Air Canada Will Pay $4.5M Settlement for Delayed Refunds to U.S. Passengers

Air Canada has agreed to a $4.5 million settlement to resolve a U.S. government investigation into delayed refunds for thousands of passengers. This was a big issue early in the pandemic as several airlines were canceling flights but were refusing to give out full refunds to affected customers.

The proposed settlement, which still must be approved by an administrative law judge, 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”.

$2.5 million from the settlement fund 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.” That is much lower than than the $25.5 million fine the department was seeking earlier this year, Reuters reports.

Air Canada says it has provided 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.