On Monday, the U.S. Transportation Department announced that six airlines were fined $7.25 million in penalties and will be refunding passengers $622 million over flight cancellations and other disruptions, as the agency vows to enforce consumer protection laws.
According to Transportation Secretary Pete Buttigieg, the actions ensure the carriers paid refunds “to hundreds of thousands of passengers whose flights were canceled or significantly changed.”
He said, “It shouldn’t take enforcement action from (USDOT) to get airlines to pay the funds they’re required to pay.”
It took many travelers months or even years to get refunds for delayed or canceled flights during the COVID-19 pandemic.
Frontier Airlines (ULCC.O) must refund $222 million and pay a $2.2 million fine under the settlement, while Tata Group-owned Air India must refund $121.5 million and pay a $1.4 million fine.
Additionally, customers who voluntarily canceled their non-refundable tickets during COVID will now receive refunds, and Frontier will have to dish out over $92 million.
The company said the refunds “demonstrate Frontier’s commitment to treating our customers with fairness and flexibility.”
TAP Portugal, a state-owned company, will provide $126.5 million in required refunds and pay a $1.1 million fine. In contrast, Avianca, a Colombian company, will issue $76.8 million in due refunds and pay a $750,000 fine.
El Al Israel Airlines (ELAL.TA) will refund $61.9 million and pay a $900,000 penalty, and Aeromexico (AEROMEX.MX) will refund $13.6 million and pay a $900,000 fine.
El Al claimed 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.”
As a result of Aeromexico’s refund policy, USDOT claims that thousands of U.S. passengers did not receive their refunds on time in 2020 and 2021.
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.”
According to USDOT, Air India 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.”
Other carriers are currently still under investigation by USDOT.
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