As per the US officials, Air India’s policy of “refund on request” is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight.
In a major setback for Air India, the US Department of Transportation has ordered the Tata-group owned airline to pay a whopping USD 121.5 million (Rs 987 crore) as refunds and USD 1.4 million (Rs 11 crore) as the penalties for extreme delays in providing refunds to passengers. The US has issued an order to 6 airlines globally, including India’s Air India due to the cancellation or change in flights, mostly during the Covid-19 pandemic, officials said. The six airlines have been asked to issue a refund a total of USD 600 million said the US DOT.
According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints filed with the Department of Transportation for flights that the carrier canceled or significantly changed.
Air India’s policy of “refund on request” is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight, officials said. The cases in which Air India was asked to pay the refund and agreed to pay the penalty were before the national carrier was acquired by the Tatas.
Air India could not provide the agency with information regarding the time it took to process refunds to passengers who filed complaints and requested refunds directly with the carrier. “Irrespective of Air India’s stated refund policy, in practice Air India did not provide timely refunds. As a result, consumers experienced significant harm from the extreme delay in receiving their refunds,” the US Department of Transportation said.
With Monday’s fines, the Department’s Office of Aviation Consumer Protection has assessed USD8.1 million in civil penalties in 2022, the largest amount ever issued in a single year by that office, a media release said.
Under the 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.It is unlawful for an airline to refuse refunds and instead provide vouchers to such consumers, the Department of Transportation said.