Delta Airlines agreed to pay over $27 million in refunds to passengers whose flights the company canceled during the pandemic, but refused to provide refunds.

The class-action settlement was agreed upon between Delta Airlines and the plaintiff in May. The division of the U.S. District Court of the Northern District of Georgia, Atlanta, granted a preliminary approval for the settlement in June. On Oct. 5, the court granted the final approval, thus allowing the settlement to be carried out. According to the agreement, settlement class members are eligible for $27.31 million from Delta.

The settlement applies to Americans affected by flight cancellations initiated by Delta during the COVID-19 period and received credits instead of cash refunds from the airline

Class members are individuals who bought tickets from Delta for flights between March 1, 2020, and April 30, 2021. There were three conditions to be a class member: Delta should have canceled the individual’s flight; the person should have requested the refund and not received it; and the individual must have unused or partial unused credit as of Jan. 13, 2023.

In addition to $27.31 million, Delta will also pay 7 percent interest on this amount as well as $51,300 in litigation costs, $246,465 in settlement administration costs, and $2.28 million in attorneys’ fees. This takes the total amount paid by Delta to $29.89 million.

There were 74,346 eligible settlement class members, out of which 14,096 or around 19 percent submitted claims to the settlement administrator. The deadline for submitting the claim was Sept. 15.

The court observed that if the settlement were not to be agreed upon, then the risk of the litigation getting delayed is “substantial” as Delta has denied any wrongdoing or liability.

“To achieve relief similar to the Settlement Benefits, if Plaintiff were to continue litigating, she would have to overcome the obstacles of obtaining class certification, surviving summary judgment, and winning at trial. Even a successful trial might not yield more favorable results than the Settlement terms already achieved, and recovery might be delayed for years by an appeal.”

“All that is certain is that with continued litigation, the Settlement Class would face a notably longer wait before receiving any potential recovery, if they received any recovery at all.”

Any remaining funds from the settlement will be split equally between Public Justice, a nonprofit legal advocacy, and United Way of Greater Atlanta, a children's charity.

A Delta spokesperson told Business Insider that “in the settlement agreement from May 2023, Delta does not admit or acknowledge it failed to follow its contract of carriage or that it failed to provide refunds in accordance with its contract of carriage.”

“Since the beginning of 2020, Delta refunded over 11 million tickets totaling $6 billion, of which 20 percent took place in 2022.”

Lawsuit, Refunds

The class action lawsuit which led to the settlement was filed by plaintiff Angela Dusko in April 2020. At the time, Delta was canceling flights amid the COVID-19 pandemic.

In December 2019, Ms. Dusko bought roundtrip tickets from Delta, paying $2,783.24. The trip was scheduled for March 27, 2020, with the return travel set for April 3.

On March 25, Delta informed Ms. Dusko that the outbound flight was canceled and that it was attempting to rebook tickets. The next day, Ms. Dusko was informed that the tickets had been rebooked for March 28.

The plaintiff called Delta’s customer service and notified that she did not want to be rebooked and demanded a full refund for canceling the original tickets.

The customer service denied the request and said that if Ms. Dusko chose not to take the rebooked flight, she would only be entitled to flight vouchers and not a refund.

Airline companies are obligated to provide passengers with refunds in case the cancelation of flights is initiated by the airlines. Ms. Dusko filed a lawsuit, which eventually led to the current settlement.

“Delta’s acts described in this Complaint reflect a failure by Delta to perform the promises required by the Contracts in accord with the covenant of good faith and fair dealing,” the lawsuit said.

“Although Delta has canceled thousands of flights, it has failed to provide the cooperation necessary to allow Plaintiff and members of the Class to perform under the contract’s flight cancellation and refund provisions, which provide that Plaintiff and the Class are entitled to refunds if they were not reaccommodated (to their satisfaction) and transported on the next available flight.”

The lawsuit from Ms. Dusko was consolidated with other similar cases. One plaintiff in the case was a teacher who paid $2,400 for nine student flights that got canceled. Another plaintiff spent over $3,000 on flights to Egypt.

According to the U.S. Department of Transportation (DOT), a consumer is entitled to a refund if “the airline cancelled a flight, regardless of the reason, and the consumer chooses not to travel.” In case an airline or a ticket agent refuses to provide the refund, a complaint can be sent to the DOT.

Airlines and agents are required to make refunds within seven business days if the customer paid by credit card and within 20 days in case the payment was made via cash or check.

In November last year, the DOT announced that airlines paid over $600 million in refunds to passengers who were owed the refunds due to canceled or “significantly changed” flights.