Air Canada to Pay $4.5M Settlement
Air Canada has reached a settlement to resolve a U.S. government investigation into delayed refunds for thousands of passengers. Air Canada was one of several airlines that canceled flights early in the pandemic but refused to give out full refunds at first.
The proposed $4.5 million settlement, must still be approved by an administrative law judge. It would resolve the U.S. Transportation Department investigation into “extreme delays in providing refunds to thousands of consumers for flights to or from the United States that the carrier canceled or significantly changed”. That is much lower than than the $25.5 million fine the department was seeking earlier this year, as reported by Reuters.
More than half of the settlement fund, a total of $2.5 million, would be credited to Air Canada for refunding passengers and $2 million would be paid to the U.S. Treasury.
Air Canada said it agreed to settle without any finding of wrongdoing “to avoid protracted litigation as Air Canada focuses, together with all stakeholders, on rebuilding following the pandemic.”
Air Canada says it has given out C$730.4 million ($575 million) in refunds on flights to or from the United States significantly changed since March 2020 as well as more than C$10 million in goodwill payments to passengers not entitled to refunds under U.S. law.