US fines airlines $7.5 million and must reimburse customers for canceled flights


Transportation Secretary Pete Buttigieg announced Monday that the department is assessing fines totaling $7.5 million against six airlines and ordering them to pay refunds to hundreds of thousands of customers.

Patrick Semansky/AP


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Patrick Semansky/AP


Transportation Secretary Pete Buttigieg announced Monday that the department is assessing fines totaling $7.5 million against six airlines and ordering them to pay refunds to hundreds of thousands of customers.

Patrick Semansky/AP

The Department of Transportation is cracking down on airlines that refuse to give customers refunds for canceled flights.

Transportation Secretary Pete Buttigieg announced Monday that the department is assessing penalties totaling $7.5 million against six airlines, and DOT is ordering those airlines to pay $600 million in refunds to hundreds of thousands of customers who were I had denied them.

“When a flight is cancelled, passengers seeking refunds should be paid immediately,” Buttigieg said. “As long as that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get money back from passengers.”

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

Airlines are required to pay refunds to customers when a flight is canceled for any reason, but often, in an effort to conserve cash, many airlines offer coupons or credit toward future travel in lieu of a refund.

The refusal of airlines to refund passengers’ money has become a major source of consumer complaints, especially during the early days of the pandemic, when hardly anyone was flying.

Bill McGee, an aviation consumer advocate with the American Economic Liberties Project, cites data from the Bureau of Transportation Statistics showing that complaints filed against airlines for refusing to provide refunds skyrocketed in 2020 to more than 89,000, 57 times more than the 1500 of 2019. .

“It’s really unprecedented,” says McGee. “We’ve never seen anything like it.”

Buttigieg says DOT will make sure refunds are available and processed promptly.

One big problem was that prospective travelers often canceled their plans due to the pandemic and significant travel restrictions in place, but the airline didn’t cancel the flight until the last minute. In those cases, airlines were generally not required to offer refunds, but many offered coupons or credit toward future travel instead. But those coupons and credits often expired before some people could travel again or felt comfortable traveling.

And delays, cancellations and significant changes to flight schedules have become a major problem this year, as airlines initially scheduled more flights than they had the staff to operate.

Buttigieg says airline operations have improved in recent months after a horrendous summer of flight disruptions.

“But still, the flights are cancelled. And when that happens, DOT will be here to make sure a refund is available and processed as quickly as possible, that we’re going to have people’s backs when they experience an outage, Buttigieg told reporters at a news conference. via Zoom on Monday.

But consumer advocate Bill McGee isn’t so sure. While he says these enforcement actions are a small step in the right direction, “it really is too little too late. The fact is that the biggest offenders here don’t seem to be addressed.”

He notes that only one relatively small US airline, Frontier, is being sanctioned, along with five foreign airlines (six if you include Air Canada, which was fined by DOT last year). And he agrees that Frontier “is one of the worst offenders.”

“Why have none of these other airlines been fined?”

But it says consumers have filed thousands of complaints against United, Delta, American and other airlines for their refusal to provide refunds.

“Why have none of these other airlines been fined?” McGee asks. “And why is it taking so long… why is it taking (almost) three years to investigate this, especially since all the data is public?”

“Airlines that blatantly evade the rules deserve to be fined, but this latest round of USDOT enforcement comes almost three years too late and leaves out the most egregious American violators,” says McGee.

The airlines facing fines include just one US-based carrier, Frontier, which was forced to pay $222 million in refunds and a $2.2 million fine. But in a statement, Frontier says it will pay just $1 million out of pocket, having received a $1.2 million goodwill refund credit.

The other airlines subject to Monday’s enforcement action are:

  • air india – $121.5 million in required refunds paid and a $1.4 million penalty
    • TAP Air Portugal
    – $126.5 million in required refunds paid and a $1.1 million penalty
    • Aeromexico
    – $13.6 million in required refunds paid and a $900,000 penalty
    • El Al
    – $61.9 million in required refunds paid and a $900,000 penalty
    • Avianca
    – $76.8 million in required refunds paid and a $750,000 penalty

All consent orders are available at www.regulations.gov, file number DOT-OST-2022-
0001.

The department has also proposed stricter rules on refunds to airline customers.

According to the DOT, consumers can file air travel consumer complaints online or by voice mail at (202) 366-2220.

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