Feds fine Frontier, 5 foreign airlines $7.25M over refunds for passenger cancellations, travel changes

Frontier Airlines, which serves all three of South Florida’s international airports, has been fined $2.2 million by the U.S. Department of Transportation over delays in compensating passengers for flight cancellations or significant changes in their travel plans.

The ultra-low-cost carrier, which is based in Denver, was the only U.S. airline disciplined in a case that also resulted in five foreign carriers being assessed fines and ordered to pay refunds.

Overall, more than $600 million in refunds were returned to passengers by the six airlines under rules backed by enforcement actions, the DOT said. Frontier paid out $222 million. Between Frontier and the foreign airlines, the agency assessed $7.25 million in fines.

The other carriers paying required refunds and fines were:

—Air India: $121.5 million in refunds; fined $1.4 million.

—TAP Portugal: $126.5 million in refunds; fined $1.1 million

—Aeromexico: $13.6 million in refunds; fined $900,000.

—El Al: $61.9 million in refunds; fined $900,000.

—Avianca: $76.8 million in refunds paid; fined $750,000

“It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay,” Secretary Pete Buttigieg said on a media conference call.

More investigations are underway, but there are no other pending cases over refunds against other U.S. airlines, the agency said.

In a statement, Frontier said it issued “over $92 million in refunds and redeemed credits and vouchers to customers who voluntarily cancelled their non-refundable tickets during the pandemic and were not entitled to a refund under U.S. law.”

The company also said it provided more than $2.7 million in refunds “by voluntarily applying a more generous definition of a significant delay than was in effect at the time for customers who booked and purchased their tickets between March 25 and Oct. 27, 2020.”

“These goodwill refunds of nearly $100 million demonstrate Frontier’s commitment to treating our customers with fairness and flexibility,” the airline added.

Under a consent order with the government, Frontier said it will make an out-of-pocket payment of $1 million after receiving a “$1.2 million goodwill refund credit” from the government.

A Washington-based consumer advocate called the American Economic Liberties Project asserted that the agency’s action is too late given the broad-based flight delays and cancellations that plagued the flying public amid the COVID-19 pandemic.

“Airlines that brazenly skirt the rules deserve to be fined, but this latest round of enforcement from the USDOT comes almost three years too late and leaves out the most egregious U.S. offenders,” William J. McGee, senior fellow for aviation and travel, said in a statement. “The USDOT must address widespread flight disruptions amid soaring airfares, and restore confidence in flying ahead of this holiday season — or we all risk a repeat of the summer’s flight debacles.”

It noted that United Airlines “led all domestic carriers with 10,229 consumer refund complaints in 2020, far outpacing Frontier’s 4,329 complaints, and yet United and other U.S. airlines have not been penalized.”

New rules in the making

The department is proposing a new set of rules to protect passengers whose trips are canceled or significantly disrupted.

They would require airlines to assist travelers in the following ways:

—Proactively inform them that they have a right to receive a refund when a flight is canceled or significantly changed,

—Define a significant change and cancellation that would entitle a consumer to a refund.

—Provide non-expiring vouchers or travel credits when people can’t travel because they have COVID-19 or other communicable diseases.

—Require airlines that receive significant government assistance in the future related to a pandemic to issue refunds instead of non-expiring travel credits or vouchers when passengers are unable or advised not to travel because of a serious communicable disease.

Frontier did not respond to a request for comment Tuesday on the proposed rules.

The department has established a public comment period that runs through Dec. 16. The agency’s aviation consumer protection advisory committee will hold a virtual hearing on Dec. 9 to decide on recommendations for its proposed airline ticket refund rules.