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America's bailed-out airlines are not 'playing fair' with customers, travel expert says

America’s airlines, along with small businesses, other corporations, and individual taxpayers, will receive billions from a $2 trillion stimulus package passed by Congress on Friday to aid the U.S. economy amid the coronavirus pandemic.

But in an interview with Yahoo Finance’s “On The Move” on Thursday, CBS Travel Editor Peter Greenberg questioned whether the then-proposed legislation protects passengers, too.

“The airlines are getting bailed out, but are they bailing out the passengers themselves?” he said.

The bipartisan coronavirus bailout package gives more than $60 billion to U.S. airlines, including $25 billion in grants for commercial airlines, provided that they use it to pay their employees’ salary and benefits. In exchange for taking the grants, the federal government can take equity stake in airlines.

Greenberg said if the U.S. government takes an equity stake in airlines, passenger protection must be revived — including by giving passengers full refunds if their flights are canceled. This week, USA Today reported that, as flights were canceled due to the coronavirus, many airlines were offering vouchers or rebooking over the phone rather than full refunds.

NEW YORK, NY - MARCH 15: A Delta flight from Seattle-Tacoma International Airport flies nearly empty to JFK on March 15, 2020 near New York City. The state of Washington has over 600 confirmed cases of coronavirus (COVID-19) and U.S. airports have been crushed with returning citizens after restrictions on travel from Europe were implemented. (Photo by John Moore/Getty Images)

“In fact, if you go to the DOT's [Department of Transportation] website, it specifically states in there that, if the airline cancels your flight for any reason, you are entitled to a full refund back to the original form of payment. And the airlines are not playing fair about that right now.”

In order for the airlines to get taxpayer dollars, Greenberg argued there must be oversight. “We have a consumer protection component that needs to come back in if we're essentially loaning the airlines all this money,” he said. And that means the U.S. Department of Transportation [DOT] needs to step up and stop being “spineless,” he said.

To be sure, the airline industry has been particularly hard hit by the coronavirus, and it continues to bleed cash as it awaits stimulus from the federal government. The airlines that do survive the crisis could “come back a lot smaller,” Greenberg.

That means customers will see dozens of routes cut back to many cities around the world, he warned. Greenberg predicts domestic travel in the United States will be the first to resume, saying it could be a while before people look to travel beyond U.S. borders.

“If you go back to post-9/11, Americans were terrified about flying over a body of water to go anywhere because of terrorism,” he said. “Today, they're terrified about flying over a body of water, because they're afraid they're going to get stuck in quarantine and can't get home.”

Yvette Killian is a producer for Yahoo Finance’s On The Move.

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