Ted Cruz Called Automatic Airline Refunds a ‘Dumb Idea.’ Senators Disagreed

While Sen. Ted Cruz (R-Texas) recently called requiring automatic refunds for canceled flights a “dumb idea,” his fellow senators disagree. Lawmakers are moving to strengthen their aviation reauthorization bill after Cruz and three other lawmakers were slammed for attempting to undermine President Joe Biden’s new airline regulations.

Last week, The Lever reported that Cruz, Sen. Maria Cantwell (D-Wash.), Rep. Sam Graves (R-Mo.), and Rep. Rick Larsen (D-Wash.) — who have all been bankrolled by the airline industry — introduced a new Federal Aviation Administration reauthorization deal that would require customers to send a “written or electronic request” in order to receive a full refund for a canceled or significantly delayed flight.

The provision received backlash, as it would undercut the Biden administration’s promise to streamline the refund process for airline customers — which has become a bigger problem for consumers as airlines have routinely sold tickets on flights they do not have the capacity to operate.

On Tuesday, Reuters reported that congressional lawmakers agreed to revise the FAA deal to ensure that customers will receive automatic refunds if they do not wish to stick with a significantly delayed flight or accept a rebooked flight.

Following The Lever’s reporting, Cruz defended his introduction of the must-pass legislation during a CNBC interview, blaming “one tweet” by Sen. Elizabeth Warren (D-Mass.) for inciting the controversy. He then proceeded to claim that most airline passengers don’t want their money back when airlines cancel their flights.

“Most consumers, if a flight is canceled, don’t want an immediate refund, they want to book a new flight,” he reasoned, dumping the last vestiges of logic as he explained that “almost all conservatives say, OK, put me on the next flight, and the rule saying no, you gotta give the money back automatically, no matter what the customer wants, that’s frankly a dumb idea.”

On Tuesday, The Lever reported that financial statements from Southwest Airlines and Delta Air Lines suggested that the companies had an estimated $2 billion and $6 billion each in unused flight credits, respectively. According to a February filing with the Securities and Exchange Commission, per the publication, Hawaiian Airlines made $312 million from 2020 to 2023 in unused, expired passenger tickets.

In 2020, an investigation by Warren, then-Sen. Kamala Harris (D-Calif.), and other senators estimated that “airlines could be holding onto over $10 billion of hard-earned money from American travelers” in the form of unused travel vouchers.

“If these companies released that money back to the public, it would provide a significant stimulus for struggling families,” they wrote in a joint statement. “That’s why we once again urge the airlines to end their anti-consumer policies and offer real refunds during this emergency.”

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