Dynamic International Airways, which left numerous passengers stranded in Guyana and New York late last year, has been ordered by the United States Department of Transportation (DoT) to pay US$120,000 in penalties for cancelling several flights, failing to notify passengers in a timely manner and refunding them.
Dynamic has provided several reasons for each of those problems that plagued passengers during September, October and November, 2016.
The DoT warned that unspecified action would be taken if there are future violations. ” Failure to comply with this cease and desist provision may subject Dynamic International Airways, LLC and its successors and assignees to further enforcement action.”
The consent order served by DoT on April 13, 2017 did not name Guyana or any other destination where the passengers were affected, but that regulatory authority said the complaints received were from passengers who used the public charter service to and from destinations outside the US. The Guyana Civil Aviation Authority (GCAA) earlier this year summoned Dynamic Airways to discuss the adverse impact the cancellations had been having on passengers.
Assistant General Counsel for Aviation Enforcement and Proceedings at DoT, Blane A. Workie warned Dynamic that if further violations continue, enforcement action would be taken against the carrier.
DoT said a probe was triggered after its Department’s Aviation Consumer Protection Division received a “significant increase” in the number of complaints. “In many instances, Dynamic failed to provide refunds in a timely manner to passengers affected by cancelled flights, as required…. In numerous cases, consumers had to wait for months to receive a refund.
The Enforcement Office also found that in several cases, Dynamic also 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,” the American transportation regulatory authority said in the order.
The US agency said those violations prohibit unfair and deceptive practices and unfair methods of competition and also violate a cease and desist provision of an order issued on March 3, 2016.
Dynamic Airways, according to order, has since put systems in place to adequately notify passengers of flight cancellations. “To address the cancellation notices issue, Dynamic advises that it now requires travel agents that book passengers on Dynamic flights to provide Dynamic with passenger’s contact information. Dynamic states that it also revised its procedures to provide for timely issuance of cancellation notices to travel agents in the first instance following a flight cancellation,” the carrier was reported to have told the proceedings.
The DoT said most of the problems ranged from 20 days to as much as 140 days.
Without admitting or denying the violations, Dynamic struck a compromise deal with the DoT that will see it paying a civil penalty of US$120,000, with half to be paid in six installments- the first to be paid within 30 days of the issuance of the order and the remaining five to be paid in 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.
Reasons given for the “numerous flight cancellations in a relatively short amount of time”, according to the DoT, included the consolidation of its flight operations in the summer of 2016 to focus on a few key markets to improve the service. That , the carrier stated, in turn resulted in an unusually large number of refunds that needed to be processed.
The airline said the flight cancellations caused by the consolidation of flight operations had occurred at the same time that it was consolidating its corporate operations – a move that Dynamic states affected several offices around the United States and resulted in the overtaxing of their customer service staff.
With regard to the prolonged delay in processing refunds, Dynamic asserted that situation was exacerbated by some passengers making double refund requests, one directly from Dynamic and one via a charge-back through the passenger’s credit card. “Dynamic alleges 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. Dynamic states these additional measures, compelled by certain passengers’ own actions, necessarily hindered Dynamic’s ability to make timely refunds.”
The airline further explained that many of its passengers book through travel agents, and “Dynamic believes many of its cancellation notices either were not sent to travel agents in a timely manner or where not forwarded by travel agents to passengers in a timely manner or at all.”
Dynamic Airways has 10 days within which to file for a review or DoT decides on its own to conduct a review.