El Al among six airlines fined by US for too-long delay of COVID ticket refunds
Department of Transportation says Israeli airline to pay $61.9 million to passengers on top of $900,000 penalty for delaying refunds in violation of consumer-protection rules
Six carriers — including Israel’s El Al airlines and the American Frontier Airlines — have agreed to refund more than $600 million combined to travelers whose trips were canceled or significantly delayed since the start of the pandemic, US federal officials said Monday.
The US Department of Transportation said it also fined the same airlines more than $7 million for delaying refunds so long that they violated consumer-protection rules.
The largest US airlines, which accounted for the bulk of complaints about refunds, avoided fines, and an official said no US carriers other than Frontier were being investigated for potential 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 US in early 2020. It was by far the leading category of complaints.
“When Americans buy a ticket on an airline, we expect to get to our destination safely, reliably and affordably, and our job at DOT is to hold airlines accountable for these expectations,” Transportation Secretary Pete Buttigieg said.
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 an online system to process credits went down for a 15-day period in 2020.
The Transportation Department said El Al will pay $61.9 million and a $900,000 penalty; 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; and Colombia’s Avianca will pay $76.8 million and a $750,000 fine.
El Al, which was struggling financially before the pandemic hit, was dealt an even greater financial blow when COVID largely shut down international travel. The airline was the target of frequent complaints in Israel for being slow to issue refunds and impossible to contact. In April, the Israel Consumer Council sent a letter to El Al demanding it address a wide range of consumer complaints, including over COVID-era refunds.
In a statement from El Al cited by Passport News on Tuesday, the airline emphasized that “El Al returned the customers their money,” and that after “a long conversation” with the US Department of Transportation it agreed to a “symbolic fine.” El Al also laid blame for its delayed ability to pay refunds on “the dragging out of discussions to receive government aid.”
Buttigieg told reporters on Monday that the Department of Transportation has “more enforcement actions and investigations underway and there may be more news to come by way of fines.”
However, there will be no fines for other US 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 pending cases against other US carriers. Our remaining cases are against foreign air carriers,” Workie said on the same call with Buttigieg.
That did not satisfy consumer advocates, who said that the major US airlines also violated rules around refunds — even if they took corrective steps more quickly.
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 agreed last year to pay $4.5 million to settle similar US allegations of slow refunds and was given credit of $2.5 million for refunds. The Transportation Department initially sought $25.5 million in that case.