The U.S. Transportation Department said that they are to fine Air Canada about $25.5 million for what it termed extreme delays in giving refunds to passengers whose flights across the U.S – Canada border were cancelled or rescheduled.Since March 2020 the department said that they received complaints from more than 6,000 consumers who claimed Air Canada cancelled or changed their flights and then took five to 13 months to provide a refund.
The potential fine is the from thousands of flights that airlines cancelled in the early months of the coronavirus pandemic when air travel plunged.
Air Canada said the Transportation Department’s enforcement notice about refunds amounted to guidance, not formal and enforceable regulations that go through a period of public notice and comment and vowed to challenge the proposed fine.
The airline said that it has refunded more than $1.2 billion to eligible customers who bought refundable tickets. And have said to be paying refunds to the people with non-refundable tickets as well, using $1.4 billion in credit provided by the Canadian government.
Federal regulations require airlines to provide refunds to the passengers when the passengers request for them if the airline cancels or significantly changes the schedule of a flight. For cross-border flights, airlines are supposed to make credit card refunds within the duration of seven days, rising to 20 days for tickets bought with cash.
The Transportation Department said that it gave airline companys more time for refunds last year because of the surge in cancelled flights if the airline was making an effort to return the money due to the coronavirus pandemic. The department said that even in this case Air Canada failed to make efforts to process refunds more quickly and fast.
The agency said that it arrived at the size of the civil penalty by considering factors including the harm to consumers and also as a deterrent to delaying refunds in the future.