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If you look more closely that’s not the case. If they pay the refunds, they get to subtract a portion of that from the fine. Dan has more detail and isn’t payw

• nfriedly 4y ago
  It sounds like that's only the case for "good-will refunds" where the airline wasn't otherwise obligated to pay the refund. > Frontier said it had issued about $100 million in what it described as “good-will refunds” that were not legally required. The airline will pay only $1 million of the $2.2 million fine because the Transportation Department credited it for providing refunds to passengers who canceled nonrefundable tickets early in the pandemic. But, either way, the DOT's main focus is on getting people the refunds. I added a bit more context to my first message to clarify that, but also the fact that the fine is ~1% of the owed refunds makes it fairly clear IMO.
  • sidewndr46 4y ago
    Businesses never admit that they are legally required to pay a refund. It would constitute a public material statement and open the flood gates to more refunds. For a publicly traded company this would probably actually be some sort of SEC violation as well. I can't tell you the number of times I've gotten a "one time refund" from the same companies over and over. From the perspective of a business any refund issued is done in good will. Otherwise it isn't a refund.
• invisible 4y ago
  Weird -- why not make the fine $604 million (or whatever they truly should owe in refunds) and allow all but, say, 4 million to be reduced?
  • 988747 4y ago
    That would create a weird dynamic: is it more beneficial to the airline to issue refunds to passengers, or is it better to give money directly to the DOT, which, as most government institutions, is probably underfunded and will appreciate the "donation"? Cost for the airline is the same if both cases, but indirectly funding DOT might win you some friends there :)