U.S. fines IAG’s British Airways $1.1 million

on Jun 2, 2023
  • DOT says BA didn't refund passengers for cancelled flights during COVID.
  • British Airways denies the U.S. Department of Transportation's claims.
  • IAG stock is up more than 20% versus the start of the year at writing.

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International Consolidated Airlines Group S.A. (LON: IAG) is in focus today after the U.S. government inflicted a $1.1 million fine on British Airways.

DOT received over 1,200 complaints against BA

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On Friday, the U.S. Transportation Department said the air carrier did not refund its passengers for flights to and from the United States that were either cancelled or rescheduled during the pandemic.

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Passengers, the DOT added, were unable to connect with the customer service staff to discuss refund options.

There was also no way to submit a refund request through the carrier’s website during this period. It [fine] establishes a strong deterrent to future similar unlawful practices.

In total, the department said it had received over 1,200 complaints against the U.K.’s flagship airline. Last week, British Airways had to cancel dozens of flights due to an IT problem.

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British Airways responds to the penalty

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British Airways denied the DOT claims on Friday. It also confirmed that it has paid over five million refunds to passengers since the start of the COVID pandemic.

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We acted lawfully at all times and offered customers the flexibility of rebooking travel on different dates, or claiming a refund if their flights were cancelled.

It did, in fact, make $550,000 worth of refunds voluntarily to customers with non-refundable tickets. Last month, British Airways-parent IAG reported a strong first quarter and raised its profit guidance for the full year.

At writing, shares of the multinational airline holding company are up more than 20% versus the start of the year.

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