The US Department of Transportation (DoT) has asked Tata Group-owned Air India to pay a fine of $1.4 million, in addition to $121.5 million as refunds to passengers, whose flights were canceled during the Covid pandemic.

Air India is among the six airlines that have been ordered to pay up over $600 million as refunds, said the US DoT on Monday. In addition to Air India, the other airlines that were slapped with fines include Frontier, TAP Portugal, Aero Mexico, EI AI and Avianca.

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The Tata-owned airline confimted that it had received a fine pertaining to delayed refunds, “which mostly pertain to the pandemic period during which Air India was a publicly-owned entity”. According to agency reports, Air India’s policy of “refund on request” is contrary to the Department of Transportation policy, which mandates air carriers to legally refund tickets in the case of cancellation or change in flight.

In its order, the DoT said it had received over 1,900 complaints since March 2020, alleging that Air India failed to provide timely refunds after cancelling or significantly changing consumers’ flights to or from the US.

“Air India’s stated policy has been to provide refunds to consumers for flights it cancelled or significantly changed. However, a review of the complaints filed with the Department revealed that in practice Air India took more than 100 days to process most of the refund requests that it received,” the US government department in a statement.

The DOT said cancelling or changing flights without refund amounts to an unfair practice and warned Air India from repeating it. Air India was privatised in January 2022,  and is making efforts to clear all backlogged refunds, with more than 25,000 cases totalling $18.30 million successfully processed, the airline explained. 

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The airline spokesperson further commented: “We very much regret that customers were inconvenienced and accept the fine. New systems have also been implemented to expedite the processing of new refunds which are now turned around, on average, within one week. We have publicly invited anyone who feels they have a refund due from Air India to contact us.”