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Air India told to pay up $121.5 million as refunds to flyers for cancelled flights in USA

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The USA has ordered Air India to pay as much as $121.5 million as refunds to passengers due to the cancellation or change in flights, mostly during the Covid-19 pandemic. The airline has also been asked to cough up another $1.4 million as penalties on the delays in providing refunds.

The development comes as part of the US Department of Transportation’s crackdown on airlines that refuse to give customers refunds for cancelled flights.

Secretary of Transportation Pete Buttigieg on Monday announced that the department is assessing fines totalling $7.5 million against six airlines, and the DOT is ordering those airlines to pay $600 million in refunds to hundreds of thousands of customers.

The other airlines subject to Monday’s enforcement action are:

  • TAP Air Portugal – $126.5 million in required refunds paid and a $1.1 million penalty
  • Aeromexico – $13.6 million in required refunds paid and a $900,000 penalty
  • El Al – $61.9 million in required refunds paid and a $900,000 penalty
  • Avianca – $76.8 million in required refunds paid and a $750,000 penalty

“When a flight gets cancelled, passengers seeking refunds should be paid back promptly,” Buttigieg said. “Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back.”

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

Airlines are required to pay customers refunds when a flight is cancelled for any reason, but often, in an effort to keep the cash, many airlines offer vouchers or credit for future travel instead of a refund.

Airlines’ refusal to give passengers their money back has become a huge source of consumer complaints, especially during the early days of the pandemic when almost no one was flying.