The United States of America's Department of Transportation (DOT) issued a fine of 1 million Euros ($1.1M) to TAP Air Portugal. According to US authorities, the airline was issued to pay the fine in relation to the delay of 122 million Euros in due refunds for travelers affected by delays and cancelations since the onset of the pandemic. TAP Air Portugal has responded to the fine:

“While our mostly manual reimbursement process was up to the task before the pandemic, our 90 percent reduced workforce, combined with an avalanche of reimbursement requests due to COVID-19, meant we were unable to deal in a timely manner with the massive and unprecedented requests, which were often complicated with reservations and multiple payment systems”

Reduced workforces create delays.

During the height of the pandemic, the airline laid off most of its workforce, which directly affected the processing of refunds in a timely manner. However, in light of the expectations set out by DOT, the airline swiftly implemented solutions to facilitate the refunds, which the airline states has now been paid. On Tuesday, the Department of Transport halved the fine to 550,000 Euros, which the airline has acknowledged. TAP further responded:

“We take the DoT rules very seriously and are fully committed to complying with them. We have made good faith efforts to process customer refunds as promptly as possible during the extraordinarily challenging circumstances caused by COVID-19”

Not just TAP Air Portugal

This week, the US Department of Transportation fined El Al, Aeromexico, Avianca, and Frontier in relation to further refunds owed to customers. Passenger complaints from airlines surged early in the height of the pandemic as customers' travel plans were thrown into chaos. Travel restrictions and concerns over the pandemic created the lowest demand for air travel in decades.

Complaints regarding refunds accounted for 87% of the 102,560 complaints lodged with DOT in 2020 and 60% of the 49,958 complaints in 2021. Travelers' rights were that a refund would be issued when an airline canceled their flight. Travelers were entitled to refunds from airline cancelations when most were offered a travel voucher instead. DOT and Transportation Secretary Pete Buttigieg have promised to increase customer protection against airlines and provide clear rules to airlines regarding when a customer is entitled to a refund. Buttigieg stated,

“It shouldn’t take an enforcement action from the U.S. Department of Transportation to get airlines to pay refunds that they’re required to pay,”

Frontier Airlines is required to repay $222 million in refunds, and the agency has fined the ultra-low-cost carrier $2.2 million due to the delays in processing customer refunds. Other fines that have been issued were to Air India at $1.4 million, El Al and Aeromexico at $900,000 each, and Avianca at $750,000. DOT has advised that collectively these airlines, along with TAP Portugal, owe over $400 million in refunds to return.

Sources: Heraldnews, CNBC

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  TAP Air Portugal

  IATA/ICAO Code:

  TP/TAP

  Airline Type:

  Full Service Carrier

  Hub(s):

  Lisbon Airport

  Year Founded:

  1945

  Alliance:

  Star Alliance

  CEO:

  Christine Ourmières-Widener

  Country:

  Portugal