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November 23, 2021

Air Canada signs settlement agreement over refunding delays

The agreement has to be approved by the Administrative Law Judge.

The US Department of Transportation’s (USDOT’s) Office of Aviation Consumer Protection (OACP) has reached a $4.5m agreement with Air Canada to resolve complaints regarding delays in refunding airfares.

In June, OACP filed a complaint against Air Canada, highlighting the carrier’s failure to provide timely refunds to passengers for their tickets that were cancelled or ‘significantly changed’ from or to the US.

In its complaint, OACP sought $25.5m as a penalty from Air Canada for the delay in refunds.

The settlement agreement struck in this context will now have to be approved by the Administrative Law Judge.

Going forward, Air Canada agreed to refund airfare to travellers, who bought non-refundable flight tickets to travel from or to the US that were cancelled or changed by the carrier.

The settlement with Air Canada is said to be the highest that OACP has secured from one airline.

It includes $2m in fine, which will be paid to the US Treasury, while another $2.5m will be credited to the airline for making refunds.

US Transportation Deputy Secretary Polly Trottenberg said: “Today, the US Department of Transportation’s OACP is holding airlines accountable by ensuring that they treat passengers fairly when flights are significantly changed or cancelled.

“The Department is committed to protecting airline consumers and ensuring that all passengers receive the timely refunds to which they are entitled.”

Furthermore, the Department now plans to implement a new rule to protect consumers who cannot travel owing to government restrictions.

It has also asked airline companies to refund voluntarily or give vouchers to passengers who are unable to travel due to pandemic-related curbs.

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