US authority orders six airlines to repay $600 million in passenger refunds

The US Department of Transportation (DOT) announced enforcement actions against six airlines, which have collectively paid $600 million to passengers who were owed a refund due to a canceled or “significantly changed” flight. 

The fines are part of DOT’s “ongoing work to ensure Americans receive the refunds they are owed from airlines”, the regulatory body said in a statement released on November 14, 2022.  

Frontier Airlines, Air India, TAP Air Portugal, Aeromexico, El Al, and Avianca (AVHOQ) are also being assessed for a collective $7.25 million in civil penalties “for extreme delays in providing funds”, the DOT said.  

Denver-based low-cost carrier Frontier, Portugal’s flag carrier TAP Air Portugal and India’s flag carrier Air India received the most significant fines.  

While Frontier was obliged to pay $222 million in refunds as well as a $2.2 million penalty, the Portuguese airline was required to cover $126.5 million for passengers and paid an additional penalty of $1.1 million. Meanwhile, Delhi-based Air India repaid $121.5 million in required refunds and was additionally fined for refund delays with a $1.4 million fine.  

Colombian airline Avianca (AVHOQ) received a $750,000 penalty and returned $76.8 million in a required refund, while Israel’s flag carrier El Al was told to cover $61.9 million in refunds as well as to pay a $900,000 penalty.  

Aeromexico, which was due to repay $13.6 million in required refunds, was also ordered to pay a $900,000 civil penalty.  

Holding airlines “accountable” 

“When a flight gets canceled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back,” US Transportation Secretary Pete Buttigieg was quoted as saying in the DOT statement.  

“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund,” Buttigieg added.  

Following US law, both airlines and ticket agents are obliged to refund passengers when an air carrier cancels or makes significant changes to a scheduled flight to, from, and within the US and its passengers do not wish to accept the alternative offered.  

“It is unlawful for an airline to refuse refunds and instead provide vouchers to such consumers,” the DOT concluded.  

 

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