Air India’s policy against transportation rules, US orders to pay Rs 988.25 crore as passenger refunds

WASHINGTON: Tata Group-owned Air India suffers heavy blow due to the order of the US Department of Transportation. The US ordered to pay Rs 988.25 crore ($121.4 million) as refunds to passengers and Rs 11.38 crore ($1.4 million) as penalties. The action was taken on account of the delay in refunding the ticket charge to the passengers after the cancellation of the flight tickets. The US Department of Transportation mostly considered complaints during the pandemic.

The US Department of Transportation is collecting nearly Rs 5,000 crore as refunds from six airlines. Air India's policy of refunding ticket fares only to those seeking refunds is against the regulations of US Department of Transportation. US law states that airlines and ticket agents are legally obligated to refund tickets in the case of cancellation or change in flight.

The US Department of Transportation says it is illegal for airlines to refuse refunds and instead offer vouchers to passengers. Air India only gave refund to passengers who applied for it, which is against the law. This is the reason for charging fine. The action is based on the complaints filed before Tata took over Air India. US also points out that Air India took more than 100 days to process 1,900 refund complaints filed with the US Department of Transportation regarding flight cancellations.