According to officials, the US has ordered Tata-owned Air India to pay a whopping $121.5 million in refunds and $1.4 million in penalties for extreme delays in providing refunds to passengers due to flight cancellations or changes, mostly during the pandemic.
The US Department of Transportation announced on Monday that Air India is one of six airlines that have agreed to pay a total of $600 million in refunds.
Air India’s “refund on request” policy contradicts Department of Transportation policy, which requires airlines to legally refund tickets in the event of a flight cancellation or change, according to officials.
The cases in which Air India was asked to pay the refund and agreed to pay the penalty occurred prior to the Tatas’ acquisition of the national carrier.
An official investigation found that Air India took more than 100 days to process more than half of the 1,900 refund complaints filed with the Department of Transportation for flights that were cancelled or significantly changed.
Air India was unable to provide information to the agency regarding the time it took to process refunds for passengers who filed complaints and requested refunds directly with the carrier.
“Irrespective of Air India’s stated refund policy, in practice Air India did not provide timely refunds. As a result, consumers experienced significant harm from the extreme delay in receiving their refunds,” the US Department of Transportation stated.
In addition to Air India, the following airlines were fined: Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca.
According to the Department of Transportation, Air India was ordered to refund $121.5 million to passengers and pay a $1.4 million fine.
Frontier was ordered to pay $222 million in refunds and a penalty of $2.2 million. TAP Portugal will pay a refund of $126.5 million and a penalty of $1.1 million, while Avianca will pay a refund of $76.2 million and a penalty of $750,000, EI AI will pay a refund of $61.9 million and a penalty of $900,000, and Aero Mexico will pay a refund of $13.6 million and a penalty of $900,000.
In addition to the more than $600 million in refunds paid by the airlines, the Department of Transportation announced that it is assessing civil penalties totaling more than $7.25 million against these six airlines for extreme delays in providing refunds.
The Department’s Office of Aviation Consumer Protection has assessed $8.1 million in civil penalties in 2022, the most ever issued in a single year by that office, according to a media release.
Under US law, airlines and ticket agents are required to refund customers if an airline cancels or significantly changes a flight to, from, or within the US and the passenger declines the alternative offered.
According to the Department of Transportation, it is illegal for an airline to refuse refunds and instead provide vouchers to such customers.
“When a flight gets cancelled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travellers and get passengers their money back.” said US Transportation Secretary Pete Buttigieg.
“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund,” he stated.