US orders Air India to pay $121.5 mn refund to passengers, $1.4 mn as fine

New Delhi: The US has ordered that Tata Group-owned Air India pay a staggering $121.5 million in refunds and $1.4 million in fines for significant delays in giving passengers their money back after flights were cancelled or changed, largely during the pandemic, according to officials.

According to the US Department of Transportation, Air India is one of the six airlines that have agreed to pay back a total of more than $600 million.

Officials stated that the Department of Transportation guideline, which requires airlines to legally return tickets in the event of flight cancellation or change, conflicts with Air India’s “refund on request” policy.

An official examination revealed that Air India processed more than half of the 1,900 refund complaints submitted to the Department of Transportation for flights that the carrier cancelled or materially modified in more than 100 days.

Information on how long it took Air India to handle refund requests made directly by passengers who filed complaints and asked for refunds was not available to the agency.

“Irrespective of Air India’s stated refund policy, in practice Air India did not provide timely refunds. As a result, consumers experienced significant harm from the extreme delay in receiving their refunds,” the US Department of Transportation said.

The other airlines that received fines in addition to Air India are Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. According to the Department of Transportation, Air India was told to return $121.5 million to its customers and pay a fine of $1.4 million.

A $222 million refund and a $2.2 million fine were imposed on Frontier. TAP Portugal will pay $126.5 million as a refund and $1.1 million in fines; Avianca will pay $76.6 million as a refund and $750,000 in fines; EI AI will pay $61.9 million as a refund and $900,000 in fines; and Aero Mexico will pay $13.6 million as a refund and $900,00 as fines.

The Department of Transportation said that it is imposing civil penalties totaling more than $7.25 million against these six airlines for their severe refund delivery delays, in addition to the more than $600 million in reimbursements that the airlines have already paid.

The Office of Aviation Consumer Protection of the Department has now assessed USD8.1 million in civil penalties in 2022, the highest amount ever issued in a single year by that office, according to a media statement.

If an airline cancels or drastically alters a flight to, from, or within the US and the passenger does not want to accept the provided alternative, the airline and ticket agents are legally required to refund the customer.

The Department of Transportation stated that giving such customers vouchers instead of refunds is against the law.

“When a flight gets cancelled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travellers and get passengers their money back.” said US Transportation Secretary Pete Buttigieg.

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


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