Class Action Argues Contract Requires Southwest Airlines to Offer Refunds, Not Credits, for Canceled Flights [UPDATE]

A Pennsylvania consumer claims in a proposed class action lawsuit that Southwest Airlines has unlawfully gone against its own contract by failing to offer refunds for flights canceled due to the COVID-19 pandemic.

Filed in Pennsylvania’s Eastern District, the lawsuit says that Southwest, despite canceling 20 to 40 percent of its flights amid a drastic drop-off in demand for air travel, has offered passengers the choice to either rebook their flight to a route the airline has not canceled or obtain a travel credit for a future trip.

The suit scathes that while Southwest, in an “attempt to appear benevolent,” has claimed the travel credits will be available for use “through June 30, 2021,” the company’s “Contract of Carriage”—not to mention a sharp enforcement notice from the Department of Transportation (DOT)—mandates that consumers be offered proper refunds, and not just credits on future air travel, even when flights are being dropped en masse amid unprecedented circumstances.

Dept. of Transportation: Consumers Must Be Refunded “Promptly”

Southwest, the country’s largest domestic air carrier, was hit hard by the travel restrictions implemented at the state and federal level in an effort to combat the spread of the novel coronavirus, the lawsuit says. On March 31, the Department of State decreed that all U.S. citizens should temporarily avoid international travel, with minimal exceptions, while much of the country remained subject to various degrees of shelter-in-place orders aimed at eliminating non-essential movement during the pandemic.

With the tightening restrictions aimed at slowing the spread of COVID-19, consumer demand for air travel, particularly for leisure and non-essential business trips, declined quickly, the case continues. In step with other airlines, Southwest canceled many flights within the United States to avoid flying planes loaded with too many empty seats—and to, in effect, remain profitable, according to the lawsuit. Altogether, Southwest revised its flight schedule for April 14 through June 15 to cut the number of flight routes by 20 percent while maintaining a “rolling basis” in order to pivot where necessary, the case claims.

As the lawsuit tells it, Southwest, by late March, had canceled “1,500 daily flights, or about 40 percent of its typical daily service, due to declining demand.”

In an April 3 communication, the DOT reminded Southwest and other airlines of their responsibility, even amid the COVID-19 crisis, to refund tickets for flights canceled due to the coronavirus outbreak. More specifically, the DOT, in its “Enforcement Notice Regarding Refunds by Carriers Given the Unprecedented Impact of the COVID-19 Public Health Emergency on Air Travel,” reiterated that Southwest and its competitors should promptly refund passengers when their scheduled flights are canceled or significantly delayed. The DOT further remarked that airlines have “long provided such refunds, including during periods when air travel has been disrupted on a large scale” like it was in the aftermath of September 11, 2001 or during Hurricane Katrina.

“Although the COVID-19 public health emergency has had an unprecedented impact on air travel, the airlines’ obligation to refund passengers for canceled or significantly delayed flights remains unchanged,” the DOT said.

With the DOT’s position reiterated in stone, the lawsuit argues that Southwest’s failure to offer refunds violates not only its own Contract of Carriage, but also federal law.

Moreover, the lawsuit stresses that Southwest’s Contract of Carriage, which is referenced on every plane ticket sold by the airline, stipulates that the company will, in the event of canceled flights or irregular operations, either transport a passenger at no additional charge on a future flight on which space is available or refund the unused portion of the individual’s fare.

The plaintiff alleges that rather than offer one of the contractually outlined options, Southwest only offered a credit for a future flight.

“He had not used any portion of the ticket for his Trip,” the case relays. “Thus, pursuant to the terms of the Contract of Carriage, Plaintiff is entitled to a refund of the fare for the entire Trip in U.S. Dollars to his original form of payment.”

Who does this lawsuit look to cover?

The plaintiff proposes to cover all individuals in the United States who bought tickets to travel on a Southwest flight scheduled to operate from March 1, 2020 through the date the class may be certified by the court and whose flight/flights were canceled by the airline and were not provided a refund.

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