USDOT Reminds Airlines Of Refund Obligations After Crowdstrike Global IT Fail

Pete Buttigieg, the Secretary of Transportation of the United States, working for the Department of Transportation (DOT), has reminded US-based and foreign airlines of their obligations to issue refunds to passengers who have opted not to take alternative travel options during the massive IT outage related to CrowdStrike.

Refunds to passengers

Buttigieg’s letter, which was published publicly on the DOT’s website, began with the words “Dear CEO [chief executive officer – ed. note],” with the Secretary addressing that he wanted to ensure airlines have a clear understanding of the rules regarding refunds to passengers.

“First, I need to remind airlines operating in the United States that the refund requirements in the FAA Reauthorization Act took effect upon enactment of the law on May 16, 2024. Now that this is law, our expectation is that airlines are doing everything in their power to comply.”

Secondly, Buttigieg highlighted that there have been reports of unacceptable customer service failures, with the DOT receiving thousands of air travel service complaints against airlines. The Secretary stated that the Department would investigate the reports and hold offending carriers accountable.

Photo: US Department of Transportation

The letter outlined that airlines need to clearly communicate to passengers about their right to a refund, which should be automatic and come in the form of cash and not a voucher or credit, and that carriers must make it easy for travelers to freely rebook, get meals, hotels, and transportation to hotels during controlled disruptions.

If passengers do opt for vouchers for their refunds, these must last at least five years, Buttigieg said.

Related

Automatic Refunds: What US Flyers Need To Know About The New DOT Rules

Significant changes to how airlines deal with refunds.

Canceling thousands of flights in the US

According to data that Flightradar24 provided to Simple Flying, between July 19 and July 21, 16,344 flights were canceled in the US. Meanwhile, Delta Air Lines, whose operations had continued to be affected by the IT outage for the remainder of the week, canceled over 7,000 flights from July 19 and July 24.

Photo: Kevin Hackert | Shutterstock

The US Cybersecurity and Infrastructure Security Agency (CISA) detailed that on July 19, CrowdStrike, a cybersecurity technology company based in the US, was the culprit of the outage that affected Windows 10 and later systems.

While airlines had largely restarted their operations by July 20, Delta Air Lines continued suffering problems for the next few days. On July 31, Ed Bastian, the chief executive officer (CEO) of Delta Air Lines, told CNBC that the outage and subsequent collapse of its operations would cost the airline around $500 million.

Related

Breaking: Global Airlines And Airports Down Due To IT Vulnerability

The IT issue now involves several global companies and businesses.

Fighting airlines in court

Buttigieg’s letter concluded by saying that airlines have requested additional time to comply with various aspects of the Federal Aviation Administration (FAA) Reauthorization Act, as well as the DOT’s rulemaking on refunds and other consumer protections.

“The Department has found no basis for adjusting the compliance dates set forth in our rule […].”

Photo: Joe Kunzler | Simple Flying

However, the US Court of Appeals for the Fifth Circuit ruled in favor of US-based airlines, represented by Airlines for America (A4A), with the court suspending the junk fee rule.

The rule, enacted in April, mandated that airlines showed all of the fees, including ancillary fees, when a passenger was booking their ticket, in a transparent manner.

Related

Appeals Court Sides With Airlines On New USDOT “Junk Fee” Rule

Airlines for America (A4A) successfully petitioned the court to pause the implementation of the junk fees rule.