NEW DELHI: In a setback to Air India, the US Transport Department has ordered Tata Group-owned Air India to pay $121 million as refunds and $1.4 million as penalties for extreme delays in providing refunds to passengers due to the cancellation or change in flights.
Air India confirmed that it has received a fine and accepted the same. “We very much regret that customers were inconvenienced and accept the fine,” Air India said in a statement. It added that the fines mostly pertain to the pandemic period during which Air India was owned and operated by the Government of India. The Tata Group took ownership of the airline earlier in January this year.
“Since Air India was privatised in January 2022, every effort has been made to clear all backlogged refunds, with over 25,000 cases totalling $18.30 million successfully processed. New systems have been implemented to expedite the processing of new refunds, which are now turned around, on average, within one week,” the full-service carrier noted. Air India is among the six airlines that have agreed to pay over $600 million as refunds, said the US Department of Transportation said on Monday.
Air India’s policy of “refund on request” is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in case of cancellation or change in flight. “When a flight gets cancelled, passengers seeking refunds should be paid back promptly. Whenever that doesn’t happen, we will act to hold airlines accountable on behalf of American travellers and get passengers their money back.” said US Transportation Secretary Pete Buttigieg.
“A flight cancellation is frustrating enough, and you shouldn’t also have to haggle or wait months to get your refund.” According to an official investigation, Air India took more than 100 days to process over half of the 1,900 refund complaints filed with the Department of Transportation for flights that the carrier cancelled or significantly changed.