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

The Department of Transport is cracking down on airlines that refuse to reimburse customers for canceled flights.

Transportation Secretary Pete Buttigieg announced on Monday that the department is imposing fines totaling $7.5 million on six airlines, and the DOT is ordering those airlines to reimburse hundreds of thousands of customers for $600 million. which had been denied to them.

“When a flight is cancelled, passengers requesting a refund must be reimbursed promptly,” Buttigieg said. “Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get their money back for passengers.”

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

Airlines are required to reimburse customers when a flight is canceled for any reason, but often in an effort to conserve money, many airlines offer vouchers or credits for future travel instead of reimbursement.

Airlines’ refusal to return passengers’ money became a huge source of consumer complaints, especially at the start of the pandemic, when almost no one 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 soared in 2020 to more than 89,000, compared to 57 times around 1,500 in 2019. .

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

Buttigieg says DOT will make sure refunds are available and processed quickly

A big problem was that would-be travelers often canceled their plans due to the pandemic and extensive travel restrictions in place, but the airline only canceled the flight at the last minute. In these cases, airlines were generally not required to offer refunds, but instead many offered vouchers or credits for future travel. But those vouchers and credits often expired before some people could or felt comfortable traveling again.

And delays, cancellations and major changes to flight schedules have become a significant 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 horrific summer of flight disruptions.

“But still, flights get canceled. And when that happens, DOT will be there to make sure a refund is available and processed as quickly as possible, that we’re going to have people’s backs when they’re having a disruption,” Buttigieg told reporters during a Zoom press conference 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’s really too little too late. The thing is, the biggest offenders here don’t seem to be dealt with.”

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

“Why haven’t any of these other airlines been fined?”

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

“Why haven’t any of these other airlines been fined?” asks McGee. “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 brazenly circumvent the rules deserve a fine, but this latest round of USDOT enforcement comes almost three years too late and leaves out the most egregious U.S. violators,” McGee said.

Airlines facing fines include a single 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 only pay $1 million out of pocket, after receiving a goodwill refund credit of $1.2 million.

The other airlines targeted by Monday’s enforcement action are:

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

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

The ministry has also proposed tougher rules on refunds for airline customers.

According to the DOT, consumers can file air travel consumer complaints online http://airconsumer.dot.gov/escomplaint/ConsumerForm.cfm or by voice mail at (202)-366-2220.