Southwest Fails to Refund TSA Fees for Canceled Travel, Class Action Alleges [UPDATE]

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A proposed class action lawsuit alleges Southwest Airlines has breached its contracts with customers by failing to refund prepaid security fees when a passenger does not travel.

The 11-page lawsuit says that until March 30, 2022, Southwest promised in its contract of carriage to refund TSA fees to a customer’s original form of payment as required by applicable regulations. Although the applicable regulations indeed require airlines to refund TSA fees for unused travel, Southwest has instead issued refunds in the form of a travel credit, the suit claims.

The lawsuit contests that unlike a refund to a customer’s original form of payment, a travel credit is restricted for use by only the originally ticketed passenger and expires one year after the date of issuance.

According to the case, Southwest, by failing to issue proper refunds to customers as contractually required, has “essentially kept these monies intended to be remitted to the federal government for itself.”

The lawsuit relays that the Aviation and Transportation Security Act requires airlines to collect from passengers prepaid TSA fees that are then remitted to the government to cover the costs of providing civil aviation security services. In line with these regulations, Southwest collects a TSA fee of $5.60 for one-way travel and $11.20 for round-trip travel for flights leaving from U.S. airports, the case relays.

Per the suit, federal regulations also dictate that when a passenger does not travel, the TSA fee is to be refunded to the person’s original form of payment. Likewise, Southwest’s contract of carriage (COC), until March 30, 2022, stated that any taxes, security fees and passenger facility charges associated with a nonrefundable fare in the case of unused travel are not eligible for a refund, “except as required by applicable regulations,” the lawsuit says.

In other words, when a customer does not travel, Southwest is required by its contract of carriage to refund the TSA fee since that is what federal regulations require, the case argues.

Per the suit, the rationale behind these refunds “is quite simple.” Since passengers prepay the TSA fee with their ticket purchase, they are then owed a refund if they do not end up using the security services the fee was intended to cover, the case reasons.

The lawsuit alleges, however, that when a Southwest passenger does not travel, it is the airline’s practice to issue TSA fee refunds in the form of a travel credit for the passenger’s possible future travel with Southwest. As the suit tells it, this form of a refund is more limited than a refund to the passenger’s original form of payment given it is restricted to only the originally ticketed passenger for use with Southwest Airlines and expires after one year.

The lawsuit claims that this practice has affected an even larger subset of Southwest passengers in recent years as the COVID-19 pandemic has disrupted travel plans. Per the case, Southwest updated its contract of carriage on March 31, 2022 to remove the provision requiring the airline to refund TSA fees as required by applicable regulations.

The case looks to represent anyone with a reservation purchased from Southwest that included a departure from an airport in the United States, whose travel was canceled before the scheduled departure date or who otherwise did not travel, and who had their TSA security fee payment converted to a Southwest travel credit at any time within the past four years and through March 30, 2022.

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