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Comment by nfriedly | Hacker News Reader

In this case, it sounds like the airlines are paying the fine AND the refunds.

> The department’s intervention contributed to the airlines’ issuing more than $600 million in refunds, it said.

> ...

> [United States Secretary of Transportation] Mr. Buttigieg said that, while the department was more focused on ensuring that refunds were paid than on collecting fines, he had nonetheless asked staff to look into whether the penalties were sufficient to prevent such behavior in the future.

> “This really shouldn’t be happening in the first place,” he said. “And we’ll continue ratcheting up the penalty side until we’re seeing less of this kind of behavior to begin with.”

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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 paywalled: https://www.dansdeals.com/more/news/airline-news/dot-issues-...

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.

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.

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?

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 :)

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