US asks Air India to pay $121.5 million as passenger refunds
WASHINGTON: The US has asked Tata-group owned Air India to pay a whopping $121.5 million as refunds and $1.4 million as penalties for extreme delays in providing refunds to passengers because of cancellation or change in flights, mostly during the covid-19 pandemic, officials said.
Air India is among the six airlines that have agreed to cough up a total of more than $600 million as refunds, the US department of transportation said on Monday.
Air India’s policy of “refund on request” varies from the department of transportation’s policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight, officials said.
The cases in which Air India was asked to pay the refund and agreed to pay the penalty were before the national carrier was acquired by the Tatas.
According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints filed with the department of transportation for flights that the carrier cancelled or significantly changed.
Air India could not provide the agency with information regarding the time it took to process refunds to passengers who filed complaints and requested refunds directly with the carrier.
“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.
Other airlines on which fines were imposed include Frontier,
TAP Portugal, Aero Mexico, EI AI, and Avianca.
Frontier was asked to pay $222 million in refunds and $2.2 million in penalty. TAP Portugal was asked to pay $126.5 million as refund and $1.1 million in penalty. Avianca has been asked to pay $76.8 million in refund and $750,000 in penalty, EI AI $61.9 million in refund and $900,000 as penalty, and Aero Mexico $13.6 million in refund and $900,00 as penalty.
In addition to the more than $600 million as refunds that airlines have paid, the department of transportation announced that it is assessing more than $7.25 million in civil penalties against these six airlines for extreme delays in providing refunds.
With Monday’s fines, the department’s office of aviation consumer protection has assessed $8.1 million in civil penalties in 2022, the largest amount ever issued in a single year by that office, a media release said.
Under US law, airlines and ticket agents have a legal obligation to refund consumers if the airline cancels or significantly changes a flight to, from and within the US, and the passenger does not wish to accept the alternative offered.