US  imposes $1.4 mn fine on Air  India  over delay in refunds | Mint
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Business News/ Companies / News/  US  imposes $1.4 mn fine on Air  India  over delay in refunds

US  imposes $1.4 mn fine on Air  India  over delay in refunds

The US has fined six airlines over delayed refunds, in what has been hailed a ‘historic’ enforcement action

Air India allegedly has delayed $121.5 million of refunds. Premium
Air India allegedly has delayed $121.5 million of refunds.


The Tata group-owned Air India has been fined $1.4 million as a civil penalty over delay in refunds amounting to $121.5 million over late or cancelled flights, under an order by the US department of transportation.

Under 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.

According to US rules, it is unlawful for an airline to decline refunds and instead provide vouchers to such consumers.

The US department of transportation received a large number of complaints from air travellers about airlines’ failures to provide timely refunds after cancellations or significant changes in flights.

The US department has fined six airlines over delayed refunds, in what it termed as a “historic" enforcement action. The six airlines have collectively paid more than half a billion dollars to people who were owed a refund due to a cancelled or significantly changed flight, the US department said.

According to the consent order issued on 14 November, the Office of Aviation Consumer Protection of the US department of transportation determined that Air India routinely failed to provide timely refunds to passengers for flights to and from the US. Since March 2020, the department has received more than 1,900 complaints alleging that Air India failed to provide timely refunds.

While Air India’s stated policy has been to provide refunds to consumers for flights cancelled or changed, a review by the US department shows that, in practice, the airline took more than 100 days to process most of the refund requests.

“Air India admits that it also failed to provide timely refunds to passengers who filed complaints and requested refunds directly with the airline," the consent order read.

For the $1.4 million civil penalties, the order has directed the airline to pay seven instalments of $200,000 each within 30, 60, 90, 120,150, 180, and 210 days of issuance of the order.

The refunds and penalties for Air India are the third largest after Denver-based Frontier and TAP Portugal. The department fined Frontier $222 million in refunds and $2.2 million in penalty, and TAP Portugal was fined a total of $127.6 million.

“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.

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Published: 15 Nov 2022, 11:59 PM IST
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