Regulator Accuses Airlines of ‘Extreme’ Delays Refunding Fliers, Fines Six Carriers
The U.S. Department of Transportation is levying penalties against six carriers that it says were prone to “extreme delays” paying refunds they owed to passengers throughout the pandemic.
Five of the carriers which were fined are foreign airlines. Denver, Colorado-based budget carrier Frontier Airlines was ordered to pay $2.2 million—the largest penalty—and was required to repay $222 million, according to the Transportation Department.
In total, the department assessed $7.25 million in penalties against the six carriers, and said its actions helped make sure that those airlines paid more than $600 million in refunds they owed after flights were canceled or significantly delayed. In addition to
Frontier,
the department also fined Air India, TAP Air Portugal,
Aeromexico,
El Al, and Avianca.
Airlines are supposed to offer to refund tickets whenever they cancel a flight or make a significant schedule change, but some were slow to issue the reimbursements, or enacted more stringent policies during the pandemic. The number of consumer complaints about refunds soared.
Frontier, for example, changed its definition of a significant change in March 2020, making it harder for many customers to obtain refunds, according to an order issued by the Transportation Department. Frontier revised the policy again in October 2020, according to the order.
Frontier said in a response that it disagreed with the Department’s view and didn’t believe its actions were unfair or deceptive practices, according to the order.
A Frontier spokeswoman said in a statement that the airline has issued refunds even to customers who voluntarily canceled trips, and applied its more generous definition of a significant delay to customers who booked travel when the stricter policy was in effect.
The other airlines couldn’t be immediately reached for comment.
The Transportation Department has grown more concerned in recent months about flight disruptions and the impact they have on consumers. It has proposed new rules clarifying that travelers can get their money back when flight times change drastically, and requiring airlines to proactively disclose when customers are entitled to reimbursement rather than vouchers.
Officials said Monday that there are no other pending cases relating to refunds against U.S. carriers, though it is continuing to investigate additional foreign airlines.
Air Canada
last year agreed to pay a $4.5 million settlement to resolve claims customers faced prolonged delays getting refunds they were owed.
United Airlines Holdings Inc.
avoided a penalty after it agreed to revert to an earlier, more generous policy about when refunds are owed, and the department dropped formal action.
Transportation Secretary
Pete Buttigieg
said he wants to make sure that penalties are significant enough to serve as a deterrent and has asked his staff to evaluate that. He said: “It shouldn’t take enforcement action from the U.S. Department of Transportation to get the airline to pay the funds that they’re required to pay.”
Write to Alison Sider at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
The U.S. Department of Transportation is levying penalties against six carriers that it says were prone to “extreme delays” paying refunds they owed to passengers throughout the pandemic.
Five of the carriers which were fined are foreign airlines. Denver, Colorado-based budget carrier Frontier Airlines was ordered to pay $2.2 million—the largest penalty—and was required to repay $222 million, according to the Transportation Department.
In total, the department assessed $7.25 million in penalties against the six carriers, and said its actions helped make sure that those airlines paid more than $600 million in refunds they owed after flights were canceled or significantly delayed. In addition to
Frontier,
the department also fined Air India, TAP Air Portugal,
Aeromexico,
El Al, and Avianca.
Airlines are supposed to offer to refund tickets whenever they cancel a flight or make a significant schedule change, but some were slow to issue the reimbursements, or enacted more stringent policies during the pandemic. The number of consumer complaints about refunds soared.
Frontier, for example, changed its definition of a significant change in March 2020, making it harder for many customers to obtain refunds, according to an order issued by the Transportation Department. Frontier revised the policy again in October 2020, according to the order.
Frontier said in a response that it disagreed with the Department’s view and didn’t believe its actions were unfair or deceptive practices, according to the order.
A Frontier spokeswoman said in a statement that the airline has issued refunds even to customers who voluntarily canceled trips, and applied its more generous definition of a significant delay to customers who booked travel when the stricter policy was in effect.
The other airlines couldn’t be immediately reached for comment.
The Transportation Department has grown more concerned in recent months about flight disruptions and the impact they have on consumers. It has proposed new rules clarifying that travelers can get their money back when flight times change drastically, and requiring airlines to proactively disclose when customers are entitled to reimbursement rather than vouchers.
Officials said Monday that there are no other pending cases relating to refunds against U.S. carriers, though it is continuing to investigate additional foreign airlines.
Air Canada
last year agreed to pay a $4.5 million settlement to resolve claims customers faced prolonged delays getting refunds they were owed.
United Airlines Holdings Inc.
avoided a penalty after it agreed to revert to an earlier, more generous policy about when refunds are owed, and the department dropped formal action.
Transportation Secretary
Pete Buttigieg
said he wants to make sure that penalties are significant enough to serve as a deterrent and has asked his staff to evaluate that. He said: “It shouldn’t take enforcement action from the U.S. Department of Transportation to get the airline to pay the funds that they’re required to pay.”
Write to Alison Sider at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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