US directs Air India to pay $121.5M in refunds to passengers; imposes a $1.4M fine


The US Department of Transportation (DoT) ordered Air India to pay a fine of $1.4M and $121.5M in refunds to passengers whose flights were cancelled due to COVID-19.

Air India fined by US DoT
The US DoT has mandated that Air India pay a $1.4 million fine and $121.5 million in compensation to passengers whose flights were cancelled due to COVID-19

According to the US Department of Transportation, Air India is one of the six airlines that have agreed to repay a total of more than $600 million. 

Officials said that the “refund on request” policy of Air India violates a Transportation Department directive that mandates carriers repay tickets in the event of a legally required flight cancellation or adjustment.

There have been cases where Air India has agreed to pay the penalty and has been told to pay the refund before Tatas purchased the national carrier.

Following a thorough investigation, it was discovered that Air India handled more than half of the 1,900 refund requests for aircraft that the carrier had cancelled or materially altered in the previous 100 days that had been made to the Transportation Department.

The agency was unable to determine how long it took Air India to react to refund requests made directly by customers who complained and asked for reimbursements. India claimed to have a return policy but didn’t give refunds right away. 

Frontier was required to pay a fine of $2.2 million and was given a refund of $222 million. The refund and fine for Avianca will total $76.6 million; the refund and fine for TAP Portugal and EI AI will total $126.5 million and $61.9 million, respectively.

Avianca is supposed to pay fines and refunds of USD 76.6 million in total

The Transportation Department said that it is slapping civil penalties against these six airlines totalling more than $7.25 million in retaliation for their egregious return of late deliveries and the more than $600 million in refunds that the carriers have already paid.

According to a news release, the Department of Airline Consumer Interests of the Ministry reportedly imposed $8.1 m in civil penalties in 2022, the most amount ever issued in a single year. The Transportation Department claims it is unlawful to give these clients vouchers in place of refunds.

Passengers who ask for refunds once a flight is a cancelled need to get their cash right away. When that doesn’t happen, US Transportation claims, we’ll hold airlines accountable for accommodating American tourists and recouping customer payments.

Pete Buttigieg at DoT said that there were continuing regulatory actions, investigations, and possible fine announcements.

“When Americans purchase a ticket on an aircraft, we want to get to our destination on time, reliably, and affordably, and our duty at DOT is to hold carriers accountable for these expectations.”

–Pete Buttigieg, Transportation Commissioner, DoT

The person went on to say that there were continuing regulatory actions, investigations, and possible fine announcements.

Along with the more than $600 million in compensation that the flights have already paid, the DoT declared that it is imposing civil penalties totalling more than $7.25 million on these six carriers for their egregious refund delivery delays.

The Office of Aviation Consumer Rights of the Government reportedly fined USD 8.1 billion in civil fines in 2022, the highest amount ever issued in a single year!