Department of Transportation Secures More Than $600 Million in Required Refunds for Passengers

The DOT also fined airlines more than $7.25 million in civil penalties for failing to pay customers back.

Travelers walk through the west terminal to catch their flights in Austin International Airport

George Rose/Getty Images

The Department of Transportation (DOT) cracked down on several airlines, securing hundreds of millions in required refunds for customers.

The DOT won passenger refunds from six different airlines totaling more than $600 million, the department shared with Travel + Leisure on Monday: Frontier Airlines, Air India, TAP Portugal, Aeromexico, El Al, and Avianca. The refunds were awarded to hundreds of thousands of passengers.

“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,” Transportation Secretary Pete Buttigieg said during a news conference Monday, 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, the department fined these six airlines more than $7.25 million in civil penalties for failing to pay customers back.

The DOT won the highest amount from Frontier, which had to pay back $222 million in required refunds and was fined an additional $2.2 million. According to the department, Frontier initially avoided paying these refunds by changing their definition of a “significant schedule change” from 3 hours to a different calendar day and retroactively applying that change, regardless of when travelers purchased their tickets.

"Frontier Airlines has issued over $92 million in refunds and redeemed credits and vouchers to customers who voluntarily cancelled their non-refundable tickets during the pandemic and were not entitled to a refund under U.S. law," a Frontier spokesperson told T+L when reached for comment. "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 Oct. 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."

Buttigieg said more investigations against other international carriers are currently underway. 

The enforcement represents the latest effort to ensure customers know their rights and receive refunds when required ahead of the busy holiday season. Over the summer, the DOT launched a new website detailing airline compensation policies where passengers can see which airlines offer specific types of concessions such as meal vouchers, or automatic bookings when flights are canceled. The agency has also proposed a rule change that would require airlines to issue a refund for a delayed domestic flight.

Buttigieg said further updates to the airline customer service dashboard were still possible.

“We found that the first set of things that we published were very effective and we are looking at other items that we can add to the dashboard soon,” he said.

Air passengers who need to file a customer service-related complaint with the DOT can do so online, including for issues concerning flight delays and cancellations or refunds.

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