Six flights including Air India directed by US to pay millions in passenger refunds

The U.S. Transportation Department has said on Monday that six airlines, including Air India, have been slapped with $7.25 million in penalties and have agreed to issue $622 million in passenger refunds as the agency enforces consumer protections aggressively.

“The actions helped ensure the carriers paid required refunds to hundreds of thousands of passengers who had their flights cancelled or significantly changed,” Transportation Secretary Pete Buttigieg told reporters. “It shouldn’t take enforcement action from (USDOT) to get airlines to pay the funds that they’re required to pay.”

Air India ordered to pay $121.5 million in passenger refunds

Tata group owned Air India airline has been ordered by US authorities to pay $121.5 million as refunds and $1.4 million as penalties due to extreme delays in providing refunds to scores of passengers on grounds of cancellation or change in flights, mostly during the Covid-19 pandemic.

However, “Air India’s policy of ‘refund on request’ is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight,” officials said.

According to an official investigation, “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 the carrier cancelled or significantly changed.”

“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 said.

Apart from Air India, other airlines who have been slapped with penalties include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. Frontier was ordered to pay $222 million in refunds and $2.2 million in penalty. TAP Portugal will pay $126.5 million as refund and $1.1 million in penalty; Avianca ($76.8 million in refund and $750,000 in penalty), EI AI ($61.9 million in refund and $900,000 as penalty) and Aero Mexico ($13.6 million in refund and $900,00 as penalty).