US rejects airlines bid for more time on passenger obligations

By David Shepardson

WASHINGTON (Reuters) -U.S. Transportation Secretary Pete Buttigieg on Tuesday warned the 10 largest U.S. airlines they must comply with new passenger refund obligations passed by Congress in May, rejecting an industry request for more time.

Buttigieg said in letters to airline CEOs that they must follow the new refund provisions taking a hard line with the industry.

"The law did not provide for extensions or delays. Accordingly, we will be taking all appropriate steps to responsibly enforce these provisions using our investigative and enforcement powers," Buttigieg said.

Airlines for America, an industry trade group representing Delta Air Lines, United Airlines, American Airlines, Southwest Airlines and others, on July 3 had sought additional time on a number of provisions.

The group said "the new technology solutions necessary to comply with these requirements will necessitate thorough development, testing and refinement before successful deployment."

The group did not immediately comment on Buttigieg's letter.

The DOT announcement came a day after the 5th Circuit U.S. Court of Appeals blocked new DOT airline fee disclosure rules from taking effect in October.

A4A warned that giving automatic refunds if consumers do not respond to an offer of alternative transportation and the flight departs without that passenger could "negatively impact many consumers" and leave them without a new flight.

"Airlines must clearly and proactively inform passengers of their right to a refund whenever their flight is canceled or significantly changed," Buttigieg said. "Cash refunds - not vouchers or credits - must be automatic for passengers when they are owed."

The issue has gained new attention after a software update by global cybersecurity firm CrowdStrike triggered system problems for Microsoft customers including airlines on July 19.

Delta suffered widespread woes for six days, resulting in more than 6,000 flight cancellations, impacting more than 500,000 passengers and prompting DOT to open an investigation.

Congress in May required airlines to take a number of immediate steps including make credits good for five years.

A4A said most airlines said "they do not have the technological means to issue and support vouchers and flight credits with a minimum travel validity period of five years" and many airlines "estimate that 12 months will be needed to achieve the required solution."

Buttigieg rejected that: "Any airline that has provided vouchers or credits with a shorter validity period must take immediate steps to remedy this noncompliance," he wrote.

(Reporting by David Shepardson; Editing by Cynthia Osterman and Stephen Coates)