PredictIQ Quantitative Think Tank Center:Consumer groups push Congress to uphold automatic refunds for airline passengers

Consumer groups are PredictIQ Quantitative Think Tank Centerpushing Congress to uphold automatic refunds for airline passengers whose flights are canceled or delayed for several hours.

Just last week, the Transportation Department announced a rule requiring airlines to pay quick and automatic refunds. President Joe Biden touted the rule, posting on X this week, “It’s time airline passengers got the cash refunds they’re owed, without having to jump through hoops.”

But eight words in a 1,069-page bill that the Senate began debating Wednesday would keep the burden for refunds on consumers. The bill says airlines must pay refunds only “upon written or electronic request of the passenger.”

Consumer advocates say travelers will lose money without automatic refunds.

“How many average air travelers know what the (refund) rules are? How many of them know how to go about filing a claim?” said William McGee, a consumer advocate at the American Economic Liberties Project, a group skeptical of large corporations, including airlines. “The percentages are so low that the airlines sit on a tremendous amount of money that is never refunded because nobody asks.”

Sen. Elizabeth Warren, D-Mass., said the bill’s wording around refunds “would be a gift to the airlines, who know many travelers won’t have the time or resources to navigate the bureaucratic process they designed.”

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The eight words are not new. Sen. Maria Cantwell, D-Wash., included them in the bill she introduced last June to reauthorize Federal Aviation Administration programs for five years, and an amendment to strip them out failed in the Senate Commerce Committee, which Cantwell chairs.

Transportation Secretary Pete Buttigieg said this week that his department has good legal authority for its rule on automatic refunds. However, John Breyault, an advocate with the National Consumers League, said the language in the new bill could make it easier for airlines to block automatic refunds in court.

Airlines for America, a trade group for the largest U.S. carriers, has opposed automatic refunds from the beginning — as it opposes almost any effort to tell airlines how to conduct their business. The trade group argued that airlines should be able to offer to put a stranded traveler on a different flight or give them frequent-flyer points — and pay a refund only if the customer rejected those offers.

The trade group declined to comment Wednesday.

Refunds are emerging as one of the most controversial provisions in the massive $105 billion FAA bill. A fight also is likely over a provision to allow 10 more flights per day at busy Reagan National Airport near Washington, D.C.

Consumer groups generally favor the bill, which triples maximum fines for airlines that violate consumer protections, requires airlines to let families sit together at no extra charge, and requires that airline travel vouchers be good for at least five years. It also would write into law another new rule from the Transportation Department, which defines a significant delay — one that could lead to a refund — as three hours for domestic flights and six for international flights.

They didn’t get other items they wanted, however, including minimum seat sizes and more authority for the government to regulate airline schedules and fees.

The bill includes a number of safety-related measures in response to a series of close calls between planes at the nation’s airports. It will allow the FAA to increase the number of air traffic controllers and safety inspectors and to equip more airports with technology designed to prevent collisions between planes on runways.