Department of Transportation: 6 airlines refund $600 million for delayed or canceled flights
Frontier Airlines and five foreign airlines have agreed to reimburse travelers whose trips have been canceled or significantly delayed since the pandemic began, a total of more than $600 million, federal officials said Monday.
The US Department of Transportation said it fined the same airlines more than $7 million for delaying refunds for so long that they violated consumer protection rules.
The biggest US airlines, which have been responsible for the majority of complaints about refunds, avoided fines, and an official said no other US airlines are being investigated for possible fines.
Consumers flooded the agency with thousands of complaints about its inability to get refunds when airlines canceled a large number of flights in early 2020 after the pandemic hit the US. This was by far the leading category of complaints.
“When Americans buy a ticket from an airline, we expect to get to our destination safely, reliably and affordably, and our job at DOT is to hold airlines accountable for those expectations,” said Secretary of Transportation Pete Buttigieg.
The department said Frontier Airlines will refund $222 million and pay a $2.2 million civil penalty.
In a consent order, the government accused Frontier of changing its definition of a significant delay to make refunds less likely and an online system for processing credit notes was down for a period of 15 days in 2020.
Frontier spokeswoman Jennifer de la Cruz said the Denver-based airline issued nearly $100 million in “goodwill refunds,” including to people with non-refundable tickets who canceled themselves and were not entitled under federal law have a refund.
The refunds “demonstrate Frontier’s commitment to treating our customers fairly and flexibly,” de la Cruz said.
The Transport Ministry said TAP Portugal will refund $126.5 million and pay a $1.1 million fine; Air India to Pay $121.5M in Refunds and $1.4M Penalty; Aeromexico pays $13.6 million and $900,000 fine; Israel’s El Al pays $61.9 million and $900,000 penalty; and Avianca of Colombia will pay $76.8 million and a $750,000 fine.
“We have additional enforcement actions and investigations ongoing, and more news of fines may follow,” Buttigieg said during a call with reporters.
However, there will be no fines for other U.S. airlines because “shortly after” the Department of Transportation reminded them of their obligation to provide prompt refunds in April 2020, said Blane Workie, deputy general counsel for the Department of Transportation’s Office of Aviation Consumer Protection.
“We have no pending cases against other US airlines. Our remaining cases are against foreign airlines,” Workie said in the same conversation with Buttigieg.
That didn’t satisfy consumer advocates, who said major US airlines were also breaking rules around refunds — although they were quicker to take corrective action.
“Frontier has been a bad player in all of this and they deserve a fine and we’re glad they’re paying the refunds they should be paying, but we’re very critical of the DOT just not wanting to go after the biggest fish are the ones that cause the most problems,” said Bill McGee of the American Economic Liberties Project, a bipartisan group opposed to concentrated industrial power.
In 2020, United Airlines had filed the most refund-related complaints with the DOT — more than 10,000 — although the smaller Frontier had a higher complaint rate. Next came Air Canada, El Al and TAP Portugal, both above 5,000, followed by American Airlines and Frontier, both above 4,000.
Air Canada last year agreed to pay $4.5 million to resolve similar US allegations of slow refunds and was given a $2.5 million refund credit. The Department of Transportation initially demanded $25.5 million in this case.
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