Airlines Put Up a Fight as Consumers Try to Sue for Unpaid Refunds

The coronavirus pandemic has made flying pretty much anywhere a gamble. Countless would-be flyers have canceled flights and used alternative methods to travel, assuming they did not nix their travel plans entirely. While airlines are struggling to make a dollar, people are feeling the bite of the travel bug that they can’t itch. The Taipei International Airport in Taiwan recently promoted its upgraded facilities and catered to travel-hungry people by raffling away a chance to take a flight to nowhere, an interesting publicity stunt that would probably only ever happen during these unprecedented times.

However, the situation is far less fun-minded in America, where the virus’s infection rate has ballooned to harrowing percentages. Thousands upon thousands of people across the country have needed to cancel flights and request a refund in only a few months’ time. With the pandemic in the country not slowing down, airlines will not be able to safely return to normal operations anytime soon, so issuing all of the requested refunds would likely spell bankruptcy for many major airline companies.

Rather than taking the loss in stride, some airlines have put up a fight to provide any fair refunds, resulting in consumer lawsuits piling up against them. Some have also made hasty changes to the fine print in their consumer contracts.

Contract of Carriage Changes

When you purchase an airline ticket, whether you realize it or not, you will be required to agree to a contract of carriage. More or less, the contract of carriage you “sign” by completing your purchase is the terms and conditions of the service, much like you would see in a warranty and terms-of-use pamphlet provided with a product purchase.

As the pandemic was ramping up in April and May, some airlines like American Airlines dashed to revise their contract of carriage clauses. Specifically, they added a bit that said passengers cannot join a class action lawsuit that names the airline as a defendant for any reason. Instead, individual forced arbitration would have to be used to resolve any legal grievances.

If you aren’t familiar with the term, forced arbitration has been a corporate favorite for years and years. It is a way for corporations to protect their profits and reputations by preventing consumers from taking them to court, where a judge or jury can decide how much they owe the plaintiff and where details of a case are made public. Forced arbitration is problematic, to say the least, because it places all the power over legal negotiations into the corporation’s hands, leaving the plaintiff to play by their rules and hope for the best.

Demands of Consumer Class Actions

Despite the revised contract of carriage clauses, consumer class actions and litigation attempts are still being brought against airlines who are refusing to give refunds. A class action usually bundles hundreds or thousands of plaintiffs who have all been injured or defrauded in a similar way by the defendant into one plaintiff class, simplifying and streamlining litigation, so a conclusion can be reached sooner and with less resource demand. In the class actions forming against airlines, the plaintiff class wants to be refunded for flights that the airlines canceled due to COVID-19 risks, not necessarily for flights that passengers canceled themselves. The U.S. Department of Transportation (DOT) has already issued two press releases instructing airlines to pay passengers for canceled flights, but it seems that airline companies are not in a hurry to be compliant.

Some airlines have also caught criticism for allegedly attempting to pad their finances in the early weeks of the pandemic by selling flights they knew they would later have to cancel. Whether or not this deceiving business tactic is true and if it will be met with a separate set of consumer lawsuits is a different matter entirely, though. For now, airlines will need to focus on how they will respond to the growing number of consumer lawsuits and class actions. A misstep could land them in worse financial trouble than they are already in.

For more information about this developing situation, you can click here to read a full article from SFGate newsgroup. For questions about consumer class actions and whether or not you should join one, you can call (215) 278-4449 and connect with Golomb & Honik, P.C. We are located in Philadelphia but can assist clients across the nation.

Categories: