US ordered Air India to pay refunds worth $121.5 million and imposed a fine of $1.4 million

staff reporter

The US has ordered Tata-group-owned Air India to pay refunds worth $121.5 million and imposed a fine of $1.4 million for extreme 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.

Air India’s policy of “refund on request” is contrary to the department of transportation’s policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight, the 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 department of transportation said 

Air India said it has received a fine pertaining to delayed refunds, which mostly relate to the pandemic period during which Air India was a publicly-owned entity.

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

Apart from Air India, the US has imposed fines on Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. The department of transportation is assessing more than $7.25 million in civil penalties against these six airlines for extreme delays in providing refunds

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