USA hits TATA Air India With $121.5 million Penalty

The US has mandated that Air India, which is owned by the Tata group, pay a staggering $121.5 million in refunds and $1.4 million in penalties.

According to a US Department of Transportation order, Air India, which is owned by the Tata group, has been fined $1.4 million as a civil penalty for delaying refunds totaling $121.5 million for delayed or canceled flights.

If an airline cancels or significantly alters a flight to, from, or within the US and the passenger does not want to accept the offered alternative, the airline and ticket agents are legally required to refund the customer.

It is against the law for an airline in the US to offer such customers vouchers rather than refunds.

Numerous complaints from passengers alleging delayed or untimely refunds following aircraft cancellations or significant adjustments were sent to the US Department of Transportation.

In what it referred to as "historic" enforcement action, the US agency punished six airlines for reimbursement delays. According to the US agency, the six airlines have together paid out more than $500,000,000 to passengers who were entitled to a refund following a flight cancellation or significant alteration.

The Office of Aviation Consumer Protection of the US Department of Transportation found that Air India consistently failed to give passengers timely refunds for flights to and from the US, as per the consent order imposed on November 14. More than 1,900 complaints have been made to the department since March 2020 stating that Air India failed to issue reimbursements promptly.

Although it has been stated that Air India will reimburse customers for canceled or changed flights, an investigation by the US department reveals that, in reality, the airline took more than 100 days to process the majority of refund requests.

The cooperation judgment stated that "Air India agrees that it also failed to timely repay passengers who filed complaints and requested refunds directly with the airline."

The order requires the airline to make seven payments of $200,000 each within 30, 60, 90, 120, 150, 180, and 210 days of the order's issue to satisfy the $1.4 million in civil penalties.

After Denver-based Frontier and TAP Portugal, Air India has the third-largest refunds and fines. The government fined TAP Portugal a total of $127.6 million while fining Frontier $222 million in reimbursements and $2.2 million in penalties.

According to a statement from the airline, "Air India admits that it has received a fine due to delayed reimbursements, which largely pertain to the epidemic period when Air India was a publicly-owned corporation."

We deeply regret that our customers had to experience inconvenience, and we accept the fine, but it continued.