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

Air Canada planes are parked at Toronto Pearson Airport in Mississauga, Ontario, Canada, April 28, 2021. REUTERS / Carlos Osorio / File Photo

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 the carrier’s failure to repay thousands of dollars on time. consumers who had requested it for flights to or from the United 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, which was not immediately available for comment, has been hit hard by the pandemic and government restrictions on travel. This spring he secured a financial aid program that gave the carrier access to up to C $ 5.9 billion ($ 4.84 billion) in funds through a loan program. Read more

The Department of Transportation also revealed that it was “also actively investigating the reimbursement practices of other U.S. and foreign carriers flying to and from the United States” and said it would take “enforcement action” on optionally.

The administration said the requested sanction concerned “extreme delays in providing the required refunds.”

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

Since March 2020, the Department of Transportation 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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