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United States seeks $ 25.5 million fine from Air Canada for delayed refunds

 


WASHINGTON, June 15 (Reuters) – The U.S. Department of Transportation on Tuesday announced it is seeking a $ 25.5 million fine from Air Canada (AC.TO) for failure to pay the carrier on time requested by thousands customers for flights to or from the United States. States.

The department said it had filed a formal complaint with a U.S. administrative judge about flights that Air Canada canceled or significantly changed. The sanction is “intended to deter Air Canada and other carriers from committing similar offenses in the future,” the ministry said, adding that Air Canada had maintained its no-refund policy in violation of US law for. more than a year.

Air Canada said it believed the US government’s position “had no merit.” He said he “will vigorously challenge the procedure.”

Air Canada secured a financial assistance program this spring that enabled the carrier to access funds of up to C $ 5.9 billion ($ 4.84 billion) through a loan program. Read more

The carrier said it was reimbursing the non-refundable tickets under the Canadian government’s financial program. As of April 13, eligible customers can get refunds for previously issued non-refundable tickets, he said.

The Department of Transportation revealed it was also “actively investigating the reimbursement practices of other US and foreign carriers flying to and from the United States” and said it would take “enforcement action” if appropriate.

The administration said Air Canada’s requested penalty related to “extreme delays in providing the required refunds.”

Claims for reimbursement have increased during the COVID-19 pandemic.

Since March 2020, the Department of Transport has received more than 6,000 complaints against Air Canada from consumers who said they were denied reimbursement for canceled or significantly altered flights. The department said the airline had committed a minimum of 5,110 violations and that passengers had waited five to 13 months for refunds.

Last month, a business group told U.S. lawmakers that 11 U.S. airlines issued $ 12.84 billion in cash refunds to customers in 2020 as the coronavirus pandemic shook the travel industry.

In May, Democratic Senators Edward Markey and Richard Blumenthal called on carriers to provide cash refunds whether flights were canceled by the airline or the traveler.

($ 1 = 1.2195 Canadian dollars)

Reporting by David Shepardson

Our Standards: Thomson Reuters Trust Principles.

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