FAA Reauthorization Bill Passes, Leaving Advisors on the Hook for Airline Refunds

The Federal Aviation Administration (FAA) Reauthorization Bill was approved by the Senate late on Thursday, May 9 with bad news for U.S. travel agencies.

The Bill passed without the American Society of Travel Advisors (ASTA)-supported an amendment that would have taken agencies off the hook for providing airline refunds in cases where they are the merchant of record. The bill now requires travel advisors to refund money to travelers whose flights have been canceled by the airlines even if the advisor does not possess the traveler’s funds

ASTA had strongly campaigned against the language in the bill and had supported a last-minute amendment introduced by St. Rand Paul (R-KLY) that would have restored the bill’s original language. However, the bill passed without that amendment included on Thursday.

“Time and time again, we’ve heard politicians in Washington give lip service to small businesses. Travel agencies are not positioned to float the kind of financial obligations that policymakers are strapping on their backs,” said Zane Kerby, President and CEO of ASTA.

While the bill has been championed in the consumer press as largely pro-consumer, ASTA said that lawmakers, who largely lacked a level of understanding about the agency business, could have achieved the same without hurting the travel trade.

“Consumer protection could have been accomplished without sacrificing the interests of small business travel advisors who work diligently every day on behalf of the traveling public,” Kerby said on Thursday.

That misunderstanding is most notably seen in grouping small agencies in the same category as large online travel agencies (OTA), who have a vastly different business model, and a very different ability to repay an airline refund.

ASTA will now turn attention towards its annual Legislative Day in September, where the bill will be the “first item on the agenda.”