TMC Group Proposes Revised DOT Rule for Airline Ticket Refunds, Consumer Protections

Six of the largest travel management companies have called
on the U.S. Department of Transportation to alter its proposed rule around
airline ticket refunds and consumer protections, noting that as currently
written, it “would create misplaced liability and uncertainty for travel
management businesses where they have no control,” according to a letter the
group sent Friday to DOT Secretary Pete Buttigieg.

The Travel Management Coalition, composed of Internova,
American Express Global Business Travel, BCD Travel, CWT, CTM North America and
Direct Travel, is particularly concerned with having TMCs, as ticket agents, be
responsible for a customer’s refund, credit or voucher under the rule “when
it is the airline that is the party determining flight schedules, [and] evaluating
and issuing refunds, credits or voucher requests.”

The coalition recommended three changes to the current
proposed rule, which DOT
announced in August. First is that ticket agents should not be liable for
refunds when the merchant of record is the airline, “which is the case in
nearly all transactions” TMCs facilitate, according to the letter, which
added that airlines typically are the ones that refund customers directly.

For the “rare” times where the TMC is the merchant
of record, the coalition also recommends that the ticket agent is not required
to provide a refund to the customer until the airline has refunded the cost of
the ticket to the agent. 

Third, the group wants airlines to “have the sole
responsibility” to evaluate, decide and communicate to the ticket agent
and customer, “in a clear and timely way,” whether a customer is
eligible for a refund, ticket or voucher “in any circumstance posed in the
rule, whether it relates to a cancelled or changed flight, or a health-related
reason requested by the consumer.”

With the current “loose guardrails” around when a
customer is eligible for a credit or voucher due to a health-related
circumstance, it could “significantly increase” assistance time for
these requests “and introduce uncertainty if airlines are not making
decisions and clearly communicating those decisions to the ticket agent and
customer in a timely way,” according to the letter.

Further, the group provided nearly a dozen additional
comments detailing specifics around the three key recommendations, such as
wanting the proposed rule to apply only to those transactions that have a point
of sale in the United States, that a refund authorized by an airline should be
made to the original form of payment, and recommending against requiring
airlines or ticket agents to issue a non-expiring credit or voucher as this
“creates financial uncertainty for businesses.”

The extended comments period for the proposed rule closed on
Friday, Dec. 16.