The US has ordered Tata-Group-owned Air India to pay $121.5 million in restitution and $1.4 million in fines for severe delays in providing refunds to passengers, mostly due to flight cancellations or changes during the pandemic, officials said.
Air India is one of six airlines that have agreed to pay refunds totaling more than $600 million, the US Department of Transportation said on Monday. Air India's "refund on request" policy is against the transport department's policy, which mandates air carriers to legally refund tickets in case of cancellation or flight change, officials said. There were instances where Air India was asked to pay a refund and agreed to pay a penalty before the Tatas took over the national carrier.
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 transport department for flights canceled or significantly changed by the carrier. Air India could not provide the agency with information on the time taken 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 has not provided timely refunds. As a result, consumers have suffered significant losses due to severe delays in receiving their refunds,” the US Department of Transportation said. Besides Air India, other airlines that have been fined include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. Air India has been ordered to pay $121.5 million in refunds to its passengers and $1.4 million in fines, the transport department said.
Frontier was ordered to pay $222 million in restitution and a $2.2 million penalty. TAP Portugal will pay $126.5 million in restitution and $1.1 million in penalties; Avianca ($76.8 million in refunds and $750,000 in penalties), EI AI ($61.9 million in refunds and $900,000 in penalties) and Aero Mexico ($13.6 million in refunds and $900,000 in penalties) in addition to more than $60 million in refunds, said the six airlines, all for long delays in providing refunds. The Department of Transportation announced that it is assessing more than $7.25 million in civil penalties against the airlines.
With Monday's fines, the Department of Aviation Consumer Protection has assessed $8.1 million in civil penalties in 2022, the largest amount issued by the office in a single year, according to a media release. Under US law, airlines and ticket agents have a legal obligation to reimburse customers if the airline cancels or significantly changes a flight to and from the US and is unwilling to accept an alternative offered by the passenger. The Department of Transport said it was illegal for an airline to refuse refunds and instead offer vouchers to such customers.
“When a flight is canceled, passengers seeking a refund must be reimbursed immediately. When that doesn't happen, we will take action on behalf of American passengers to hold airlines accountable and recover passengers' money," said US Transportation Secretary Pete Buttigieg.
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