Dept. of Transportation: 6 airlines will refund $600 million for flights delayed or canceled


Frontier Airlines and five foreign carriers have agreed to refund greater than $600 million combined to travelers whose trips were canceled or significantly delayed because the start of the pandemic, federal officials said Monday.

The U.S. Department of Transportation said it also fined the identical airlines greater than $7 million for delaying refunds so long that they violated consumer-protection rules.

The most important U.S. airlines, which accounted for the majority of complaints about refunds, avoided fines, and an official said no other U.S. carriers are being investigated for potential fines.

Consumers flooded the agency with hundreds of complaints about their inability to get refunds when the airlines canceled huge numbers of flights after the pandemic hit the U.S. in early 2020. It was by far the leading category of complaints.

“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 carry airlines accountable for these expectations,” Transportation Secretary Pete Buttigieg said.

The department said Frontier Airlines is refunding $222 million and paying a $2.2 million civil penalty.

In a consent order, the federal government charged that Frontier modified its definition of a big delay to make refunds less likely, and a web-based system to process credits went down for a 15-day period in 2020.

Frontier spokeswoman Jennifer de la Cruz said the Denver-based airline issued nearly $100 million in “goodwill refunds,” including to individuals with non-refundable tickets who canceled on their very own and weren’t entitled to a refund under federal law.

The refunds “exhibit Frontier’s commitment to treating our customers with fairness and adaptability,” de la Cruz said.

The Transportation Department said TAP Portugal will refund $126.5 million and pay a $1.1 million positive; Air India pays $121.5 million in refunds and a $1.4 million penalty; Aeromexico pays $13.6 million and a $900,000 positive; Israel’s El Al pays $61.9 million and a $900,000 penalty; and Colombia’s Avianca pays $76.8 million and a $750,000 positive.

“Now we have more enforcement actions and investigations underway and there could also be more news to return by the use of fines,” Buttigieg said during a call with reporters.

Nevertheless, there will likely be no fines for other U.S. airlines because they responded “shortly after” the Transportation Department reminded them in April 2020 of their obligation to offer quick refunds, said Blane Workie, the assistant general counsel for the Transportation Department’s Office of Aviation Consumer Protection.

“We shouldn’t have any pending cases against other U.S. carriers. Our remaining cases are against foreign air carriers,” Workie said on the identical call with Buttigieg.

That didn’t satisfy consumer advocates, who said that the key U.S. airlines also violated rules around refunds — even in the event that they took corrective steps more quickly.

“Frontier was a nasty player in all this, they usually need to be fined, and we’re glad they’re paying the refunds they were alleged to pay, but we’re very critical of how the DOT just seems to not wish to go after the largest fish, those causing probably the most problems,” said Bill McGee of the American Economic Liberties Project, a non-partisan group that opposes concentrated industrial power.

In 2020, United Airlines had probably the most refund-related complaints filed with DOT — greater than 10,000 — although smaller Frontier had the next rate of complaints. Air Canada, El Al and TAP Portugal were next, each over 5,000, followed by American Airlines and Frontier, each topping 4,000.

Air Canada agreed last 12 months to pay $4.5 million to settle similar U.S. allegations of slow refunds and was given credit of $2.5 million for refunds. The Transportation Department initially sought $25.5 million in that case.

Enroll for the Fortune Features email list so that you don’t miss our biggest features, exclusive interviews, and investigations.

Source link


Please enter your comment!
Please enter your name here