Airlines fined, ordered to pay millions to travelers who were canceled

AP Photo/David Zalubowski

It’s a rare day indeed when I get the chance to say anything nice about Transportation Secretary Pete Buttigieg, so when the opportunity arises I should seize it. That’s what we’re doing here today following the announcement of a significant administrative action taken by the Department of Transportation. As we’ve discussed here many times in the past, the quality of air travel in the United States has tanked since the pandemic began to ease up. Flight delays and cancellations have raised havoc with air travelers and many have run into a brick wall when trying to get a refund after their flights were suddenly canceled on short notice. Now, following a lengthy investigation, the Transportation Department has ordered six airlines to pay more than $600 million in refunds to travelers who faced those situations along with millions of dollars in fines. (NBC News)

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The U.S. Department of Transportation has ordered six airlines to pay a total of more than $600 million in refunds to customers who had their travel plans canceled or delayed during what has been a challenging year for carriers in the U.S. and abroad.

Frontier Airlines leads the list of airlines targeted by the DOT, with the Denver-based carrier set to pay $222 million in refunds and an additional $2.2 million fine. The other airlines implicated are TAP Portugal, Air India, Aeromexico, El Al and Avianca.

“When a flight gets canceled, passengers seeking refunds should be paid back promptly,” U.S. Transportation Secretary Pete Buttigieg, said in a statement. “Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travelers and get passengers their money back.

As with most stories about the federal government, this one has some good points and some shortcomings. Clearly, the Transportation Department was able to identify some carriers who were flagrantly denying passengers refunds and moved to force restitution. And we’re not just talking about a few people. Even if we assume an average ticket price of $500 (because rates have been high for a while now), the $222 million in refunds from just Frontier Airlines works out to more than 400,000 people. The other airlines on the list account for nearly $400 million more, so you can do the math.

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But you’ll notice a lot of airlines are missing from that list. All but one of them are based in other countries. The only American-based airline that was fined was Frontier. But we know that flyers using Delta, American, and all the rest ran into similar issues.

Part of that pattern could be explained by the fact that American law requires airlines to refund fares to travelers if the airline “cancels or significantly changes a U.S. flight” leading to a significant delay. Foreign airlines may not have similar laws in their countries so they may have ignored that requirement.

But the big American carriers almost always try to avoid refunds if they can. They will generally first offer credit toward a future flight instead. Travelers who are unaware of their rights may simply accept the credit rather than push for a refund. And we’ve seen reports of airlines quibbling over how “significant” a delay is as well.

I immediately become suspicious when I see large, powerful corporations being let off the hook while smaller outfits or foreign competitors are taken to task. Perhaps everyone is coloring inside of the lines well enough for this to be a legitimate remedy, but Buttigieg should take a second pass at this and make sure everyone is receiving the same deal.

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Now if he could just do something about the seat size and spacing on economy-class flights. Of course, that’s probably just a pipe dream.

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