The US Department of Transportation is proposing significant changes to how and when passengers are due refunds for canceled or changed travel plans. Under a Notice of Proposed Rule Making (NPRM) issued this week the Department would require full refunds when an airline cancels or significantly changes a flight, regardless of reason.
Air Canada and the US Department of Transportation agreed to a $4.5 million fine related to the airline’s failure to provide timely refunds to passengers after cancelling flights in the height of the COVID-19 pandemic.
Does an airline owe passengers a refund if their in-flight wifi doesn’t deliver? Currently that answer is murky. And at least one connectivity provider objects to language used in US Department of Transportation efforts to enact some consumer protection rules around their services.
A year ago, as passengers started pressing Air Canada for refunds against cancelled flights, the airline fought back. Now, in the wake of a proposed $25 million penalty for its actions, the carrier is repeating those positions directly to the US Department of Transportation.
It took more than a year, but the US Department of Transportation is ready to pursue regulatory actions against Air Canada. Citing a lack of progress in resolving the issue through an agreed consent order assessing a civil penalty, the DOT filed a formal complaint against the airline, seeking more the $25 million in damages.
After more than a year of waiting, tens of thousands of Air Canada customers are poised to finally receive COVID-related refunds. The carrier agreed to convert outstanding credits to proper refunds as part of a C$5.8 billion financial aid package funded by the Canadian government.
Canada is on the cusp of pushing serious funds into its aviation industry, a move necessary to keep the planes moving as COVID-19 continues to suppress demand in the country. But Minister of Transport Marc Garneau added a caveat to the plan, one that could make passengers even happier than the airlines: Refunds must be issued for canceled flights.
Facing dozens of customer complaints to the US Department of Transportation, Air Canada is fighting back. While the carrier has only filed one response publicly so far the contents suggest that passengers may well come up short in their efforts to get their money back. Not only does the airline intend to not provide refunds to passengers on flights it canceled, but it now also suggests that the DOT should not and can not regulate such policies.
Do the rules even matter when there is no enforcement action? For many travelers the answer appears to be a resounding “no” as they seek refunds from flights cancelled over the past few months. A few are now pursuing alternate channels, however, and starting to see some wins.
Tens of thousands of cancelled flights. Millions of impacted travelers. Billions of dollars in limbo. And airlines are doing everything they can – including ignoring laws – to keep the money.