TAP Air Portugal has confirmed that it has completed refunds to its U.S. customers, resolving an issue that led to a fine from U.S. authorities. The U.S. Department of Transportation (DoT) had initially fined the airline one million euros ($1.1 million) for delays in processing refunds for flights cancelled or significantly altered since the beginning of the Covid-19 pandemic. This affected a substantial amount of money, with total refunds reaching over 122 million euros.
The core of the issue was the delay in returning money to passengers for flights disrupted during the pandemic. U.S. regulations mandate timely refunds to protect consumers, and the DoT found that TAP Air Portugal had fallen short of these standards. Several airlines faced similar scrutiny from the DoT for slow refund processes, a consequence of the unprecedented disruptions caused by the global health crisis.
In a statement provided to Lusa news agency, TAP Air Portugal explained the difficulties they faced. Prior to the pandemic, their refund system, largely manual, was adequate. However, the pandemic brought an “avalanche of reimbursement requests” at a time when their workforce was reduced by 90%. This combination of factors overwhelmed their existing system, leading to delays in processing the “massive and unprecedented requests,” which were often further complicated by intricate booking arrangements and varied payment methods. The airline acknowledged their inability to handle the volume of requests in a timely manner during this period.
However, TAP Air Portugal emphasized that they took the DoT rules seriously and were committed to compliance. As their financial situation improved, they prioritized hiring more staff and invested in “implementing automated solutions to facilitate refunds.” These measures were aimed at streamlining the refund process and ensuring quicker reimbursements for passengers in the future. TAP stated that all due refunds have now been “paid and accounted for,” signifying the resolution of the issue that prompted the DoT investigation.
In a subsequent development, the U.S. Department of Transportation acknowledged TAP’s efforts to rectify the situation. Recognizing that the airline had completed the full refunds, even to some passengers who might not have been strictly entitled to them, and considering the challenging circumstances of the pandemic, the DoT reduced the initial fine. The fine was nearly halved, decreasing from one million euros to approximately 550,000 euros. This reduction reflects the DoT’s recognition of TAP’s “good faith efforts” and the eventual resolution of the passenger refund delays, confirming that the significant sum of 122 million euros in dollars equivalent has indeed been returned to customers.
