U.S. seeks $25M from Air Canada for "extreme delays" in giving refunds

The U.S. Department of Transportation said Tuesday it is seeking a $25.5 million fine from Air Canada for failing to provide timely refunds to thousands of customers.

Why it matters: The COVID-19 pandemic forced airlines to cancel or delay flights, causing refund requests to spike.

What they're saying: Since March 1, 2020, the DOT's Office of Aviation Consumer Protection received more than 6,000 complains from Air Canada customers who "describe having been denied refunds for flights that the carrier cancelled or significantly changed," the agency said.

• "When a carrier cancels or significantly changes a flight to or from the United States, the airline is responsible for providing refunds, upon request, according to U.S. law. Airlines have seven days to refund passengers from the date of the request for flights purchased with a credit card and twenty days for flights purchased with cash."
• "In the complaint filed with the ALJ, OACP asserts that Air Canada has committed a minimum of 5,110 violations and passengers waited anywhere from 5 months to 13 months to receive refunds."

The other side: Air Canada says the DoT's claim "has no merit," and the airline "will vigorously challenge the proceedings," according to Reuters.

Zoom out: The DoT said it is also investigating refund-related practices with other airlines, including U.S. companies.

• Air Canada can contest the potential fine.