US seeks to fine Air Canada over extreme delays with refunds

The US Department of Transportation said it has received thousands of complaints from consumers who claimed Air Canada cancelled or changed their flights and then took five to 13 months to refund their money.

For cross-border flights, airlines are supposed to make credit card refunds within seven days, rising to 20 days for tickets bought with cash, according to United States federal regulations [File: Caleb Jones/AP]

The United States Department of Transportation (DOT) said on Tuesday that it is seeking to fine Air Canada about $25.5m for what it termed extreme delays in giving refunds to thousands of passengers whose flights across the US-Canada border were cancelled or rescheduled.

The DOT said that since March 2020, it has received complaints from more than 6,000 consumers who claimed Air Canada cancelled or changed their flights and then took five to 13 months to provide a refund.

Air Canada did not immediately respond to a request for comment.

The potential fine — Air Canada can contest it — is the latest fallout from thousands of flights that airlines cancelled during the early months of the coronavirus pandemic as air travel plunged. The DOT said it is investigating the handling of refunds at other airlines, including US ones.

Federal regulations require airlines to provide refunds when passengers request them if the airline cancels or significantly changes the schedule of a flight. For cross-border flights, airlines are supposed to make credit card refunds within seven days, rising to 20 days for tickets bought with cash.

The DOT said that it allowed more time for refunds last year because of the surge in cancelled flights if the airline was making an effort to return the money. The department said, however, that Air Canada failed to make a good-faith effort to process refunds more quickly.

The agency said that it arrived at the size of the civil penalty by considering factors including the harm to consumers and also as a deterrent to delaying refunds in the future.

In many cases, passengers who cancelled their reservations on North American airlines have received vouchers instead of cash. As a result, the airlines are sitting on billions of dollars worth of tickets, some of which will likely never be used. That did not appear to be the case with the Air Canada refunds.

The DOT’s complaint will go to an administrative law judge.

Source: AP

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