By Linda Chiem

Law360 (April 17, 2020, 7:24 PM EDT) -- Senate Democrats said Friday that major U.S. airlines are withholding an estimated $10 billion in refunds owed to travelers for canceled flights amid the coronavirus pandemic even after taxpayers fronted the airlines up to $50 billion in economic relief.

Sens. Edward J. Markey, D-Mass., Elizabeth Warren, D-Mass., Richard Blumenthal, D-Conn., and Kamala Harris, D-Calif., said that 11 major airlines responded to their recent letter demanding more information on their refund policies and urging airlines to issue full cash refunds — not just vouchers or credits for future travel — to all customers who cancel their flights during the ongoing public health crisis.

The senators had sent their March 31 letter days after Congress passed a sprawling $2.2 trillion economic relief package, the Coronavirus Aid, Relief and Economic Security Act, which gave the airline industry $25 billion in payroll support grants and $25 billion in loans.

Days later, the U.S. Department of Transportation issued an enforcement notice on April 3 warning airlines that they're still required to refund passengers for flights that are canceled or significantly delayed, even as government travel advisories and stay-at-home mandates aimed at combating the COVID-19 outbreak obliterate airlines' passenger volumes and revenues.

The senators on Friday called out the airlines for "obfuscating" passengers' rights to refunds by offering travel vouchers as the default option and requiring passengers to take burdensome steps to request refunds instead.

"In light of this pressing need, and the unprecedented multi-billion-dollar bailout that the airline industry just received from Congress, we are absolutely outraged that so few airlines are willing to offer real cash refunds to consumers who must cancel their tickets," the senators said in a joint statement Friday. "Although most companies refused to say just how much money they are sitting on in the form of travel vouchers, we estimate that the airlines could be holding onto over $10 billion of hard-earned money from American travelers."

American Airlines, Alaska Airlines, Allegiant Air, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, Spirit Airlines, Sun Country Airlines and United Airlines detailed their respective COVID-19 policies for refunds, vouchers and credits, the senators said. Airlines for America, the trade group for the largest airlines, also submitted comments.

According to the senators, although every airline is offering cash refunds when the company itself cancels a flight, as required by DOT rules, only two airlines — Allegiant and Spirit — are offering refunds to passengers who voluntarily and proactively cancel their own tickets amid the crisis.

Hawaiian Airlines is the only carrier that's offering cash refunds to passengers who proactively cancel their tickets for flights that are subsequently canceled by the airline, the senators said.

And while many airlines are issuing travel vouchers that are valid for up to two years, some airlines have indicated that the travel vouchers they're offering for COVID-19 cancellations would expire within one year, the senators said.

The airlines defended their respective policies, asserting that they're doing their best to take care of customers' requests while they continue to navigate the unprecedented impact the pandemic has had on global travel. They've said they're fully complying with the terms of their respective contracts of carriage and DOT regulations.

Airlines for America explained that "no two airline companies are the same, and each carefully develops its own unique response to travel changes, cancellations and refunds, among other consumer questions."

"Each airline has crafted an approach it believes will best address the concerns and interests of its customers and crew, while ensuring compliance with federal rules," the group said.

Several airlines, including United, Southwest and JetBlue, have already been hit with consumer lawsuits alleging they're improperly hanging onto customers' refunds.

--Editing by Jay Jackson Jr.

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