Frontier, 5 other airlines to pay $600M over pandemic delays

Frontier, 5 other airlines to pay $600M over pandemic delays

Frontier Airlines and five foreign carriers have agreed to refund more than $600 million combined to travelers whose trips were canceled or significantly delayed since the start of the pandemic, federal officials said Monday. The U.S. Department of Transportation also said that it had fined the same airlines $7 million for delaying refunds so long that they were in violation of consumer-protection laws.

The largest U.S. airlines were responsible for the majority of refund complaints and avoided fines. Officials confirmed that no other U.S. carriers are under investigation for possible fines.

Consumers flooded the agency with thousands of complaints about their inability to get refunds when the airlines canceled huge numbers of flights after the pandemic hit the U.S. in early 2020. This was the most common category of complaints.

“When Americans book a flight on an airline, they expect to arrive safely, reliably, and affordably. It is our job at DOT to hold them accountable for this expectation,” said Pete Buttigieg, Transportation Secretary.

He said, “This really shouldn’t have been happening in the first place.” It shouldn’t take enforcement action by the U.S. Department of Transportation for airlines to pay the required refunds.

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Frontier refunds

The department said Frontier Airlines is refunding $222 million and paying a $2.2 million civil penalty.

In a consent order, the government charged that Frontier changed its definition of a significant delay to make refunds less likely, and that an online system to process credits went down for a 15-day period in 2020.

Frontier spokeswoman Jennifer de la Cruz said the Denver-based airline issued nearly $100 million in “goodwill refunds,” including to people with nonrefundable tickets who canceled on their own and were not entitled to a refund under federal law.

The refunds “demonstrate Frontier’s commitment to treating customers with fairness, flexibility, and respect,” de la Cruz stated.

Five other airlines fined

Five other airlines paid fines and issued refunds, the Transportation Department said.

TAP Portugal will refund $126.5 million and pay a $1.1 million fine; Air India will pay $121.5 million in refunds and a $1.4 million penalty; Aeromexico will pay $13.6 million and a $900,000 fine; Israel’s El Al will pay $61.9 million and a $900,000 penalty; and Colombia’s Avianca will pay $76.8 million and a $750,000 fine. We have more enforcement actions and investigations in progress and there may be more news by way of fines,” Buttigieg stated during a telephone interview with reporters.

However, there will be no fines for other U.S. airlines because they responded “shortly after” the Transportation Department reminded them in April 2020 of their obligation to provide quick refunds, said Blane Workie, the assistant general counsel for the Transportation Department’s Office of Aviation Consumer Protection.

” We do not have any cases against other U.S. airlines. Workie stated that the remaining cases were against foreign carriers during the same call with Buttigieg.

This did not satisfy consumer advocates who claimed that major U.S. airlines had also violated refund rules — even though they took more rapid corrective actions.

“Frontier played a bad part in all of this. They should be fined and we are glad that they are getting the refunds they owe. We are critical of the DOT’s inability to pursue the largest fish, those causing the most problems,” stated Bill McGee, American Economic Liberties Project, a nonpartisan group that opposes concentrated industry power.

“Airlines who brazenly ignore the rules should be punished,” he stated.

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In 2020, United Airlines had the most refund-related complaints filed with DOT — more than 10,000 — although smaller Frontier had a higher rate of complaints. Air Canada, El Al and TAP Portugal were next, both over 5,000, followed by American Airlines and Frontier, both topping 4,000.

Air Canada paid $4.5 million last year to settle similar U.S. claims of slow refunds. A credit of $2.5million was also granted for refunds. The Transportation Department initially sought $25.5 million in that case.

CBS News’ Kris Van Cleave contributed reporting.

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