US orders Air India to pay $1.4 million for delay in providing refunds for cancelled flights
The Tata group-owned airline has paid $121.5 million (Rs 985.5 crore) as refunds for flight cancellation, mostly during the Covid-19 pandemic.
The United States government on Monday ordered Air India to pay $1.4 million (Rs 11.36 crore) as penalty for extreme delays in providing refunds to passengers due to the cancellation or change in flights, mostly during the pandemic.
Air India is one of the six airlines fined by the United States Department of Transportation for failing to provide timely refunds to passengers after flights were cancelled or significantly changed. The Tata group-owned airline has paid $121.5 million (Rs 985.57 crore) as refunds for flight cancellation.
Besides Air India, the other airlines that were asked to pay penalties for delay in refunds include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca.
The six airlines have paid $600 million (Rs 4,872 crore) in total as refunds, the Department of Transportation announced. The department has also assessed more than $7.25 million (Rs 58.8 crore) in civil penalties against the six airlines for extreme delays in providing refunds.
“With today’s fines, the Department’s Office of Aviation Consumer Protection has assessed $8.1 million (Rs 65.7 crore) in civil penalties in 2022, the largest amount ever issued in a single year by that office,” said the Department of Transportation.
“When a flight gets canceled, passengers seeking refunds should be paid back promptly,” said US Transportation Secretary Pete Buttigieg. “Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back. A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund.”
Under the United States’ law, airlines and ticket agents have a legal obligation to refund consumers if the airline cancels or significantly changes a flight to, from and within the United States, and the passenger does not wish to accept the alternative offered.
Air India took more than 100 days to process more than half of the 1,900 refund complaints filed with the Department of Transportation for flights that the carrier cancelled or significantly changed, reported PTI.
By David Shepardson
11/14/22
The U.S. Transportation Department said Monday that six airlines were slapped with $7.25 million in penalties and agreed to issue $622 million in passenger refunds as the agency vows to aggressively enforce consumer protections.
The actions helped ensure the carriers paid required refunds "to hundreds of thousands of passengers who had their flights canceled or significantly changed," Transportation Secretary Pete Buttigieg told reporters. "It shouldn't take enforcement action from (USDOT) to get airlines to pay the funds that they're required to pay."
Many of the refunds involved flights delayed or canceled during the COVID-19 pandemic, and many travelers waited months or even years for refunds.
Buttigieg said under the settlements ultra-low-cost carrier Frontier Airlines was required to pay $222 million in refunds and will pay a $2.2 million penalty, while Tata Group-owned Air India will pay $121.5 million in required refunds and a $1.4 million fine.
Frontier said it issued $92 million in refunds and redeemed credits and vouchers to customers who voluntarily canceled non-refundable tickets during COVID and were not entitled to refunds. It said the refunds "demonstrate Frontier's commitment to treating our customers with fairness and flexibility."
State-owned TAP Portugal will issue $126.5 million in required refunds and pay a $1.1 million penalty, and Colombia's Avianca will pay $76.8 million in required refunds and pay a $750,000 penalty.
El Al Israel Airlines will issue $61.9 million in required refunds and pay a $900,000 penalty, and Mexico's Aeromexico will pay $13.6 million in required refunds and a $900,000 fine.
El Al told USDOT it had no policy of denying refunds and "prioritized refunds for U.S. passengers," but said it had been unable to meet the department's timeframe because of the pressure the "COVID-19 public health emergency had on its personnel and its finances."
Avianca told USDOT it had no policy to deny refunds but "had to process approximately seven-years' worth of refund requests in one year with reduced staffing."
Aeromexico in 2020 and 2021 determined that refunds would be processed 12 months after receipt, USDOT said, resulting in thousands of U.S. passengers not getting timely refunds. Aeromexico told USDOT "as it faced the possibility that it would need to cease operations, it made the difficult decision to limit how passengers holding nonrefundable tickets could recover the value of those tickets."
USDOT said Air India did not provide timely refunds. The airline said it received a "flood of refund requests from March 2020 through September 2021 because of its "liberal refund-on-demand policy."
TAP said it had faced "an avalanche of refund requests and its call center was quickly overwhelmed."
USDOT said it is investigating other carriers.
USDOT credited airlines with some payments for nonrefundable tickets against the penalties: Frontier got a $1.2 million credit, TAP Portugal $550,000, El Al $450,000 and Avianca $375,000.
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