U.S. Department of Transportation Secures Record $4.5 Million Agreement with Air Canada to Settle Refund Case Involving Thousands of Consumers
WASHINGTON – As we head into the holiday travel season, the U.S. Department of Transportation’s Office of Aviation Consumer Protection (OACP) announced it has filed an agreement for a $4.5 million settlement with Air Canada. The settlement would resolve OACP’s action against the carrier for its extreme delays in providing refunds to thousands of consumers for flights to or from the United States that the carrier canceled or significantly changed. The agreement is now pending approval by the Administrative Law Judge presiding over the case.
“Today, the U.S. Department of Transportation’s OACP is holding airlines accountable by ensuring that they treat passengers fairly when flights are significantly changed or cancelled,” said U.S. Transportation Deputy Secretary, Polly Trottenberg. “The Department is committed to protecting airline consumers and ensuring that all passengers receive the timely refunds to which they are entitled.”
The agreement marks the highest amount OACP has ever assessed against an airline. In addition to the $4.5 million settlement, Air Canada would agree going forward to refund airfare to passengers who purchase nonrefundable tickets to or from the United States whose flights are cancelled or significantly changed by the carrier. Of the $4.5 million assessed, $2.5 million would be credited to Air Canada for refunding passengers who purchased a nonrefundable ticket for a flight to or from the United States that the passenger ultimately decided not to take. The remaining $2 million would be paid to the U.S. Treasury.
Airlines and other sellers of airline tickets have a legal obligation to refund consumers if the airline cancels or significantly changes a consumer’s flight. The Department’s current regulations do not mandate refunds when passengers no longer wish to travel due to the COVID-19 pandemic; however, the Department plans to issue a rulemaking soon to address protections for consumers who are unable to travel due to government restrictions. The Department calls on airlines to voluntarily make refunds or offer vouchers that are valid indefinitely for flights not taken on account of the COVID-19 pandemic.
OACP filed the complaint against Air Canada in June of this year. OACP believes that this settlement is in the public interest, and that it serves to deter Air Canada and other carriers from committing similar violations in the future.
OACP is actively investigating the refund practices of other U.S. and foreign carriers flying to and from the United States. Enforcement action will be taken in those cases as appropriate.
The proposed settlement agreement and other related materials can be found at www.regulations.gov, docket DOT-OST-2021-0073.