Air Canada has agreed with US aviation regulators to pay
$4.5 million to settle charges that it didn’t properly give refunds to US travellers when it cancelled or altered flights during the Covid-19 pandemic.
The settlement between the airline and US Department of Transportation — which must be approved by an administration law judge — would be the largest ever by the agency’s Office of Aviation Consumer Protection. The airline would pay $2.5 million to passengers, and the remaining $2 million would go to the US Treasury, the agency said in a statement.
“Today, the US Department of Transportation’s OACP is holding airlines accountable by
ensuring that they treat passengers fairly when flights are significantly changed or canceled,” DOT Deputy Secretary Polly Trottenberg said in the statement.
The penalty, which would settle civil allegations brought in June, is for Air Canada’s
“extreme delays in providing refunds to thousands of consumers for flights to or from the United States,” the agency said in the statement.
“Air Canada and the DOT have agreed to settle this matter without prejudice or any finding of wrongdoing,” Peter Fitzpatrick, a spokesman for the airline, said. “This agreement was entered into to avoid protracted litigation as Air Canada focuses, together with all stakeholders, on rebuilding following the pandemic.”
Airline refunds became a lightning rod during the initial weeks of the pandemic in March and April 2020 as cash-strapped carriers slashed flights, governments imposed travel restrictions and consumers opted to cancel trips.
Under US law, airlines must offer refunds to passengers if a flight is canceled or the carrier significantly changes the schedule. However, people who choose not to fly aren’t guaranteed refunds.