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U.S. Regulators Fine Canadian Airline Air Transat $525,000 For Delayed Pandemic Refunds

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The Office of Aviation Consumer Protection of the U.S. Department of Transportation found that Air Transat “subjected thousands of consumers to extreme delay in making refunds available” during the pandemic, and it fined the company more than $500,000.

Regulatory authorities on Wednesday issued a consent agreement requiring Air Transat to pay $525,000 in civil penalties for failing to provide cash refunds for flights it had canceled at the start of the epidemic in 2020.

The DOT announced that Air Transat will receive a $85,000 credit for reimbursements it gave to travelers who voluntarily missed flights despite having nonrefundable tickets.

Air Transat suddenly ceased issuing ticket refunds for canceled flights in March 2020 and began distributing credit vouchers that could only be applied to a future Air Transat travel.

At the beginning of the epidemic, a number of airlines used similar tactics to avoid or at least delay hemorrhaging income as travel restrictions essentially grounded airlines all over the world.

After receiving 150 complaints from Air Transat passengers who had been refused a refund for canceled flights between the United States and Canada, the DOT made the decision to launch an investigation.

Air Transat was unable to estimate the precise number of passengers affected by his refund policy change, but the DOT determined that thousands of impacted passengers experienced “extreme delay” in collecting reimbursements that they were entitled to under U.S. law.

On March 18, 2020, the airline ceased issuing refunds; it didn’t start issuing them again for canceled flights until November 20, 2020. However, many impacted consumers still had credit vouchers in April 2021 after that date.

In response to the DOT investigation, Air Transat argued that its pandemic-era refund policy was a “measured and justifiable approach to an extraordinary and unprecedented crisis.”

The airline furloughed almost 96% of its administrative workers, including pilots and cabin crew, and about 30% of its pre-pandemic workforce has not joined the company since. In addition, Air Transat claimed that, unlike its American competitors, it did not receive government bailouts.

A multitude of airlines that implemented such refund practices during the pandemic are the subject of inquiries by the DOT. British Airways was fined $1.1 million earlier this year by regulators after it was discovered that it had purposefully disabled a refund form on its website for the impacted clients.

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