US orders Air India to pay $121.5m as passenger refunds

The US has ordered Tata Group-owned Air India to pay a staggering $121.5 million in refunds and $1.4 million in fines for significant delays in providing refunds to passengers due to the cancellation or change in flights, mostly during the pandemic, officials said.

Air India is among the six airlines that have agreed to cough up a total of over $600 million as refunds, the US Department of Transportation said on Monday, reports NDTV.

Air India's “refund on request” policy is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in case of cancellation or change in flight, officials said.

The cases in which Air India was asked to pay the refund and agreed to pay the penalty were before the national carrier was acquired by the Tatas.

According to an official investigation, Air India took more than 100 days to process more than half of the 1,900 refund complaints filed with the Department of Transportation for flights that the carrier cancelled or significantly changed.

Air India could not provide the agency with information regarding the time it took to process refunds to passengers who filed complaints and requested refunds directly with the carrier.

“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,” the US Department of Transportation said.

In addition to Air India, the other airlines that were slapped with fines include Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca.

The Department of Transportation said Air India was ordered to pay $121.5 million in refunds to its passengers and pay $1.4 million as fine.