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U.S. Seeks $25.5 Million Fine from Air Canada Over Pandemic No-Refund Policy

U.S. Seeks $25.5 Million Fine from Air Canada Over Pandemic No-Refund Policy

Air Canada Will No Longer Refer to Passengers as "Ladies and Gentlemen" in Onboard Announcements

The U.S. Department of Transport (DOT) said on Tuesday that it was seeking a $25.5 million fine from Air Canada over the carrier’s failure to issue pandemic-related refunds in a timely manner.

The DOT said it had received more than 6,000 complaints from consumers who had flights booked to or from the United States with Air Canada but who had been denied refunds for flights that the carrier cancelled or significantly changed.

Airlines are normally required to provide a full refund for cancelled flights within seven days of being requested for a booking made with a credit card or within 20 days for bookings paid for with cash.

The administration says it cut airlines some slack because of the unprecedented number of refund requests made during the pandemic but airlines had to make a good faith effort to process the refund requests. “Air Canada did not make such good faith efforts,” the DOT claimed on Tuesday.

Instead, Air Canada kept up its no-refund policy, in violation of U.S. consumer law, for almost an entire year after the DOT put airlines on notices following a May 2020 enforcement notice. Customers had to wait for between five and 13 months for their refund requests to finally be granted.

The DOT’s Office of Aviation Consumer Protection has filed a formal complaint with an Administrative Law Judge and is seeking a $2.5 million civil penalty for Air Canada’s refund failure. The size of the penalty, the DOT explained, is meant to deter other airlines from violating the rights of U.S. consumers in. the future.

Air Canada has 15-days to respond to the complaint.

The DOT also said on Tuesday that it was actively investigating the refund practices of other airlines – both U.S.-based carriers and foreign airlines. “Enforcement action will be taken in those cases as appropriate.,” the DOT noted.

Photo Credit: Air Canada

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