US Transport Secretary’s tightening of airline passenger rights has seen six airlines forced to pay more than $600mn in refunds to passengers because of major delays or cancelled flights, the Transportation Department confirmed this week following a summer of travel disruption.
The department, which said its enforcement actions on refunds led to hundreds of thousands of flyers getting money back, is also issuing more than $7mn in fines because of “extreme delays in providing refunds,” with some more than 100 days. The Office of Aviation Consumer Protection has now assessed the most civil penalties in a year in its history.
“This really shouldn’t be happening,” Transportation Secretary Pete Buttigieg told media earlier this week. “It shouldn’t take enforcement action from the US 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.”
US low-cost airline Frontier Airlines has been ordered to pay $222mn in required refunds and has been hit with a $2.2mn fine. Air India has been ordered to pay $121.5mn in required refunds with a $1.4mn penalty. Portugal’s national airline TAP AIr Portugal must pay $126.5mn in required refunds and has been hit with a $1.1mn fine. Aeromexico must pay $13.6mn in required refunds with a fine of $900,000. El Al Israel Airlines has been ordered to pay $61.9mn in required refunds, and hit with a $900,000 penalty, and Colombia’s Avianca Holdings with an obligation to pay $76.8mn in required refunds with a $750,000 penalty. Frontier in a statement said it issued “goodwill refunds” of nearly $100mn to customers, showing the company’s “commitment to treating our customers with fairness and flexibility.” It added it would pay an additional $1mn after getting a “goodwill refund credit.”
The delayed refunds for Air India mostly occurred during the pandemic when it was still publicly owned, the company said in a statement. Air India, which was privatised in January, said it implemented new systems to expedite refunds and has worked 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.
This year airlines around the world have struggled with the increased demand, and officials hope the threat of fines can keep them on schedule. Almost 3% of flights were cancelled and about 21% delayed so far this year, and air travel complaints increased more than 320% from pre-pandemic levels in the most recent data, from August.
“We’re expecting this coming holiday season to be one of the busiest,” Buttigieg said. He said the revived demand for air travel led to operational issues this summer with “unacceptable levels of delays and cancellations.” The department will continue increasing penalties until there is “less of this kind of behaviour to begin with,” he said.
Last year, Air Canada agreed to pay $4.5mn to settle charges that it didn’t properly give refunds to travellers when it cancelled or altered flights during the pandemic. The department has escalated its work on airline disruption as US lawmakers and passengers have stepped up pressure.
Last month, the Department of Transportation said of the 7,243 consumer complaints received about the airlines in August, almost one in every five concerned refunds.
The process of getting airlines to issue refunds varied by airline, according to Blane Workie, DOT assistant general counsel for the Office of Aviation Consumer Protection, who spoke on the call with Buttigieg.
International traffic climbed 122.2% versus September 2021. September 2022 international (measured in revenue passenger kilometres or RPKs) reached 69.9% of September 2019 levels. All markets reported strong growth, led by Asia-Pacific.
North American carriers had a 128.9% traffic rise in September versus the 2021 period. Capacity increased 63.0%, and load factor climbed 24.6 percentage points to 85.4%, which was the highest among the regions for a fourth consecutive month.
“Even with economic and geopolitical uncertainties, the demand for air transport continues to recover ground. The outlier is still China with its pursuit of a zero-Covid strategy keeping borders largely closed and creating a demand roller coaster ride for its domestic market, with September being down 46.4% on the previous year. That is in sharp contrast to the rest of Asia-Pacific, which, despite China’s dismal performance, posted a 464.8% increase for international traffic compared to the year-ago period,” said Willie Walsh, IATA’s Director General.
“Strong demand is helping the industry cope with sky high fuel prices. To support that demand in the long-term, we need to pay attention to what travellers are telling us. After nearly three years of pandemic travel complexity, IATA’s 2022 Global Passenger Survey (GPS) shows that travellers want simplification and convenience. That’s an important message for airlines but also for airports and governments.
They own many of the facilitation processes that let passengers down at some key airports over this year’s northern summer travel season. According to the GPS, a majority of passengers want to use biometric data rather than passports for border processes. And 93% of passengers are interested in trusted traveller programmes to expedite security screening. Modernising the facilitation experience will not only help alleviate the choke points, it will create a better experience for all,” said Walsh.
Source: Civil Aviation Authority-Qatar