U.S. DoT orders $600 million in airline refunds to passengers

Airlines were also fined a collective $7.5 million for “extreme delays” in issuing COVID-related refunds in one of the biggest enforcement actions to date.

In a historic enforcement action, the U.S. Department of Transportation (DOT) announced on Monday that it has fined six airlines a collective $7.5 million for canceling or significantly delaying flights and not refunding travelers’ money in a timely manner during the air travel upheaval caused by the pandemic.

In addition to the government fines, the six airlines were forced to refund $600 million to hundreds of thousands of U.S. passengers who had their flights significantly changed or canceled since the onset of the pandemic.

“When Americans buy a ticket on an airline, we expect to get to our destination safely, reliably, and affordably,” Secretary of Transportation Pete Buttigieg said Monday on a media conference call. “Our job at DOT is to hold airlines accountable for these expectations—many of which are a matter of law and regulation.”

The flight disruptions in question spanned from March 2020 to earlier this year, when many airlines were selling tickets for spring and summer flights they couldn’t operate due to staffing issues and other operational snares, leading to cancellations and delays en masse. During that time frame, the DOT was flooded with record-breaking levels of consumer complaints and publicly warned airlines several times that refunds needed to be issued.

In one particularly notable example, Frontier Airlines suddenly changed its definition of a “significant schedule change” in March 2020, according to DOT officials. Previously, flight changes of three hours qualified for a refund. In the new definition, flights that left anytime within the same calendar day as the original departure time weren’t considered significantly delayed. The airline then retroactively applied its new policy to previous flights to deny passengers refunds they were rightfully owed.

As part of Monday’s enforcement action, Frontier was required to pay $222 million in passenger refunds, and a $2.2 million penalty to the federal government. “I can certainly tell you that Frontier would not have provided these refunds to tens of thousands of passengers if DOT had not been involved,” Blane Workie, assistant general counsel for the Office of Aviation Consumer Protection, said on the conference call.

Among the other five airlines that were fined for the “extreme delays” in issuing consumer refunds are: Air India, which was required to pay $121.5 million in refunds and a $1.4 million government penalty; TAP Air Portugal, which paid out $126.5 million in refunds and a $1.1 million penalty; Aeromexico, which paid passengers $13.6 million in required refunds paid and a $900,000 penalty; El Al, which issued fliers $61.9 million in refunds and paid a $900,000 penalty; and Avianca, which paid $76.8 million in refunds and a a $750,000 government penalty.

With the $7.5 million in penalties, 2022 has reached “the most fines ordered in any given year under [the DOT] consumer protection program,” Buttigieg said, noting that additional international airlines are under investigation for how they’ve handled refunds for flights operating to and from the U.S., and more fines could be levied in the near future. The department is “using the enforcement process and the fines as tools to make sure passengers actually get their refunds,” according to Buttigieg. “The record-level fines assessed is important—not as important to me as the hundreds of millions of dollars in refunds going back to hundreds of thousands of passengers because of this action,” Buttigieg said.

All passengers who are owed a portion of the more than half billion in refunds have already received their money back or should have been contacted by their airline with steps on how to claim their money, according to the DOT.

In addition to forcing airlines to pay the refunds, Buttigieg has also proposed rules that would close loopholes like the schedule-change one Frontier tried to use. Over the summer, Buttigieg proposed a new federal regulation that would force airlines to refund passengers when:

• The airline makes changes to the flight that affect the departure and/or arrival times by; three hours or more for domestic flights, six hours or more for international flights
• The airline changes the arrival or departure airport, or increases the number of connections in the flight itinerary
• The airline changes the type of aircraft, if it causes a significant downgrade for the customer

The proposal also broadly defines a refundable flight cancellation as “a flight that was published in a carrier’s Computer Reservation System at the time of the ticket sale but was not operated by the carrier.” Additionally, air carriers would need to proactively inform passengers when they’re owed a refund. Such specific definitions are a win for travelers, who may struggle to interpret each airline’s different policy.

“This really shouldn’t be happening in the first place,” Buttigieg said of the withheld passenger refunds. “It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay.”

If passengers think an airline still owes them a refund for a disrupted flight, officials say they should file a consumer complaint form on the DOT’s site and that regulators will follow up. The department also recently launched an online dashboard tool to show fliers what other compensation they’re owed—like hotel stays, meal vouchers, and free rebooking—when their flights change.

Being armed with this type of specific information will be crucial during the upcoming holiday travel season, which Buttigieg predicted will be among the busiest since 2019. “The bottomline is that as people get ready to fly this holiday season, I want passengers to know that the U.S. DOT has their back,” he said, “of course when it comes to safety, but also when it comes to meeting these important customer service standards.” apple.news