U.S DOT Cracks Down on Unpaid Refunds: More Than $600m Returned to Passengers

LONDON – On Monday, it was announced that the U.S Department of Transportation has returned more than $600m in refunds and has fined several airlines for lack of payment.

These fines are part of DOT’s ongoing work to ensure Americans receive the refunds they are owed from airlines.

Since the beginning of the COVID-19 pandemic, DOT has received a flood of complaints from air travelers about airlines’ failures to provide timely refunds after they had their flights canceled or significantly changed.

The Penalties…

The fines assessed today (November 14) and the required refunds provided are:

Frontier – $222 million in required refunds paid and a $2.2 million penalty
Air India – $121.5 million in required refunds paid and a $1.4 million penalty
TAP Portugal – $126.5 million in required refunds paid and a $1.1 million penalty
Aeromexico – $13.6 million in required refunds paid and a $900,000 penalty
El Al – $61.9 million in required refunds paid and a $900,000 penalty
Avianca – $76.8 million in required refunds paid and a $750,000 penalty

The penalties handed out equate to around $7.25 million, which again is another substantial figure on its own and does highlight the controversial practices taken out by airlines in the duration of refund payment.

Buttigieg: We Will Hold Airlines Accountable…

Commenting on these fines was 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.”

“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund.”

The DOT also said the following:

“The Department’s efforts have helped lead to hundreds of thousands of passengers being provided with more than half a billion dollars in required refunds.”

“The Department expects to issue additional orders assessing civil penalties for consumer protection violations this calendar year.”

The DOT Are Going Further…

The DOT also announced in the press release that they are going further. They said that they will be taking the following action:

During the summer, the Department rolled out a new airline customer service dashboard to help consumers determine what they are owed when a flight is canceled or delayed because of an airline issue. Previously, none of the 10 largest U.S. airlines guaranteed meals or hotels when a delay or cancellation was within the airlines’ control, and only one offered free rebooking. However, after Secretary Buttigieg called on airlines to improve their service and created this dashboard, nine airlines now guarantee meals and hotels when an airline issue causes a cancellation or delay, and all 10 guarantee free rebooking. The Department will continue to work to increase transparency, so Americans know exactly what the airlines are providing when they have a cancellation or delay.
The Department’s proposed rule on Airline Ticket Refunds, if adopted, would: 1) require airlines to proactively inform passengers that they have a right to receive a refund when a flight is canceled or significantly changed, and 2) define a significant change and cancellation that would entitle a consumer to a refund. The rule would also 3) require airlines to provide non-expiring vouchers or travel credits when people can’t travel because they have COVID-19 or other communicable diseases, and 4) require airlines that receive significant government assistance in the future related to a pandemic to issue refunds instead of non-expiring travel credits or vouchers when passengers are unable or advised not to travel because of a serious communicable disease. The Department invites the public to submit comments on this rulemaking by December 16, 2022. The Department’s Aviation Consumer Protection Advisory Committee will publicly deliberate on the Department’s proposed rule on Airline Ticket Refunds and decide on recommendations to make to the Department at a virtual meeting on December 9, 2022.
The Department has proposed a rule that would significantly strengthen protections for consumers by ensuring that they have access to certain fee information before they purchase their airline tickets. Under the proposed rule, airlines and travel search websites would have to disclose upfront – the first time airfare is displayed – any fees charged to sit with your child, for changing or canceling your flight, and for checked or carry-on baggage. The proposal seeks to provide customers with the information they need to choose the best deal. Otherwise, surprise fees can add up quickly and overcome what may look at first to be a cheap fare. DOT encourages members of the public and interested parties to submit comments by December 19, 2022.

Overall, this highlights the point that the DOT under Buttigieg is going to become more strict on such refund payments, and that is something that consumers will welcome.

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