DOT orders airlines to pay $600 million in refunds to customers for canceled flights

LINCOLN, Neb. (KLKN) – On Monday, the U.S. Department of Transportation announced that it ordered six airlines to pay $600 million to thousands of customers who had been denied refunds.

Secretary of Transportation Pete Buttigieg also announced that the department is assessing more than $7.25 million in fines against those airlines for extreme delays in providing those refunds.

The department said it’s received a flood of complaints about airlines’ refusal to give passengers their money back after canceling or changing their flights.

“When a flight gets canceled, 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.”

The refunds required and fines assessed are:

  • Frontier – $222 million in refunds and a $2.2 million penalty
  • Air India – $121.5 million in refunds and a $1.4 million penalty
  • TAP Portugal – $126.5 million in refunds and a $1.1 million penalty
  • Aeromexico – $13.6 million in refunds and a $900,000 penalty
  • El Al – $61.9 million in refunds and a $900,000 penalty
  • Avianca – $76.8 million in refunds and a $750,000 penalty

Frontier is the only domestic airline on the list, while the foreign-based carriers faced the majority of fines.

Many airlines do offer vouchers or credit for future travel instead of refunds for the sake of convenience.

Tiffany Hillion of Gordon, Nebraska, said she was nearly stranded for two days when her flight was canceled, and she had to scramble to find tickets from another airline.

“I was booked on like three or four different flights throughout the day and ended up not leaving the airport for like 12 hours, in Bangor, Maine,” she said. “I was supposed to catch like a 6 o’clock flight, a 6 a.m. flight, and I ended up catching a 6 p.m. flight out.”

Hillion said that while eventually someone canceled and she was able to get a flight home, she was essentially stranded up until that point.

She said she initially would’ve had to stay an extra two nights before being able to leave. The airline only offered a one-night hotel voucher and a meal voucher that she said wasn’t enough to pay for her food.

“They all need to be held to a standard, better business practices,” Hillion said. “It’s unfair, and we’re really at their mercy.”

The Department of Transportation says it’s unlawful for an airline to refuse refunds and instead only provide vouchers.

They say 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 United States and the passenger does not wish to accept an alternative.

The department will be issuing additional penalties for further consumer protection violations later this year.

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