USDOT secures $4.5M refund agreement with Air Canada

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On Monday, the U.S. Department of Transportation’s Office of Aviation Consumer Protection (OACP) announced it had reached a $4.5 million settlement agreement with Air Canada over American customer refunds.

The refunds stem from an OACP action against the carrier for its lengthy delays in providing refunds for thousands of flights to or from the United States that had been cancelled or significantly changed.

“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 is the highest amount OACP has ever assessed against an airline. The settlement now goes to the Administrative Law Judge presiding over the case for approval.

In addition to the settlement, Air Canada agreed going forward to refund airfare to passengers who purchase nonrefundable tickets to or from the United States when those flights are cancelled or significantly changed by the carrier. Of the $4.5 million assessed to Air Canada, $2.5 million would be paid to passengers who purchased nonrefundable tickets, and the remaining would be paid to the U.S. Treasury.

OACP filed the complaint against Air Canada in June. According to DOT’s current regulations, airlines and other sellers of airline tickets have a legal obligation to provide consumers with refunds if the airline cancels or significantly changes a flight. While regulations currently do not mandate refunds when passengers choose not to travel because of the COVID-19 pandemic, the department said it would soon issue rules covering consumer protections due to government restrictions. The department also called on airlines to voluntarily refund or offer vouchers for flights not taken during the pandemic.