A refund flap between Air Canada and the U.S. Department of Transportation has come to an end with Air Canada agreeing to pay a $4.5 million (USD) fine for allegedly delaying refunds to thousands who had their U.S. flights cancelled or changed during the pandemic.
In a press release posted Monday (Nov. 22), the U.S. government said it had reached an agreement with Canada’s flag carrier after an ongoing dispute over the airline’s handling of U.S. passengers.
The multimillion-dollar settlement resolves the U.S. Department of Transportation’s Office of Aviation Consumer Protection (OACP) action against Air Canada for its “extreme delays in providing refunds to thousands of consumers for flights to or from the United States that the carrier canceled or significantly changed.”
“Today, the U.S. Department of Transportation’s OACP is holding airlines accountable by ensuring that they treat passengers fairly when flights are significantly changed or cancelled,” stated U.S. Transportation Deputy Secretary, Polly Trottenberg, on Monday. “The Department is committed to protecting airline consumers and ensuring that all passengers receive the timely refunds to which they are entitled.”
The OACP says the agreement marks the highest amount OACP has ever assessed against an airline.
In addition to the $4.5 million settlement, Air Canada would agree going forward to refund airfare to passengers who purchase non-refundable tickets to or from the United States whose flights are cancelled or significantly changed by the carrier.
Of the $4.5 million assessed, $2.5 million would be credited to Air Canada for refunding passengers who purchased a non-refundable ticket for a flight to or from the United States that the passenger ultimately decided not to take.
The remaining $2 million would be paid to the U.S. Treasury.
OACP says it received more than 5,000 complaints from customers who flew with Air Canada since March 1, 2020 and the agency, initially, had been seeking a $25 million penalty.
In a statement to CBC News, Air Canada said the settlement comes "without prejudice or any finding of wrongdoing.
"This agreement was entered into to avoid protracted litigation as Air Canada focuses, together with all stakeholders, on rebuilding following the pandemic," spokesperson Peter Fitzpatrick said.
He said the U.S. agency is updating its regulations to ask carriers to voluntarily offer customers refunds – "something Air Canada began doing prior to the start of this action in June."
"We changed our policy so that as of April 13, 2021 customers who buy a non-refundable ticket can get a refund if their flight is cancelled or delayed by more than three hours,” Fitzpatrick told CBC.