted CARES Act funding from imposing worker furloughs through September 30, 2020. Airlines were also prohibited from stock buy backs within a set time until after federal loans were paid off, and were prohibited from issuing shareholder dividends while relying on federal relief. These conditions were imposed to ensure the industry would stay afloat, protect taxpayer funds, and prevent hundreds of thousands of employee furloughs and layoffs. Any new relief package should also work to protect public health and consumer pocketbooks.
Attorney General Becerra is committed to protecting Californians and people across the country during the COVID-19 public health emergency. In August, he sent a letter to 33 mortgage servicers reminding the companies of their obligations to California homeowners and tenants under the Homeowner Bill of Rights during COVID-19. In July, he urged the U.S. Senate to provide at least $50 billion in financial support for childcare as part of the next coronavirus relief package. In June, Attorney General Becerra filed charges against a Los Angeles County pharmacist for price gouging on N95 masks. And in May, he supported an amicus brief to ensure airline workers could access paid sick leave amid the pandemic.
In issuing the letter, California joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.
A copy of the letter to Congress can be found here.