Since the start of the COVID-19 pandemic, airlines have refunded more than $600 million to hundreds of thousands of passengers whose flights were cancelled or changed. This was announced by the Department of Transportation on Monday.
At the same time, federal regulators are cracking down on six airlines that they say broke rules about when refunds should be given. All of this is happening at a time when airlines are having a hard time keeping up with the fast rise in demand for air travel.
Transportation Secretary Pete Buttigieg told reporters on a call that the department is also fining the six airlines $7.25 million for “extreme delays” in giving refunds to passengers.
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This makes the total amount of fines for 2022 $8.1 million which is a record for the department’s programme to protect consumers. Ultra low-cost carrier Frontier Airlines is the only airline in the US that has been fined because of refunds.
Most of the fines are given to airlines with bases in other countries like Air India, TAP Portugal, Aeromexico, El Al and Avianca.
“The department thinks that when Americans buy a plane ticket, they expect to get to their destination safely, reliably, and cheaply. And our job at DOT is to hold airlines accountable for these expectations, many of which are a matter of law and regulation,” Buttigieg said.
US Department of Transportation orders Air India to pay $121.5 million in required refunds to passengers, $1.4 million as penalty for delayed refunds pic.twitter.com/oVZ6mnHILb
— CNBC-TV18 (@CNBCTV18Live) November 15, 2022
The Department of Transportation said last month that of the 7,243 complaints about airlines that they got from customers in August, almost one out of every five was about getting money back.
Blane Workie, assistant general counsel for the DOT’s Office of Aviation Consumer Protection, said that the process for getting airlines to give refunds was different for each airline. He was on the call with Buttigieg.
For example, in March 2020, Frontier changed what it meant by “significant schedule change.”
“In essence, they were retroactively applying a more stringent rule to consumers, and I can certainly say that Frontier would not have provided these refunds to tens of thousands of passengers if DOT had not been involved,” she said.
As part of the process, DOT required Frontier to either give all the affected passengers the refunds they needed or tell them how to get refunds if they needed to fill out forms.
Workie said that other airlines took a long time to give refunds. Workie said that most of the complaints about refunds that the department has gotten have been about foreign airlines.
When asked if this would scare airlines away, Buttigieg said that “the overall goal is to make sure that passengers get their money back.”
US orders Air India to pay $121.5 million as passenger refunds and $1.4 million as fines.#AirIndia is among the six airlines that have agreed to cough up a total of over #USD 600 million as refunds, the US Department of Transportation said on Monday. pic.twitter.com/tFAFE4dNDJ
— Shraddha Research (@shraddhamrkt) November 15, 2022
“It shouldn’t take an enforcement action from the US Department of Transportation to get airlines to pay refunds that they’re required to pay. And so, I have asked the team to undertake an exercise to make sure that the fines are calibrated to deter this in the future and save passengers a lot of time and save everybody a lot,” he said.
Buttigieg later said that the department will keep “ratcheting up the penalty side” until they see less of this kind of behaviour.
Workie says that all refunds have been made or that customers should have been told how to get their money back.
But the fines will be taken care of after Monday when DOT orders are sent out. Buttigieg said that there are more enforcement actions and investigations going on and that “there may be more news about fines to come.”
Workie, on the other hand, said that there are no refund investigations going on against US airlines.
Buttigieg also mentioned the upcoming holiday travel season, saying that it is expected to be “among the busiest” since 2019 in terms of busy travel days.
He also talked about other things the department had done, like making a new dashboard for airline customer service to help people see what they are owed when a flight is cancelled or delayed because of a problem with the airline.
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