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US orders Air India to pay $121.5 million as passenger refunds; Here's why

Air India, which is one of the biggest Indian airlines in the country, has found itself in trouble after the United States imposed a whopping fine on the company. The US Department of Transport has decided to impose a fine of USD 121.5 million on Air India.

US orders Air India to pay USD 121 5 million as passenger refunds Here is why gcw
First Published Nov 15, 2022, 4:45 PM IST

The US has ordered Tata-group owned Air India to pay a whopping USD 121.5 million as refunds and USD 1.4 million as penalties for significant delays in giving reimbursements to passengers as a result of flight cancellations or changes, largely during the epidemic.  According to the US Department of Transportation, Air India is one of the six airlines that have agreed to pay back a total of more than USD 600 million.

Officials stated that the Department of Transportation guideline, which requires airlines to legally return tickets in the event of flight cancellation or alteration, conflicts with Air India's "refund on request" policy.

Before the national airline was purchased by the Tatas, there were instances where Air India was requested to pay the refund and agreed to pay the penalty. An official investigation revealed that Air India processed more than half of the 1,900 refund requests submitted to the Department of Transportation for flights that the carrier cancelled or materially modified in more than 100 days.

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"Regardless of its claimed refund policy, Air India did not in fact offer timely reimbursements. As a result of the exorbitant wait in getting their reimbursements, customers suffered serious harm," according to the US Department of Transportation.

The other airlines that received fines in addition to Air India are Frontier, TAP Portugal, Aero Mexico, EI AI, and Avianca. According to the Department of Transportation, Air India was required to pay a fine of USD 1.4 million as well as USD 121.5 million in refunds to its customers.

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If an airline cancels or drastically alters a flight to, from, or within the US and the passenger does not want to accept the given alternative, the airline and ticket agents are legally required to issue a refund to the customer. The Department of Transportation stated that giving such customers vouchers instead of refunds is against the law.

(With PTI inputs)

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