Politico

DOT fines 6 airlines over refunds, ahead of another busy travel holiday

The agency headed by Pete Buttigieg announced Monday that it plans to fine six mostly foreign airlines for violating rules intended to protect passengers facing canceled flights and require millions to be paid in refunds — the latest push by the Biden administration to make flying more palatable ahead of the busy holiday season after a summer of woes.

The Transportation Department fined the six airlines a total of $7.25 million, along with more than $600 million in refunds.

Though most of the airlines facing penalties are foreign, Denver-based Frontier Airlines is facing the single largest fine at $2.2 million. The other five airlines — Air India, TAP Portugal, Aeromexico, El Al and Avianca — face fines between $750,000 and $1.4 million.

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

Under federal law, airline passengers are already entitled to refunds rather than credits for future travel if a flight is canceled or significantly delayed, or if the passenger chooses not to travel in either of these cases. But if a passenger cancels their travel on their own volition, airlines typically issue vouchers, but can give cash back at their discretion.

Background: In August, DOT announced a proposed rule that would strengthen protections for airline passengers seeking a refund after their flight is canceled by putting a clearer framework around what refunds are allowed, and under what circumstances.

Airlines for America and the International Air Transportation Association, trade associations that represent commercial airlines in the U.S. and abroad, have not taken an explicit position on the rule; so far their only filing has been to ask for 60 more days to file a public comment.

DOT is also considering new rules for passengers to be reimbursed for flights missed due to sickness and weighing additional passenger protection rules, including a new rule intended to help passengers know the true price of a ticket, including add-on fees, at the time of booking. The proposed rules would require airlines to issue non-expiring travel credits or vouchers when someone can’t travel due to Covid-19 or another communicable disease and require airlines that receive federal help during a future pandemic to issue refunds instead of travel credits.

What’s next: DOT said an advisory committee will deliberate on the airline ticket refund rule on Dec. 9 and send a list of recommendations to the department. The ticket price rule is open for public comments until Dec. 19.

While Monday’s announcement of fines only included one U.S.-based airline, DOT said they expect to issue additional civil penalties for consumer protection violations by the end of the year.

Oriana Pawlyk contributed to this report.

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