WASHINGTON – The US Transportation Department announced Tuesday that it is pursuing a fine on Air Canada for $25.5 Million, for what it called “extreme delays” in issuing refunds to thousands of customers whose flights were delayed or rescheduled over the US-Canada border.
A request for comment from Air Canada was not immediately returned.
The prospective charge — which Air Canada can appeal — is the latest repercussion of airlines cancelling thousands of flights during the early months of the coronavirus outbreak as air travel plummeted. The Transportation Department said it is looking into how other airlines, including those in the United States, handle refunds.
Because of the increase in cancelled flights last year, the Transportation Department said it gave additional time for refunds provided the airline was making an attempt to return the money. Air Canada, on the other hand, failed to make a good-faith attempt to process reimbursements more swiftly, according to the department.
According to the agency, the level of the civil penalty was determined by taking into account variables such as the harm to customers as well as a deterrence to future refund delays.
An administrative law judge will hear the Transportation Department’s complaint.