The airline has issued more than $600 million in refunds to hundreds of thousands of passengers for canceled or changed flights since its inception. The covid-19 pandemicThe Transport Department announced on Monday.
At the same time, federal regulators are cracking down on a half-dozen airlines for what they say are skirted rules that determine when refunds are issued. All this comes as airlines struggle to keep up with the rapid rise in air travel.
It imposes $7.25 million in fines against six airlines “for inordinate delays in refunding passengers,” Transportation Secretary Pete Buttigieg said in a call with reporters.
That brings the total estimated penalties for 2022 to $8.1 million — a record for civil penalties for the department’s consumer protection program.
Ultra-low-cost carrier Frontier Airlines is the only U.S. airline to face fines related to refunds. Foreign airlines Air India, DAP Portugal, Aeromexico, El Al and Avianca face most of the fines.
“[T]His department’s expectation is that when Americans buy tickets on an airline, we will get to our destination safely, reliably and affordably. “Our job at DOT is to hold airlines accountable to these expectations, many of which are subject to law and regulation,” Buttigieg said.
Last month, the Department of Transport said it received 7,243 consumer complaints about airlines in August. Almost one in five Refunds concerned.
According to Blaine Worki, DOT assistant general counsel for the Office of Aviation Consumer Protection, who spoke on a call with BoutiqueGeek, the process for airlines to issue refunds is as follows:
Frontier, for example, changed its definition of “significant schedule change” in March 2020.
“In essence, they’re retroactively applying a very harsh rule to consumers, and I can say with certainty that if the DOT hadn’t gotten involved, Frontier would not have issued these refunds to tens of thousands of passengers,” he said.
As part of the process, Frontier must notify all those passengers of how to obtain refunds if they require refunds or forms to be filled out.
Other airlines had serious delays in issuing refunds, Worki said.
Worki noted that most of the refund complaints received by the department are against foreign air carriers.
“The overall objective is to make sure passengers get their money back,” Buttigieg said when asked if that would be a deterrent for airlines.
“Airlines should not seek enforcement action from the US Department of Transportation to recover the money they owe. So, I have asked the committee to undertake an exercise to ensure that fines are calibrated to prevent this in future, save passengers time and save a lot for everyone,” he said.
Buttigieg later noted that the department will continue to “raise the penalty side” until they see less of this type of behavior.
According to Worki, all refunds have been made or customers should have been informed of the refund process.
However, the fine will be collected after the DOT order is issued on Monday.
More enforcement actions and investigations are ongoing, Buttigieg said, adding that “more news may come through fines.”
Worki, however, said there are no pending refund investigations against US airlines.
Boutique also noted the upcoming holiday travel season, which is expected to be “one of the busiest” since 2019 in terms of busy travel days.
He said other measures taken by the department include a new airline consumer service dashboard that will help people see what they owe when a flight is canceled or delayed due to a flight problem.