Deregulating Consumers from the Airline Industry—DOT’s Proposed Rule in Response to U.S. Airlines’ Refusal to Refund Unused Tickets During COVID-19

Abstract

The COVID-19 pandemic has resulted in significant delays and cancellation of airline tickets without proper refunds to consumers by U.S. airlines. In response to an unprecedented number of consumer complaints, in August 2022, the Department of Transportation (Department or DOT) proposed new rules regarding airline ticket refunds and consumer protections.Does this rule go far enough? This article provides a summary of the events and policy changes leading up to the Airline Deregulation Act (ADA) of 1978 and challenges the scope of federal preemption over the field of airline regulation that has created a boon to air carriers while essentially eliminating consumers as a market influencer. A review of court opinions since the enactment of the ADA shows an ongoing struggle with the scope of preemption and tenuous carve-outs for private rights of action. The role and effectiveness of DOT is evaluated in light of airlines refusal to comply with DOT requirements to provide ticket refunds for cancelled flights during COVID. This article also suggests ways to increase airline accountability for compliance with airline refund policies and increase protection of consumer rights by empowering consumers to bring private actions against airlines.