US Orders Air India To Pay $121.5 Million In Passenger Refunds And $1.4 Million In Fines
November 16, 2022: According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints the carrier filed with the Department of Transportation for canceled or significantly altered flights.
The US has ordered Tata-Group-owned Air India to pay $121.5 million in refunds and $1.4 million in penalties for long delays in refunding passengers, mostly due to flight cancellations or changes during the pandemic, officials said.
Air India is among six airlines that have agreed to pay a total of more than $600 million in refunds, the US Department of Transportation said on Monday.
Air India’s “refund on request” policy is against the Department of Transportation policy, which mandates air carriers to legally refund tickets in case of flight cancellations or changes, officials said.
The cases in which Air India was asked to pay refunds and agreed to pay penalties were prior to Tata’s acquisition of the national carrier.
According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints the carrier filed with the Department of Transportation for canceled or significantly altered flights.
Air India could not provide the agency with information on the time it took to process refunds for passengers who complained and requested refunds directly with the carrier.
“Regardless of Air India’s refund policy, in practice Air India did not provide refunds in a timely manner.
As a result, customers were significantly harmed by the extreme delay in receiving their refunds,” the US Department of Transportation said. Besides Air India, other airlines that have been fined include Frontier, TAP Portugal, Aero Mexico, EI AI and Avianca.
Air India was ordered to pay $121.5 million in refunds to its passengers and $1.4 million in fines, the transport department said.
Frontier was ordered to pay $222 million in refunds and $2.2 million in penalties. TAP Portugal will pay $126.5 million in refunds and $1.1 million in fines; Avianca ($76.8 million in refunds and $750,000 in penalties), EI AI ($61.9 million in refunds and $900,000 in penalties) and Aero Mexico ($13.6 million in refunds and $900,00 in penalties).
In addition to the more than $600 million in refunds paid by the airlines, the Department of Transportation announced that it is assessing more than $7.25 million in civil penalties against the six airlines for delays in issuing refunds.
With Monday’s fine, the Department of Aviation Consumer Protection Office has assessed $8.1 million in civil penalties in 2022, the largest amount ever issued by that office in a single year, according to a media release.
Under US law, airlines and ticket agents have a legal obligation to refund customers if the airline cancels or significantly changes a flight to and from the US and the passenger does not want to accept the alternative offered.
The Department of Transportation said it was illegal for an airline to refuse refunds and instead issue vouchers to such customers.
U.S. Transportation Secretary Pete Buttigieg said, “When a flight is canceled, passengers seeking refunds should be paid immediately.
Whenever that doesn’t happen, we will take action on behalf of American travelers to hold airlines accountable and get passengers their money back.” ” said US Transportation Secretary Pete Buttigieg.
“Flight cancellations are frustrating enough, and you shouldn’t have to wait haggle or months to get your refund,” he said.
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