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US imposes $1.4 million penalty on Air India over delay in refunds
- Air India is among the six airlines that have agreed to return a total of over $600 million as refunds
- According to US law, it is unlawful for an airline to refuse refunds
- Other airlines that faced penalties include Frontier, TAP Portugal, Aero Mexico, El Al, and Avianca
The United States government has fined Air India $1.4 million for extreme delays in refunding passengers $121.5 million for flights canceled or changed significantly. Air India is among the six airlines that have agreed to return a total of over $600 million as refunds to affected passengers, the US Department of Transportation said.
“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund,” said Transportation Secretary Pete Buttigieg.
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If passengers don’t get a refund promptly for canceled flights, “we will act to hold airlines accountable on behalf of American travelers and get passengers their money back,” he warned.
According to 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.
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Under US rules, it is unlawful for an airline to refuse refunds and instead provide vouchers to such customers.
Air India’s policy of “refund on request” is contrary to the Department of Transportation policy, the officials said.
The cases in which the national carrier was directed to pay the refund and agreed to pay the penalty were before the airline was acquired by the Tata Group.
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“Air India confirms that it has received a fine pertaining to delayed refunds, which mostly pertain to the pandemic period during which Air India was a publicly-owned entity,” the airline said in a statement.
“We very much regret that customers were inconvenienced and accept the fine,” it added.
According to an official probe, 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 airline canceled or significantly changed.
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“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.
In addition to Air India, the other airlines that faced penalties include Frontier, TAP Portugal, Aero Mexico, El Al, and Avianca.
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The Department said Frontier was directed to pay $222 million in refunds and $2.2 million in penalty. TAP Portugal was ordered to pay $126.5 million as a refund and $1.1 million in a penalty, Avianca ($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 $90,000 as penalty).
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