DOT Secures $600 Million in Refunds From Airlines

Last holiday season was a nightmare for many airlines and the passengers floating, and sometimes staying, in airports. Between labor shortages, strikes, and winter storms, the winter wasn’t kind to the airline industry. And the travelers stranded in airports were the ones to get hit with many of the consequences. The Department of Transportation involved itself following thousands of canceled flights with no refunds happening for passengers. On Monday, Transportation Secretary Pete Buttigieg reported that the Department of Transportation secured $600 million in refunds from six airlines. 

DOT Gets Airlines to Issue Refunds

The Department of Transportation released a statement on Monday, stating that after they received a flood of complaints from travelers claiming that airlines didn’t give them prompt refunds following canceled or changed flights. The six airlines named in the press release are Frontier Airlines, Air India, TAP Portugal, Aeromexico, El Al, and Avianca.

“The bottom line is that as people get ready to fly this holiday season, I want passengers to know that the U.S. DOT has their back, of course when it comes to safety, but also when it comes to meeting these important customer service standards,” Buttigieg said during a news conference Monday. He continued by adding, “Our overall objective is to make sure passengers get their money back, and so we know that these enforcement actions have contributed to that happening… [but] this really shouldn’t be happening in the first place. It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay.” In addition to the refunds, DOT fined the airlines combined over $7 million in civil penalties. 

Airlines Respond

The hardest hit by the Department of Transportation was Frontier Airlines. DOT hit them with $222 million in refunds, a full $100 million over the next airline. They also were slapped with $2.2 million in civil penalties, carrying a third of the total penalties filed. One of the biggest complaints was that the airline retroactively changed the definition of a “significant flight change,” one of the parameters that would spark a refund, from three hours to one full calendar day. This move helped them avoid millions in refunds during the mass of cancellations. 

“Frontier Airlines has issued over $92 million in refunds and redeemed credits and vouchers to customers who voluntarily canceled their non-refundable tickets during the pandemic and were not entitled to a refund under U.S. law,” a Frontier spokesperson said. “In addition, the company provided over $2.7 million in refunds by voluntarily applying a more generous definition of a significant delay than was in effect at the time for customers who booked and purchased their tickets between March 25 and October 27, 2020. These goodwill refunds of nearly $100 million demonstrate Frontier’s commitment to treating our customers with fairness and flexibility. Under the terms of the Consent Order, Frontier will make a total out-of-pocket payment in the amount of $1 million, having received a $1.2 million goodwill refund credit.”