On Monday, the U.S. Department of Transportation announced that it had issued a court order requiring Frontier Airlines and five international carriers to pay almost $600 million in reimbursements to passengers whose flights had been dramatically modified or cancelled by the airlines.
Early in the epidemic, when travel limitations and worries concerning COVID-19 caused demand to fall to its lowest points in decades, passenger complaints about airline refunds spiked.
87% of the 102,560 complaints filed with the DOT in 2020 and nearly 60% of the 49,958 complaints in 2021 were complaints about airline reimbursements. When airlines cancel flights, passengers are entitled to a reimbursement; nonetheless, many clients received vouchers when airlines reduced travel schedules during the epidemic.
In order to strengthen consumer safeguards against airlines, the DOT and Transportation Secretary Pete Buttigieg have proposed stronger guidelines for when customers are entitled to refunds. Buttigieg has also engaged in heated debate with airlines over what is causing a rise in flight cancellations and delays this spring and summer.
The Department of Transportation announced on Monday that Frontier Airlines was forced to make refund payments totaling $222 million. The ultra-low-cost carrier received a $2.2 million fine from the agency for taking too long to issue reimbursements to customers.
In the most recent quarter, Frontier made a $31 million profit on $906 million in revenue as travel demand and prices continued to recover from the pandemic’s worst effects.
On a teleconference with reporters on Monday, Buttigieg said, “It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re entitled to pay.”
He stated that additional inquiries are being conducted. There were no other refund-related actions pending against American airlines, according to Blane Workie, assistant general counsel for the DOT’s Office of Aviation Consumer Protection, who stated this during the conference call.
The DOT assessed fines of $1.4 million to Air India, $1.1 million to TAP Portugal, $900,000 to Aeromexico and El Al of Israel, and $750,000 to Colombia-based Avianca. According to DOT, the combined refunds for those five airlines totaled just over $400 million.
More than half of the $4.5 million record penalties levied against Air Canada by the DOT last year for refund delays would be given to passengers.