Pretty much everyone’s plans for 2020 got dashed, and if you had a summer vacation planned that involved taking a flight, you very likely didn’t do it, as the airline industry had its worst year ever in 2020.
Plenty of people had their flights straight-up canceled, and many of those would-be travelers still haven’t received their refunds. People have been complaining to the Department of Transportation about this, as Travel Weekly notes that “During the first six months of this year, the DOT received 10,089 refund-related complaints, up from 750 during the first half of 2019 but down from 56,326 during the chaotic first half of 2020.”
So while the complaints have subsided a bit from the peak of the pandemic, many people are still unhappy they haven’t received their refunds, and now it appears that Department of Transportation Secretary Pete Buttigieg is listening.
The Department of Transportation is Not Kidding Around
The Department of Transportation has imposed a total of $7.25 million in fines on Frontier Airlines (FRON) , as well as the foreign airlines Air India, TAP Portugal, Aeromexico, El Al, and Avianca for failing to comply with customer refund requirements.
The DOT has said that the six airlines will be paying out more than $600 million in refunds that had previously been held back from customers. Additionally, the Department will be issuing more than $7 million in fines due to “extreme delays in providing refunds,” with some delayed more than 100 days.
“It shouldn’t take enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay, and so I have asked the team to undertake an exercise to make sure that the fines are calibrated to deter this in the future,” said Buttigieg in a call with reporters.
“Our overall objective is to make sure passengers get their money back,” he added. “We know that these enforcement actions have contributed to that happening in the case of these six airlines."
Before this move, Air Canada was the only airline to get fined by the DOT, as last year it agreed to pay $4.5 million to settle charges that it didn’t properly give refunds to travelers when it canceled or altered flights during the pandemic.
Air India was publicly owned during the pandemic but was privatized in January. The company said it implemented new systems to expedite refunds and is working to clear its refund backlog with more than 250,000 cases processed. “We very much regret that customers were inconvenienced and accept the fine,” the company said.
Buttigieg Indicates More Fines May Be Coming
Here’s how the penalties broke down.
- Frontier Airlines Holdings Inc. was hit with $222 million in required refunds and a $2.2 million fine.
- Air India Ltd. has $121.5 million in required refunds with a $1.4 million penalty.
- TAP Portugal has $126.5 million in required refunds with a $1.1 million fine.
- Aeromexico SAB has $13.6 million in required refunds with a fine of $900,000.
- El Al Israel Airlines has $61.9 million in required refunds with a $900,000 penalty.
- Colombia’s Avianca Holdings SA has $76.8 million in required refunds with a $750,000 penalty.
The cited reasons for all the cancellations and delays range from multiple causes, such as climate change-induced weather disruptions to pilots and crew workers calling in sick due to covid.
But by far the biggest reason for the increase in cancellations and flights, even after vaccines became readily available and people began flying again, is that a lot of pilots decided to retire early or take a buyout during the pandemic, and the airline industry is struggling to recruit and train the next generation.
This task is even more difficult, given that there aren’t enough experienced hands on deck to help train the new pilots; Southwest’s CEO said he doesn’t expect the company to catch up to pre-pandemic levels until late next year.
But Buttigieg has been indicating all year that he is not playing around with the airline industry. He has publicly called on airlines to get their act together, get the numbers of cancellations down, and provide customers whose flights have been delayed or canceled with meal and hotel vouchers. He has also proposed legislation to expand protections for passengers wanting refunds for canceled flights.
Additionally, Buttigieg has indicated that more fines may be forthcoming if things don’t improve.
“We’re expecting this coming holiday season to be one of the busiest,” Buttigieg said, and referred to the “unacceptable levels of delays and cancellations” this year has seen, saying there will be more ratcheting penalties until there is “less of this kind of behavior to begin with.”
