DOT forces more airlines to pay, announces $600 million in passenger refunds

The US Department of Transportation asked six other airlines to pay.

The ministry announced on Monday that it had forced the six airlines to pay more than $600 million in total in refunds that had accrued during the COVID-19 pandemic. In addition to refunds, the airlines must collectively pay $7.25 million in civil penalties for taking too long to reimburse passengers.

Want more airline-specific news? Sign up for TPG’s free bi-weekly aviation newsletter.

“When a flight is cancelled, passengers requesting a refund must be promptly reimbursed,” Transportation Secretary Pete Buttigieg said in a statement. money back. A flight cancellation is frustrating enough, and you shouldn’t have to haggle or wait months for your refund either.

In total, the DOT’s Aviation Consumer Protection Bureau has issued $8.1 million in penalties so far this year, a record.

There is only one US carrier on Monday’s list of airlines fined – Frontier Airlines. The ultra-low-cost carrier must repay $222 million in refunds and was fined $2.2 million.

The other five airlines are:

  • Air India, which must pay 121.5 million dollars in refunds and a fine of 1.4 million dollars.
  • TAP Portugal, which must pay $126.5 million in refunds and a fine of $1.1 million.
  • Aeromexico, which must pay $13.6 million in refunds and a fine of $900,000.
  • El Al, who must pay $61.9 million in refunds and a $900,000 fine.
  • Avianca, which must pay $76.8 million in refunds and a fine of $750,000.

In a statement, Frontier noted that it was paying $1 million out of pocket, after receiving $1.2 million in goodwill credit for providing the refunds.

Frontier Airlines issued more than $92 million in refunds and redeemed credits and vouchers to customers who voluntarily canceled their non-refundable tickets during the pandemic and were not entitled to a refund under US law. Additionally, the company provided more than $2.7 million in refunds by voluntarily applying a more generous definition of a long delay than was in effect at the time for customers who booked and purchased their tickets between 25 March and October 27, 2020. These goodwill repayments of nearly $100 million demonstrate Frontier’s commitment to treating our customers fairly and flexibly. Under the terms of the Consent Order, Frontier will make a total disbursement in the amount of $1 million, after receiving a Goodwill Reimbursement Credit of $1.2 million.

When demand for air travel quickly dried up at the onset of the COVID-19 pandemic, many airlines dramatically delayed refunds or offered vouchers instead, in an effort to preserve valuable cash. US law requires timely reimbursement when an airline cancels a flight or significantly changes its schedule, although the government has never specifically quantified what constitutes “timely”.

Subscribe to our daily newsletter

“The clock effectively starts at the start of the pandemic on these enforcement actions and these represent an end result,” Buttigieg said during a call with reporters announcing the sanctions.

After: Air Canada squeals $2 million fine for not refunding passengers

Monday’s action comes almost exactly one year after the DOT fines Air Canada $4.5 million in a lengthy reimbursement saga that played out in public, though Air Canada ended up paying just $2 million out of pocket.

And, Buttigieg said, the department isn’t done with asking consumers for big refunds just yet.

“We have other enforcement actions and investigations underway and there may be more news to come in the form of fines,” he said.

Buttigieg’s DOT has been heavily consumer-focused. Earlier this month, Buttigieg sent a letter to airline executives with suggestions on how to reduce flight delays around Florida and Mountain West. Earlier this year, the Ministry unveiled a dashboard which shows the type of accommodations passengers on US carriers receive when a delay or cancellation is within the control of the airline.

“As people prepare to fly this holiday season, we want passengers to know that the USDOT has their backs of course when it comes to safety, but also when it comes to meeting these important customer service standards. customer base,” Buttigieg said.

Comments are closed.