US orders Air India to pay $121.5 million as passenger refunds

One of the largest airlines in India, Air India, is currently facing difficulties as a result of a massive fine levied by the US government. The US Department of Transportation has determined to punish Air India USD 121.5 million.

The US has mandated that Air India, which is controlled by the Tata Group, pay a staggering USD 121.5 million in refunds and USD 1.4 million in fines for excessive delays in processing passenger reimbursements following flight cancellations or adjustments, primarily during the pandemic. Air India is one of the six airlines that have agreed to repay a total of more than USD 600 million, according to the US Department of Transportation.

Officials said that the “refund on request” policy of Air India contradicts with a Department of Transportation directive that requires carriers to formally return tickets in the event of flight cancellation or rescheduling.

There have been cases where Air India was asked to pay the refund and agreed to pay the penalty before the national carrier was acquired by the Tatas. An official review found that Air India processed more than half of the 1,900 refund requests for flights that the carrier cancelled or fundamentally changed in more than 100 days that were filed to the Department of Transportation.

“Despite its stated refund policy, Air India didn’t actually provide prompt reimbursements. Customers experienced severe harm as a result of the unreasonable delay in receiving their reimbursements, “the US Department of Transportation claims.

Along with Air India, other airlines that were penalised were Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. Air India was compelled to pay a USD 1.4 million fine and USD 121.5 million in refunds to its consumers, according to the Department of Transportation.

The airline and ticket agents are legally required to give the consumer a refund if an airline cancels or significantly adjusts a flight to, from, or within the US and the passenger does not want to accept the offered alternative. According to the Department of Transportation, it is illegal to issue such clients vouchers in lieu of refunds.