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Tata-Led Air India Ordered to Pay $121.5 Million in Passenger Refunds

The United States has ordered Tata-led Air India to pay $121.5 million in compensation to passengers. Six airlines have been ordered by the US to pay $600 million in refunds

Officials said there have been extreme delays in issuing refunds to travelers due to flight cancellations or changes, mostly during the pandemic. The US Department of Transportation announced Monday that air India is among six airlines that have agreed to pay a total of more than $600 million in restitution.

The cases where Air India was asked for compensation and agreed to pay the fine happened before the Tatas acquired the national carrier. According to an official survey, 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 canceled or significantly changed by the airline.

Air India was unable to provide the agency with information on how long it took to process refunds for passengers who complained and requested refunds directly from the airline.

“Despite Air India’s stated refund policy, Air India has not issued refunds on time in practice.” “As a result, consumers have suffered significant losses due to the extreme delay in refunds,” the US Department of Transportation said.

In addition to Air India, other airlines fined include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca.
The Department of Transportation said that Air India had to pay $121.5 million to compensate its passengers and pay $121.5million in fines.

Frontier was ordered to pay $222 million in restitution and $2.2 million in fines. TAP Portugal will pay $126.5 million in restitution and $1.1 million in fines; Avianca will pay $76.8 million in restitution and $750,000 in fines; EI AI will pay $61.9 million in restitution and $900,000 in fines, and Aero Mexico will pay $13.6 million in restitution and $900,000 in fines.

More than $600 million in refunds that the airlines have paid, the Department of Transportation announced that it will impose civil penalties of more than $7.25 million on six airlines for extreme refund delays.
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With Monday’s fines, the Aviation Consumer Protection Agency estimated $8.1 million in civil penalties in 2022, the largest amount the agency has ever assessed in a single year, the release said.

Under US law, airlines and ticket sellers have a legal obligation to reimburse the consumer if the airline cancels or significantly changes a flight to, from, or within the US and the passenger does not want to accept the alternative offered.

It is illegal for an airline to refuse refunds and issue coupons to such consumers, the Department of Transportation said.

“If a flight is canceled, passengers who want a refund must be refunded immediately.” “If that does not occur, we will hold the airlines accountable for American passengers and obtain refunds,” said US Transportation Secretary Pete Buttigieg. Officials. said 
Air India has a refund policy on demand, contrary to the Department of Transportation policy that legally requires airlines to refund fares when flights are canceled or changed.

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