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Updated: Wednesday, April 7, 2010 8:06 AM


Passenger Facility Charge Refunds


Passenger Facility Charge Refunds

Issued March 31, 2010 | On File at the Federal Register April 6, 2010 | To Be Filed April 7, 2010

Notice - Interpretation of 49 CFR Section 158.45

The Department received a request for a legal interpretation from the Interim Trustee of an air carrier in a Chapter 11 liquidation proceeding, regarding an airport’s obligation to refund passenger facility charges for certain tickets purchased by consumers with credit cards. These tickets were never used due to the airline’s cessation of operations prior to the flight dates. On March 30, 2010, the Department sent the Interim Trustee the response re-printed below, which supersedes informal communications that the Department and the FAA have provided in prior instances.

In the majority of airline customer refund requests, the Department has made clear that no refund of a PFC is due where no refund of the ticket is due, as is usually the case for nonrefundable tickets. See 14 CFR §158.45(a); 72 Fed. Reg. 28837 at 28843. However, a distinction must be made in an airline’s liquidation where the tickets in question were purchased by credit card, the defunct airline has not operated the relevant flights, and the defunct airline is no longer operating (and no delivery of the airline transportation service is therefore possible). In such an instance, pursuant to applicable regulations of the Federal Reserve System, enforced by the Department for airline ticket sales, a refund is due and owing to the customer, including the PFC. See Federal Truth in Lending Act/Regulation Z requirements (12 CFR §226.13(e); 14 CFR § 374.3(b)). Because the Interim Trustee’s letter requested an interpretation only with respect to tickets purchased with credit cards, the Department’s letter addresses only that situation. We defer to the Bankruptcy Court on which party may properly claim repayment of the PFCs from the airports (Aloha’s bankruptcy estate or the credit card processor that has refunded such amounts to the ticket purchasers), or how such collection should be effected. If any questions arise, please feel free to contact Ronald Jackson, DOT Assistant General Counsel for Operations, at 202-366-9151.

By: Ronald Jackson


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