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US orders Air India to pay $121.5 million in compensation to passengers and $1.4 million in fines

The US has ordered Tata Group-owned Air India to pay a whopping $121.5 million in compensation to passengers and $1.4 million in penalties for extreme delays in compensating passengers due to flight cancellations or changes, mostly during the pandemic.

Air India is among six airlines that have agreed to cough up a total of more than $600 million in refunds, the US Department of Transportation said on Monday.
Air India’s “refund on demand” policy is against the transport ministry’s policy, which mandates air carriers to legally refund tickets in case of flight cancellations or changes, PTI news agency reported quoting officials.

The instances where Air India was asked to pay compensation and agreed to pay a fine took place before the Tatas’ acquisition of the national carrier.
According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints submitted to the transport ministry for flights that the carrier had canceled or significantly altered.
Air India could not provide the agency with information on the time it took to process refunds for passengers who filed complaints and sought refunds directly with the carrier.

“Despite Air India’s stated refund policy, in practice Air India has not provided timely refunds. As a result, consumers have suffered significant harm from the extreme delay in receiving their refunds,” the US Department of Transportation said.
Apart from Air India, the other airlines that were fined were Frontier, TAP Portugal, Aero Mexico, EI AI and Avianca.

The transport ministry said Air India was ordered to pay $121.5 million in compensation to its passengers and pay $1.4 million in fines.

The department said Denver-based Frontier Airlines is returning $222 million and paying a $2.2 million civil penalty.
TAP Portugal will return $126.5 million and pay a $1.1 million fine; Air India to pay $121.5 million in restitution and a $1.4 million fine; Aeromexico to pay $13.6 million and a $900,000 fine; Israel’s El Al to pay $61.9 million and a $900,000 fine; and Colombia’s Avianca will pay $76.8 million and a $750,000 fine, the Department of Transportation said.
“When Americans buy a ticket with an airline, we expect to get to our destination safely, reliably and affordably, and our job at DOT is to hold airlines accountable for those expectations,” said Transportation Secretary Pete Buttigieg.
He went on to say: “More enforcement and investigations are ongoing and more news in the form of fines may come.”
In addition to the more than $600 million in compensation the airlines have paid, the Department of Transportation announced that it is assessing more than $7.25 million in civil penalties against the six airlines for extreme delays in providing compensation.
With Monday’s fines, the Aviation Consumer Protection Bureau has assessed $8.1 million in civil penalties in 2022, the largest amount the agency has ever issued in a single year, media reported.
Under US law, airlines and ticket sellers 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.
It is illegal for an airline to refuse refunds and instead provide vouchers to such consumers, the Transport Department said.
“When a flight is cancelled, passengers requesting a refund should be refunded immediately. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American passengers and get passengers their money back,” said US Transportation Secretary Pete Buttigieg.
“Having a flight canceled is frustrating enough and you shouldn’t have to haggle or wait months to get your money either,” he added.

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