Bill Overview
Title: Cash Refunds for Flight Cancellations Act of 2022
Description: This bill requires air carriers and ticket agents to offer full cash refunds for airline tickets if (1) an airline cancels or significantly delays a flight, or (2) a passenger cancels their ticket for a flight up until 48 hours of the scheduled departure time. The bill permits air carriers and tickets agents to offer alternative forms of compensation, including credit, or vouchers, provided that such offer is valid indefinitely and the offer includes a clear and conspicuous notice of the passenger's right to a cash refund. Additionally, the bill requires air carriers and ticket agents to disclose to passengers, prior to the sale of airline tickets, that they can cancel their tickets and receive a full refund.
Sponsors: Rep. Cohen, Steve [D-TN-9]
Target Audience
Population: Individuals who travel by air globally
Estimated Size: 700000000
- The global aviation industry served approximately 4.5 billion passengers in 2019 pre-pandemic, according to the International Air Transport Association.
- COVID-19 impact has affected travel volumes, but recovery is ongoing with significant numbers traveling internationally.
- Flight cancellations and delays are common worldwide, especially in the current global context with COVID-19 effects on staffing and logistical issues.
- The legislation impacts any air traveler globally who books flights on carriers adhering to this legislation or similar policies regarding cancellations and refunds.
Reasoning
- The policy mainly affects frequent travelers and those who face flight cancellations or delays, so we should include a variety of travelers in our interviews, including business travelers, leisure travelers, and others who may travel less frequently.
- We should keep in mind that not everyone will experience the impact similarly. For example, those who can reschedule without financial hardship might perceive less benefit than those who would otherwise incur unforeseen costs.
- The budget constraints suggest that the policy needs to focus on situations that incur substantial economic costs to minimize payout, i.e., it will have more impact on people who cannot afford or do not want to use flight credits.
- While a large number of people fly every year, many are infrequent flyers who might not be directly impacted year-to-year. More frequent travelers might face more substantial and recurring impacts from cancellations and delays.
Simulated Interviews
Corporate Lawyer (New York City, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 1.0 years
Commonness: 15/20
Statement of Opinion:
- This policy ensures peace of mind when booking flights for business; knowing I can get a cash refund removes the hassle of dealing with credit or vouchers.
- Previously, delays and cancellations could result in financial juggling, especially with reimbursement processes. Direct cash refunds simplify things.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Digital Nomad (Los Angeles, CA)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This policy is beneficial for travelers like me who need flexibility and assurance. Cash refunds provide more options.
- Airline credits have often locked me into airlines, while a refund would allow me to choose the best alternative flights available.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Retired (Chicago, IL)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- Knowing cancellations won't trap my funds as vouchers puts my mind at ease, especially around holiday travel.
- Refunds should always have been an option; family emergencies often disrupt plans, and credits aren't always useful immediately.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Environmental Scientist (Denver, CO)
Age: 34 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- A policy making cash refunds mandatory should elevate transparency and fairness in ticket purchasing.
- The option for a cash refund over credit allows for greater financial flexibility, crucial when projects fluctuate in timing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
College Student (Austin, TX)
Age: 22 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- Being able to get a cash refund instead of credit eases the burden of financial planning as a student. It's a big improvement.
- Previously, a canceled flight would leave me stuck without resources until I could join another financially feasible flight.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Small Business Owner (Seattle, WA)
Age: 39 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 13/20
Statement of Opinion:
- Simplicity in travel cancellation policies aids in efficient financial business planning.
- Having indefinite credits sounds good, but actual cash refunds are preferable for timely reinvestment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Tour Guide (Miami, FL)
Age: 56 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- The bill’s flexibility helps me maintain my schedule without tying funds into unused credits.
- Cash refunds assist in managing fluctuating tour schedules without disrupting cash flow unnecessarily.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Hotel Manager (San Francisco, CA)
Age: 49 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- This policy could prevent losses related to planned professional development trips that are canceled last minute.
- It should have positive long-term implications for personal mobility and autonomy for business decision-making.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
IT Specialist (Philadelphia, PA)
Age: 41 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 9/20
Statement of Opinion:
- Hassle-free refunds for cancellations will streamline the booking process, making it more reliable.
- I will feel more secure about booking distant trainings with this refund policy in place.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Intern (Raleigh, NC)
Age: 19 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 16/20
Statement of Opinion:
- On a tight budget, knowing I can retrieve my money from a canceled flight is reassuring.
- Given that internships offer limited funds, having non-negligible credits has been problematic before.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $3000000000 (Low: $2000000000, High: $4000000000)
Year 2: $3100000000 (Low: $2100000000, High: $4100000000)
Year 3: $3200000000 (Low: $2200000000, High: $4200000000)
Year 5: $3500000000 (Low: $2500000000, High: $4500000000)
Year 10: $4000000000 (Low: $2900000000, High: $4900000000)
Year 100: $5000000000 (Low: $3500000000, High: $6500000000)
Key Considerations
- The scalability of airline operations to handle increased cash refunds may vary greatly depending on the size and financial stability of the carrier.
- Consumer behavior might shift towards favoring flexible payment methods or purchasing insurance to safeguard against cancellations.
- Global economic conditions, like post-pandemic recovery, may influence both demand for air travel and the ability of airlines to comply with the policy requirements without significant financial strain.