Airline ordered to pay £222m to customers after ‘extreme’ delays to pandemic refunds

Frontier Airlines has been ordered to pay customers $222m (£187.8m), along with a $2.2m (£1.8m) penalty, after being slow to issue customer refunds during the pandemic.

The Denver-based airline was one of six carriers instructed to pay a collective $600m by the US Department of Transportation (DOT), in a crackdown on airlines which have dragged their feet over refunds in recent years.

Air India was ordered to pay customers $121.5m by the DOT, as well as receiving a $1.4m fine for its delays.

According to an investigation, Air India took more than 100 days to process more than 900 refund applications - almost half of the 1,900 filed in total with the DOT.

“Irrespective of Air India’s stated refund policy, in practice Air India did not provide timely refunds. As a result, consumers experienced significant harm from the extreme delay in receiving their refunds,” said a statement from the DOT.

On top of their refunds to customers, the airlines were fined a total of $7.5m in penalties for their slowness in repaying the fares.

Also under fire was TAP Air Portugal, which was told to pay out $126.5m to customers, as well as receiving a $1.1m penalty.

Next in line was Aeromexico ($13.6m in refunds and a $900,000 fine) and Israel’s flagship carrier El Al ($61.9m in refunds and a $900,000 fine).

Colombian airline Avianca was told to pay $76.8m in refunds, as well as a $750,000 penalty.

“When Americans buy a ticket on an airline, we expect to get to our destination safely, reliably, and affordably,” said the US secretary of transportation, Pete Buttigieg.

“Our job at DOT is to hold airlines accountable for these expectations—many of which are a matter of law and regulation.”

“This really shouldn’t be happening in the first place,” he added.

“It shouldn’t take an enforcement action from the US Department of Transportation to get airlines to pay refunds that they’re required to pay.”

Mr Buttigieg has proposed new regulations that would force airlines to automatically refund customers if their cancellations or delays affect a journey time by more than three hours for domestic flights, or six hours for international flights.

The Independent has approached the aforementioned airlines for comment.

A Frontier Airlines spokesperson said: “Frontier Airlines has issued over $92 million in refunds and redeemed credits and vouchers to customers who voluntarily cancelled their non-refundable tickets during the pandemic and were not entitled to a refund under US law.

“In addition, the company provided over $2.7 million in refunds by voluntarily applying a more generous definition of a significant delay than was in effect at the time for customers who booked and purchased their tickets between March 25 and Oct. 27, 2020.

“These goodwill refunds of nearly $100 million demonstrate Frontier’s commitment to treating our customers with fairness and flexibility. Under the terms of the Consent Order, Frontier will make a total out-of-pocket payment in the amount of $1 million, having received a $1.2 million goodwill refund credit.”

An Air India spokesperson said: "We very much regret that customers were inconvenienced and accept the fine.

"Since Air India airline was privatised in January 2022, every effort has been made to clear all backlogged refunds, with more than 25,000 cases totalling USD 18.30 million successfully processed."

A TAP Air Portugal spokesperson said: “We take the DoT rules very seriously and are fully committed to meeting all requirements. Every effort was made to process customer refunds as promptly as possible during the extraordinarily challenging circumstances caused by Covid-19.

“While our refund process, which was primarily manual, worked well prior to the pandemic, a 90% reduction in our workforce - combined with the significant influx of refund requests - meant we were unable to handle the unprecedented number of requests as quickly as we had hoped.

“To support our customers, we hired additional staff as soon as we were financially able to do so and invested in implementing automated solutions to facilitate refunds.”

An Avianca spokesperson said: “Avianca announces that it will proceed with the fulfillment of this agreement under the terms stipulated by the authority.

“It is essential to point out that since the reactivation of post-pandemic operations, more than 1.4 million reimbursement requests have been processed, and currently the average response time is 13 days. Likewise, different tools have been managed so that customers can either modify their travel plans or get back the money they paid for tickets that were not used due to the operational disruptions caused by Covid-19.”