The U.S. Department of Transportation said Monday that six airlines have been hit with $7.25 million in fines and agreed to issue $622 million in passenger refunds as the agency promises to protect consumers enforce aggressively.
The measures helped airlines pay needed refunds “to hundreds of thousands of passengers whose flights were canceled or significantly changed,” Transport Secretary Pete Buttigieg told reporters. “It shouldn’t require enforcement action by (USDOT) to get airlines to pay the monies they have to pay.”
Many of the refunds have been for delayed or canceled flights during the COVID-19 pandemic, and many travelers have waited months or even years for refunds.
Buttigieg said ultra-low-cost carrier Frontier Airlines (ULCC.O) was required to pay $222 million in refunds as part of the settlements and would pay a $2.2 million penalty while in possession Air India, owned by Tata Group, will pay US$121.5 million in required refunds and a US$1.4 million penalty.
Frontier said it issued $92 million in refunds and redeemed credits and coupons to customers who voluntarily canceled non-refundable tickets during COVID and were not eligible for a refund. The refunds “demonstrate Frontier’s commitment to treating our customers fairly and flexibly,” it said.
State-owned TAP Portugal will issue $126.5 million in required refunds and pay a $1.1 million penalty, and Colombia’s Avianca (AVT_p.CN) will issue $76.8 million in required refunds Pay refunds and pay a $750,000 penalty.
El Al Israel Airlines (ELAL.TA) will issue $61.9 million in required refunds and pay a $900,000 penalty, and Mexico’s Aeromexico (AEROMEX.MX) will issue $13.6 million in required refunds and pay a $900,000 fine.
El Al told USDOT it has no policy to deny refunds and “priority refunds for US passengers,” but said it hasn’t been able to meet the department’s timeline due to the “COVID-19 emergency in the US.” exercised public health on its staff and finances.”
Avianca told USDOT it has no policy to refuse refunds, but “has to process approximately seven years’ worth of refund requests in one year with reduced staff.”
Aeromexico in 2020 and 2021 mandated that refunds be processed 12 months after receipt, USDOT said, resulting in thousands of U.S. passengers not receiving timely refunds. Aeromexico told USDOT, “As it faced the possibility of suspending operations, it made the difficult decision of restricting how passengers with non-refundable tickets can recover the value of those tickets.”
USDOT said Air India failed to provide timely refunds. The airline said it received a “deluge of refund requests” from March 2020 to September 2021 because of its “liberal, on-demand refund policy.”
TAP said it faced “an avalanche of refund requests and its call center quickly became overwhelmed”.
USDOT said it is investigating other airlines.
USDOT credited airlines with some payments for non-refundable tickets against the penalties: Frontier received a credit of $1.2 million, TAP Portugal $550,000, El Al $450,000 and Avianca $375,000.
https://nypost.com/2022/11/15/the-us-transportation-department-says-six-airlines-issue-622-million-in-refunds/ The US Department of Transportation says six airlines are issuing $622 million in refunds