Air Canada squeaks away with $2 million fine for not refunding passengers
The Air Canada refund saga is about to be over.
The U.S. Department of Transportation (DOT) on Monday announced that it had reached an agreement with Air Canada to settle an enforcement action resulting from the carrier's "extreme delays" in refunding passengers who had tickets for flights to or from the U.S. at the beginning of the COVID-19 pandemic that were either canceled or significantly changed.
While the DOT announced the agreement as having a $4.5 million price tag for Air Canada, the actual fine assessed that's payable to the U.S. Treasury Department is $2 million, because $2.5 million is being credited to the carrier for some of the refunds that had been provided to customers with non-refundable tickets. As of Oct. 22, Air Canada had actually paid more than CAD $730 million ($575 million) in refunds to those eligible, and an additional CAD $10 million ($7.9 million) in voluntary refunds to those who were not eligible for a refund, DOT stated in the proposed settlement agreement.
The settlement is a small fraction of the initial $25.55 million fine that the DOT had proposed for Air Canada back in June. Still, the full $4.5 million agreement is the largest sum of money that the DOT's Office of Aviation Consumer Protection (OACP) has ever assessed against an airline.
"Today, the US Department of Transportation's OACP is holding airlines accountable by ensuring that they treat passengers fairly when flights are significantly changed or canceled," said Deputy Secretary of Transportation Polly Trottenberg in a statement. "The Department is committed to protecting airline consumers and ensuring that all passengers receive the timely refunds to which they are entitled."
In a statement, Air Canada highlighted the fact that they are only being fined $2 million, even though DOT initially proposed a fine of over $25 million.
"Air Canada and the DOT have agreed to settle this matter without prejudice or any finding of wrongdoing," the carrier said in a statement. "This agreement was entered into to avoid protracted litigation as Air Canada focuses, together with all stakeholders, on rebuilding following the pandemic."
"The DOT initially sought a US$25.5 million penalty and settled for US$4.5 million, minus US$2.5 million for refunds already paid to customers who would not have otherwise been entitled to such refunds," the statement continued. "The DOT has now begun a review of its regulations to bring the law relating to refunds in line with its interpretation. In the meantime, the DOT is asking carriers to voluntarily refund, something Air Canada began doing prior to the start of this action in June."
More: Act quickly: Air Canada relents, will finally refund canceled flights
Air Canada found itself in hot water when it stopped offering cash refunds for canceled flights after March 19, 2020, as the world was shutting down at the onset of the COVID-19 pandemic and travel plans were changing rapidly. The carrier instead offered passengers vouchers with strict rules. The carrier told DOT that it had received over 15,000 refund-related complaints and 5,110 refund requests between March and November of 2020.
Air Canada relented in April of 2021 after it received an aid package from the Government of Canada, offering refunds for nonrefundable tickets purchased before April 13, 2021, for travel on or after Feb. 1, 2020.
The proposed settlement must be approved by an Administrative Law Judge before it's finalized.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 3X | Earn 3X Miles on Delta purchases. |
| 1X | Earn 1X Miles on all other eligible purchases. |
Pros
- Delta SkyClub access when flying Delta
- Annual companion ticket for travel on Delta (upon renewal)
- Ability to earn MQDs through spending
- Various statement credits for eligible purchases
Cons
- Steep annual fee of $650
- Other Delta cobranded cards offer superior earning categories
- Earn 100,000 Bonus Miles after you spend $6,000 or more in purchases with your new Card within the first 6 months of Card Membership and an additional 25,000 bonus miles after you make an additional $3,000 in purchases on the Card within your first 6 months, starting from the date that your account is opened. Offer Ends 04/01/2026.
- Delta SkyMiles® Reserve American Express Card Members receive 15 Visits per Medallion® Year to the Delta Sky Club® when flying Delta and can unlock an unlimited number of Visits after spending $75,000 in purchases on your Card in a calendar year. Plus, you’ll receive four One-Time Guest Passes each Medallion Year so you can share the experience with family and friends when traveling Delta together.
- Enjoy complimentary access to The Centurion® Lounge in the U.S. and select international locations (as set forth on the Centurion Lounge Website), Sidecar by The Centurion® Lounge in the U.S. (see the Centurion Lounge Website for more information on Sidecar by The Centurion® Lounge availability), and Escape Lounges when flying on a Delta flight booked with the Delta SkyMiles® Reserve American Express Card. § To access Sidecar by The Centurion® Lounge, Card Members must arrive within 90 minutes of their departing flight (including layovers). To access The Centurion® Lounge, Card Members must arrive within 3 hours of their departing flight. Effective July 8, 2026, during a layover, Card Members must arrive within 5 hours of the connecting flight.
- Receive $2,500 Medallion® Qualification Dollars with MQD Headstart each Medallion Qualification Year and earn $1 MQD for each $10 in purchases on your Delta SkyMiles® Reserve American Express Card with MQD Boost to get closer to Status next Medallion Year.
- Enjoy a Companion Certificate on a Delta First, Delta Comfort, or Delta Main round-trip flight to select destinations each year after renewal of your Card. The Companion Certificate requires payment of government-imposed taxes and fees of between $22 and $250 (for itineraries with up to four flight segments). Baggage charges and other restrictions apply. Delta Basic experiences are not eligible for this benefit.
- $240 Resy Credit: When you use your Delta SkyMiles® Reserve American Express Card for eligible purchases with U.S. Resy restaurants, you can earn up to $20 each month in statement credits. Enrollment required.
- $120 Rideshare Credit: Earn up to $10 back in statement credits each month after you use your Delta SkyMiles® Reserve American Express Card to pay for U.S. rideshare purchases with select providers. Enrollment required.
- Delta SkyMiles® Reserve American Express Card Members get 15% off when using miles to book Award Travel on Delta flights through delta.com and the Fly Delta app. Discount not applicable to partner-operated flights or to taxes and fees.
- With your Delta SkyMiles® Reserve American Express Card, receive upgrade priority over others with the same Medallion tier, product and fare experience purchased, and Million Miler milestone when you fly with Delta.
- Earn 3X Miles on Delta purchases and earn 1X Miles on all other eligible purchases.
- No Foreign Transaction Fees. Enjoy international travel without additional fees on purchases made abroad.
- $650 Annual Fee.
- Apply with confidence. Know if you're approved for a Card with no impact to your credit score. If you're approved and you choose to accept this Card, your credit score may be impacted.
- Terms Apply.
- See Rates & Fees