Air India is among the six airlines that have agreed to cough up a total of over $600 million as refunds, the US Department of Transportation said on Monday.
Air India’s policy of “refund on request" is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight, news agecny PTI has reported citing officials.
The cases in which Air India was asked to pay the refund and agreed to pay the penalty were before the national carrier was acquired by the Tatas.
According to an official investigation, 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.
Air India could not provide the agency with information regarding the time it took to process refunds to passengers who filed complaints and requested refunds directly with the carrier.
“Irrespective of Air India’s stated refund policy, in practice Air India did not provide timely refunds. As a result, consumers experienced significant harm from the extreme delay in receiving their refunds," the US Department of Transportation said.
In addition to Air India, the other airlines that were slapped fines include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca.
The Department of Transportation said Air India was ordered to pay USD 121.5 million in refunds to its passengers and pay USD 1.4 million as fine.
The department said Denver-based Frontier Airlines is refunding $222 million and paying a $2.2 million civil penalty.
TAP Portugal will refund $126.5 million and pay a $1.1 million fine; Air India will pay $121.5 million in refunds and a $1.4 million penalty; Aeromexico will pay $13.6 million and a $900,000 fine; Israel's El Al will pay $61.9 million and a $900,000 penalty; and Colombia's Avianca will pay $76.8 million and a $750,000 fine, the Transportation Department said.
“When Americans buy a ticket on an airline, we expect to get to our destination safely, reliably and affordably, and our job at DOT is to hold airlines accountable for these expectations," Transportation Secretary Pete Buttigieg said.
He further said, “We have more enforcement actions and investigations underway and there may be more news to come by way of fines."
In addition to the more than $600 million as refunds that airlines have paid, the Department of Transportation announced that it is assessing more than $7.25 million in civil penalties against these six airlines for extreme delays in providing refunds.
With Monday's fines, the Department’s Office of Aviation Consumer Protection has assessed USD8.1 million in civil penalties in 2022, the largest amount ever issued in a single year by that office, a media release said.
Under the US 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 US, and the passenger does not wish to accept the alternative offered.
It is unlawful for an airline to refuse refunds and instead provide vouchers to such consumers, the Department of Transportation said.
“When a flight gets cancelled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travellers and get passengers their money back," said US Transportation Secretary Pete Buttigieg.
“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund," he added.
(With inputs from PTI)
