These Airlines Were Just Ordered to Pay Over $600 Million in Refunds to Passengers
The U.S. Department of Transportation continues to crack down on carriers and is issuing millions in fines over compensation owed for canceled and significantly altered flights.
The U.S. Department of Transportation (DOT) on Monday announced that six airlines are required to pay $622.3 million to passengers to whom they owed a refund because their flight was either canceled or significantly changed.
“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund,” stated U.S. Transportation Secretary Pete Buttigieg. “When a flight gets canceled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back.”
The enforcement action comes as the DOT has been inundated with consumer complaints regarding air travel amid a surge in canceled and delayed flights this year due to an airline industry that remains short-staffed and has struggled to keep up with the return in air travel demand following the pandemic slowdown.
At the end of October, the DOT reported that it received 7,243 consumer complaints in the month of August, up 323 percent from the number of complaints received in August 2019. Of those, one-third of the complaints were specifically concerning delays, cancellations, and flight schedule issues.
During the pandemic, as airlines and their customers faced an avalanche of canceled flights due to border closures and public health measures, carriers were keen to issue future flight credits in lieu of cash refunds given how much money they were hemorrhaging—and in many cases because the circumstances of a global pandemic were deemed beyond their control, they were within their rights to issue credits versus refunds.
But as many pandemic precautions faded away in 2022 and international air travel became more feasible, many of the delays and canceled flights experienced this year were company-derived issues caused by staffing shortages and other operational challenges—not pandemic ones. And a refund is required by U.S. law when a traveler chooses not to fly because an airline cancels, delays, or significantly alters a flight due to an issue originating with the airline, such as overbooking a flight or not having adequate staffing to fly a sold flight (weather woes don’t count as they’re deemed beyond the airline’s control). The DOT states that it “is unlawful for an airline to refuse refunds and instead provide vouchers to such consumers.”
Now, the DOT is cracking down on that commitment.
In addition to the required refunds the DOT is ensuring that customers receive, the government agency also announced Monday that it is assessing more than $7.25 million in fines against six airlines due to extreme delays in providing refunds.
These are the airlines being fined and how much they have been required to pay in refunds:
- Frontier: $222 million in required refunds paid; $2.2 million penalty
- Air India: $121.5 million in required refunds paid; $1.4 million penalty
- TAP Portugal: $126.5 million in required refunds paid; $1.1 million penalty
- Aeromexico: $13.6 million in required refunds paid; $900,000 penalty
- El Al: $61.9 million in required refunds paid; $900,000 penalty
- Avianca: $76.8 million in required refunds paid; $750,000 penalty
The good news for consumers is that hundreds of thousands of passengers have received refunds since the DOT stepped up its enforcement efforts, according to the agency. And the DOT reports that it plans to issue more fines this year to airlines that violate consumer protection laws.
In August, DOT proposed new rules for airlines that could notably enhance the rights of fliers, and the public has until December 16 to weigh in on the proposal to help bring about the changes.
The proposal has four key objectives:
- It would require airlines to provide refunds if the departure or arrival time changes by three or more hours for a domestic flight, or six or more hours for an international flight.
- It would require airlines to provide refunds when the airline changes the passenger’s departure or arrival airport or adds stops to an itinerary.
- It would require airlines to provide refunds when the airlines cause “a significant downgrade” in the travel experience by switching to a different type of plane.
- It would require airlines to provide future travel credits that don’t expire when passengers can’t travel for health and safety reasons during a pandemic or because borders are closed.
The rules would also apply to tickets that are typically nonrefundable, such as lower-priced basic economy fares.
If enacted, the new regulations “would be the largest boost to traveler protections in years,” said Scott Keyes, founder of flight deal tracking service Scott’s Cheap Flights.
Public comments can be made through this online form.
The DOT has also launched a new consumer website that gives travelers detailed information on what they’re owed for flight cancellations and delays. The dashboard compares all the major domestic airlines’ policies on issues such as whether the carrier offers meals for delays of more than three hours or will rebook passengers’ flights at no additional charge.