The Transportation Department said Air Canada has agreed a $4.5 million settlement to resolve a US government investigation into claims of delays in thousands of air passenger refunds.
The proposed settlement, which still must be approved by an administrative law judge, would resolve a US Department of Transportation investigation into what it said was an “excessive delay in providing refunds to thousands of consumers for flights to or from the United States.” that was canceled or significantly changed by the carrier.”
Of the $4.5 million agreement, $2.5 million will be credited to Air Canada to return passengers and $2 million will be paid to the US Treasury.
In June, the department said it was seeking a $25.5 million fine from Air Canada over the carrier’s failure to provide a timely refund.
Air Canada did not immediately comment, but said in the US government filing that it “agreed to the settlement to avoid protracted litigation, as it would work with all stakeholders to rebuild itself and support the recovery of the airline industry.” focuses on doing his part to do.” Air Canada said it did not acknowledge any violations as part of the agreement.
The department alleged in June that Air Canada continued its no-refund policy in violation of US law for more than a year.
Air Canada said in June that it was refunding non-refundable tickets as part of a Canadian government financial package.
In June the Department of Transportation revealed that it was “actively investigating the refund practices of other US and foreign carriers to and from the United States” and said it would take “enforcement action” as appropriate. It reiterated those comments on Monday.
In May, a trade group told US lawmakers that 11 US airlines issued $12.84 billion in cash refunds to customers in 2020 as the coronavirus pandemic hit the travel industry.
(Reporting by David Shepardson; Additional reporting by Allison Lampert in Montreal; Editing by Alex Richardson)