Dynamic International Airways has found itself in the hot seat once again and this time, it has been fined US$120,000 ($25m) by the United States Department of Transportation (DoT) for failure to provide prompt refunds to passengers after flight cancellations, and failure to promptly notify passengers of the cancellations.
In the past, Dynamic Airways, a certified air carrier based in Greensboro, North Carolina, which is handled locally by the Roraima Group of Companies, has faced intense scrutiny over repeated delays and cancellation of flights
Several attempts to contact Dynamic’s local counterpart for a comment on the issue were unsuccessful.
Meanwhile, documents seen by this newspaper reveal that the airline was last Thursday served with a consent order from the DoT, which also states that the Dynamic’s failure to promptly notify passengers of flight cancellations violates the cease and desist provision made in March 2016.
Further, the order directed Dynamic to cease and desist from future violations of the aforementioned regulations and statutes and Order, and assessed the carrier a compromise civil penalty of US$120,000.
“Based on a significant increase of consumer complaints filed with the Department’s Aviation Consumer Protection Division against Dynamic in 2016, the Department’s Office of Aviation Enforcement and Proceedings (Enforcement Office) conducted an investigation of these complaints and found that in many instances, Dynamic failed to provide refunds in a timely manner to passengers affected by cancelled flights, as is required,” the order stated.
It was further noted that in numerous cases, consumers had to wait for months to receive a refund. Similarly, the Enforcement Office also found that in several cases, Dynamic violated section 380.12(b) by failing to provide written notice to passengers after cancellations more than ten days out of their return flights.
As a result, some passengers arrived at airports and were forced to purchase separate tickets from other airlines at the last minute.
As a certificated carrier, Dynamic is required to comply with the Department’s reporting requirements.
“During 2016, Dynamic consistently failed to file in a timely manner applicable monthly and quarterly financial reports with the Department’s Bureau of Transportation Statistics as required by Sections 23-25 of Part 241,” the order stated.
However, by way of mitigation and explanation, Dynamic states that it had consolidated its flight operations in the summer of 2016 to focus on a few key markets to improve service which resulted in numerous flight cancellations in a relatively short amount of time.
This in turn also caused an unusually large number of refunds that needed to be processed.
According to the document, Dynamic says it has since brought on additional personnel to address the refunds issue.
“Dynamic asserts that this situation was exacerbated by some passengers making double refund requests, one directly from Dynamic and one via a chargeback through the passenger’s credit card… Dynamic alleged that this practice resulted in Dynamic, Dynamic’s escrow bank, and Dynamic’s credit card processor undertaking repeated lengthy reconciliations of passenger funds in escrow,” the document disclosed.
Nevertheless, DoT’s Enforcement Office said it carefully considered the information provided by Dynamic and continues to believe that enforcement action is warranted.
“In order to avoid litigation, the Enforcement Office and Dynamic have reached a settlement of this matter, without admitting or denying the violations alleged in this order. This compromise assessment is appropriate considering the nature and extent of the violations described herein and serves the public interest,” DoT explained in its order.
“It represents a strong deterrent to future noncompliance with the Department’s requirements pertaining to public charters and reporting of financial data,” it added.
As stipulated by the order, the airline will be required to pay half of the hefty fine in six instalments, the first of which is to be paid within 30 days of the issuance of the order, and the remaining five to be paid in tranches of US$10,000 every 30 days. The remaining US$60,000 will have to be paid if Dynamic violates the cease-and-desist order within one year from now, or fails to comply with the payment provisions.
In addition, the consent order noted that Dynamic had paid US$100,000, the portion of the civil penalty assessed in Order 2016-3-23 that was to have been suspended. That amount became due and payable when Dynamic violated the cease and desist provision of Order 2016-3-23, as provided for in the instant order.
