New Brunswick Tribune

In a settlement with the US Department of Transportation, Air Canada will pay US$4.5 million

Key takeaways:

  • According to the US Department of Transportation, the payment is the largest OACP has ever received from a single airline.
  • The OACP sought a US$25 million penalty against Air Canada, which was first filed in June.

The US Department of Transportation’s Office of Aviation Consumer Protection (OACP) will settle for US$4.5 million after initiating action against Air Canada for its excessive delay in delivering refunds for flights to and from the United States that were canceled or altered early in the outbreak.

According to a press statement from the US Department of Transportation, the payment is the largest OACP has ever collected from a single airline.

A US$2 million fee will be paid directly to the US Treasury as part of the agreement.

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The lawsuit against Air Canada was first filed in June, and the OACP was seeking a US$25 million penalty. Since March 2020, the OACP had received more than 6,000 complaints against Air Canada from customers who had their flights changed at short notice and were denied a refund, according to the complaint.

As travel restrictions in different nations changed at the onset of the epidemic, airlines all over the world abruptly canceled or altered flights in an attempt to comply with the restrictions or deal with low ticket sales.

According to US law, airlines must issue refunds upon request if they significantly alter a flight, and refunds must be delivered within seven days if the client purchased with credit and 20 days if the customer paid with cash.

According to the OACP, Air Canada violated the law at least 5,100 times, and passengers were forced to wait “anywhere from 5 months to 13 months” for reimbursements.

Air Canada reaches US$4.5M settlement over delayed U.S. refunds

When the OACP indicated that they were allowing airlines extra time to deal with the high volume of refund claims, the original filing action alleged that Air Canada failed to make a good faith effort to process refunds.

In June, Air Canada announced that it would challenge the proceedings, claiming that the agency had failed to perform a “well-reason review” of the legislation.

According to the press statement announcing the settlement, US$2.5 million will be used to reimburse passengers who booked a non-refundable ticket for a flight to or from the United States.

The announcement noted that “airlines and other vendors of airline tickets have a legal obligation to repay consumers if the airline cancels or drastically alters a consumer’s flight.”

“OACP thinks that this payment is in the public interest and will dissuade Air Canada and other carriers from repeating similar offenses.”

Using information from the Canadian Press.

Source: CTV News

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