Air Canada agrees to pay settlement over delayed refunds

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When the DOT brought the Air Canada case in June, it had sought a $25.6 million penalty.
When the DOT brought the Air Canada case in June, it had sought a $25.6 million penalty. Photo Credit: Air Canada

Air Canada has agreed to pay a $4.5 million settlement in a case brought by the Transportation Department's Office of Consumer Aviation Protection. 

If approved by a federal administrative court, the settlement would resolve the DOT's charges of long delays in providing required refunds to thousands of Air Canada customers for flights to or from the U.S. that were canceled as a result of the Covid-19 pandemic.

The agreement, the DOT, said marks the highest amount the Office of Consumer Aviation Protection has ever assessed against an airline. 

The proposed settlement states that Air Canada is entering the agreement to avoid protracted litigation. The airline is not admitting to violations of the law. 

The DOT brought the case in June, seeking a fine of $25.6 million

Under the settlement, Air Canada would pay $2 million to the U.S. Treasury, while the remaining $2.5 million would be credited to the carrier in consideration of refunds that it provided to passengers who chose not to travel even though their flights were not canceled. 

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