Transportation Dept. Demands 6 Airlines Pay Over $600 Million in Refunds to Passengers

U.S. Secretary of Transportation Pete Buttigieg speaks at the port of Long Beach, Calif., on Jan. 11, 2022. John Fredricks/The Epoch Times

The U.S. Department of Transportation (DOT) on Nov. 14 announced “historic enforcement actions” against six airlines that have collectively been fined more than half a billion dollars for passengers who were owed a refund because of flight cancellations or changes.

Frontier, Aeromexico, Air India, TAP Portugal, El Al, and Avianca were required to pay about $600 million in refunds for flight issues.

DOT is also assessing whether the carriers must also pay a total of $7.25 million in fines for extreme delays in providing refunds.

Specifically, Frontier will pay out $222 million in required refunds and a $2.2 million penalty, Aeromexico will pay $13.6 million in refunds and a $900,000 penalty, Air India $121.5 million in refunds and a $1.4 million penalty, TAP Portugal was ordered to pay $126.5 million in refunds and a $1.1 million penalty, and El Al $61.9 million in refunds and a $900,000 penalty.

Finally, Avianca will pay $76.8 million in refunds and a $750,000 penalty.

In November 2021, Air Canada agreed to a $4.5 million settlement with DOT following claims of extreme delays to thousands of air passengers’ refunds for flights to or from the United States that the carrier canceled or significantly changed.

DOT is headed by Transportation Secretary Pete Buttigieg who said that airline passengers shouldn’t have to wait for extended periods of time to receive their refunds.

A Frontier Airlines plane lands at the Miami International Airport in Miami on June 16, 2021. Joe Raedle/Getty Images

‘Refunds Should Be Paid Back Promptly’

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

The department said it has received a “flood of complaints” from air travelers since the start of the COVID-19 pandemic regarding airlines that have not provided refunds in a timely manner when their flights were either canceled or significantly changed.

In August of this year alone, the latest data available, 1,432 of the 7,243 complaints DOT received concerned refunds, while complaints in general are more than 320 percent above pre-pandemic levels, according to the department.

Under U.S. law, airlines and ticket agents must refund air travelers if the airline cancels or significantly changes a flight to, from, and within the United States, and the passenger does not wish to accept the alternative offered.

Airlines are not allowed to refuse refunds and provide vouchers to those customers instead.

Buttigieg said in July that the Biden administration had completed a string of investigations into several airlines over their alleged failure to issue passenger refunds amid a rise in flight delays and cancellations and chronic labor shortages, but did not identify the airlines at the time.

In August, DOT proposed a new rule aimed at strengthening protection for consumers seeking refunds for airline tickets after their flight is canceled or significantly changed.

People wait in long check-in lines after dozens of flights were listed as canceled or delayed at Seattle-Tacoma International Airport in Seattle on Dec. 27, 2021. Lindsey Wasson/Reuters

More Airline Penalties to Come

At the time, DOT said in a statement that the terms “significant change” and “cancellation” weren’t previously defined, which it said “has resulted in inconsistency among carriers on when passengers are entitled to refunds.”

In response, DOT proposed defining the term “canceled flight” as being a flight that was “published in a carrier’s Computer Reservation System at the time of the ticket sale but was not operated by the carrier.”

Meanwhile, a “significant change” was proposed to mean changes that affect the departure and/or arrival times by three hours or more for a domestic flight or six hours or more for an international flight; the arrival or departure airport; increases in the number of connections in the itinerary; and changes to the type of aircraft flown, provided it causes “a significant downgrade in the air travel experience or amenities available onboard the flight.”

Additionally, the department launched a new interactive customer service dashboard where passengers could compare what they are owed by major airlines when flights are canceled or delayed.

A spokesperson for U.S carrier Frontier Airlines, Jennifer De La Cruz, told USA Today in an emailed statement that the airline has “issued over $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 U.S. law.”

DOT said on Monday that it expects to issue additional civil penalties for consumer protection violations this year.