Since the start of the Covid-19 outbreak, airlines have paid out more than $600 million in refunds to hundreds of thousands of passengers for cancelled or cancelled flights, according to the Department of Transportation.
Simultaneously, federal officials are cracking down on a half-dozen airlines they claim violated regulations governing when reimbursements are provided. This comes as airlines struggle to keep up with a fast increase in air travel demand.
The department is also fining the six airlines $7.25 million for “excessive delays in giving those reimbursements to passengers,” Transportation Secretary Pete Buttigieg said on a conference call with reporters.
This increases the total assessed penalty for 2022 to $8.1 million, a new high for the department’s consumer protection programme in terms of civil penalties.
Low-cost transport Frontier Airlines is the only US carrier facing reimbursement penalty. The majority of fines are levied against foreign-based carriers, including Air India, TAP Portugal, Aeromexico, El Al, and Avianca.
According to the Department of Transportation, over one-fifth of the 7,243 consumer complaints filed concerning airlines in August concerning refunds.
According to Blane Workie, DOT associate general counsel for the Office of Aviation Consumer Protection, who talked on the call with Buttigieg, the procedure of obtaining airlines to offer refunds differed by the carrier.
In March 2020, Frontier, for example, modified its definition of “major schedule modification.”
“In essence, they were retroactively applying a more rigorous rule to customers, and I can certainly tell that if DOT had not gotten involved, Frontier would not have offered these refunds to tens of thousands of passengers,” she added.
As part of the procedure, DOT mandated Frontier to provide the required refunds or advise all passengers on how to seek refunds if forms were required. Workie stated that other airlines experienced substantial delays in delivering refunds.
The department has received the majority of refund complaints from international airlines, according to Workie. When asked if this would be a barrier to airlines, Buttigieg stated that the “ultimate goal is to ensure passengers receive their money back.”
“It should not take an enforcement action from the US Department of Transportation to persuade airlines to pay needed refunds.” As a result, I’ve instructed the team to conduct an exercise to ensure that the fines are calibrated to dissuade this in the future, saving passengers a lot of time and saving everyone a lot,” he said.
Buttigieg later stated that the department will continue “ratcheting up the penalty side” until this type of behaviour is reduced.
According to Workie, all reimbursements have been made or clients should have been informed of the refund process.
The fines, however, will be collected after the DOT directives are issued on Monday. According to Buttigieg, there are more enforcement actions and investigations underway, and “there may be more news to come in terms of fines.”
Workie, on the other hand, stated that there are no pending refund investigations against US airlines. Buttigieg also mentioned the impending holiday travel season, claiming that it will be “among the busiest” in terms of busy travel days since 2019.
He praised the department’s other initiatives, such as a new airline consumer service dashboard that allows passengers to know what they are owed when a flight is cancelled or delayed due to an airline issue.