Air Canada to settle U.S. flight refund cases in US$4.5 million settlement

Air Canada settles U.S. case

United States aviation authorities say Air Canada has agreed to a US$4.5-million settlement of charges it failed to promptly refund customers after cancelling flights amid the COVID-19 pandemic.

The Department of Transportation says the settlement will resolve a legal action by its aviation consumer protection agency over what it calls Air Canada's "extreme delays" in reimbursing thousands of consumers for nixed flights between the U.S. and Canada.

The agreement — the agency's largest-ever assessment against an airline — is pending approval by an administrative law judge.

Earlier this year, the U.S. Office of Aviation Consumer Protection (OACP) fined Air Canada US$25.5 million after it said the Montreal-based carrier "unlawfully failed to provide timely refunds."

Air Canada sought to dismiss the proceedings in June, saying the agency had not conducted a "well-reasoned analysis" of refund regulations and the company's conditions of carriage.

Air Canada says the two parties have now agreed to settle the matter without "any finding wrongdoing," noting it revised its policy to allow refunds for substantially changed flights 13 months after the pandemic set in.

"Today, the U.S. Department of Transportation’s OACP is holding airlines accountable by ensuring that they treat passengers fairly when flights are significantly changed or cancelled,” deputy secretary Polly Trottenberg said in a release Monday.

"The department is committed to protecting airline consumers and ensuring that all passengers receive the timely refunds to which they are entitled."

About US$2.5 million will be subtracted from the US$4.5-million settlement in recognition of refunds already granted to customers on U.S.-Canada flights, the parties said.

The agency said last summer it had received 6,000-plus refund complaints since March 2020, with Air Canada garnering more complaints on the issue than any American carrier in at least one month last year.

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