American Airlines was found to have overcharged passengers on certain taxes, leading the airline to refund nearly $1 million to AAdvantage members, according to a new United States Department of Transportation order.
The overcharges involved children’s award tickets, meaning tickets redeemed with AAdvantage miles that still required travelers to pay taxes and fees. In some countries, children are charged lower departure or passenger taxes than adults. DOT found that American incorrectly charged the adult rate for child passengers traveling from 14 jurisdictions.
The agency also found that American violated the full-fare rule, which requires that mandatory charges, such as government taxes, accurately reflect the cost of the item charged to each passenger. American was warned, but DOT chose not to take enforcement action because of the corrective steps American had taken and the amount of time that had passed.
TheTravel reached out to American Airlines for comment but was still waiting to hear back at the time of publishing.
American Airlines Charged Some Child Award Travelers The Adult Tax Rate
The case goes back more than a decade, according to View From The Wing. On April 17, 2015, traveler Mike Borsetti filed a formal complaint with the DOT alleging that American violated federal consumer protection rules by charging adult tax rates on certain reward flights booked for child passengers.
The final number wasn’t small, either. DOT said American issued refunds to all passengers affected by the overcharges, totaling more than $900,000.
The original complaint focused on award travel from Italy, Japan, and the United Kingdom. Borsetti said that American charged him the adult Italian Embarkation Tax for a child traveling with him, even though the tax was 50% lower for children ages 2 to 12.
He also said American charged the adult Japan Government Passenger Services Facilities Charge (J-PSFC), even though the charge was 50% lower for children. For the U.K., he said American displayed the same taxes and fees for two adults as it did for one adult and one child, despite lower child Air Passenger Duty in certain cases.
American acknowledged some of the problem in 2015. The airline said an AA.com computer program didn’t distinguish between adults and children traveling on award tickets leaving from airports in Italy. It also acknowledged overcharging U.K. Air Passenger Duty on certain AAdvantage tickets because of a programming error.
American Airlines disputed the Japan issue. According to the DOT order, the carrier argued that the lower J-PSFC rate applied only when a child was traveling on a “child fare ticket” and said it did not consider award travel for children to be a child fare ticket.
DOT’s Office of Aviation Consumer Protection eventually found the issue was bigger than the original three-country complaint.
American Airlines’ Overcharges Reached 14 Jurisdictions
The DOT found that American incorrectly charged adult tax rates for child award passengers traveling from 14 jurisdictions:
- Antigua and Barbuda
- Australia
- Belize
- Cayman Islands
- China
- Colombia
- Greece
- Hong Kong
- Italy
- Japan
- Saint Kitts and Nevis
- Saint Lucia
- Trinidad and Tobago
- United Kingdom
DOT said American Airlines remitted the over-collected taxes to the relevant foreign governments. The airline didn’t retrieve the overpaid amounts from those governments except when individual passengers requested refunds, in which case the airline submitted requests on the passenger’s behalf.
The DOT order says the company has since created processes in its Revenue Management and Revenue Accounting departments to avoid similar issues. The agency also said American refunded all affected passengers.
DOT Says American Airlines Violated The Full-Fare Rule
DOT found that American violated 14 CFR 399.84, the full-fare advertising rule, as it existed at the time.
That rule allowed airlines to show government taxes separately, but those charges couldn’t be false or misleading and had to accurately reflect the cost of the mandatory charge on a per-passenger basis. The DOT noted that violations of the full-fare rule are considered violations of the federal prohibition on unfair and deceptive practices.
Essentially, an airline can’t quote a child’s ticket with an adult tax if the child tax is lower.
The agency’s order says DOT’s Office of Aviation Consumer Protection has found that overcharging taxes violates the full-fare rule. After reviewing the complaint and American’s answer, DOT concluded American violated the rule in this case.
“After carefully reviewing the information presented in the Complaint and the Answer, we find that American violated 14 CFR 399.84 in this instance. However, as American has implemented corrective measures, and because of the significant amount of time that has passed since the incident occurred, we have determined that enforcement action is not warranted. American is warned in this instance,” the order stated.
Still, the punishment was limited. DOT dismissed the complaint, warned the airline, and said enforcement action wasn’t warranted because American had already taken steps to rectify the problem and “significant” time had passed since the incident.
The Complaint Took 11 Years To Reach This Point
Borsetti filed the complaint in April 2015. But DOT’s dismissal order was issued on July 2, 2026. That’s more than 11 years later.
View From The Wing criticized the delay and noted that American Airlines said the issue was fixed years ago. The outlet also reported that the carrier continued to have problems with U.K. coach awards in 2016, after the period DOT described.
The DOT order itself states that American stopped overcollecting the taxes by May 2015 and has now refunded more than $900,000. However, it doesn’t explain in detail why the complaint took more than a decade to resolve.
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Comments from readers about the overcharging case |
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“The DOT isn’t enough. We need bipartisan legislation to reign-in the greed of corporations in the transportation industry.” |
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“I had at least a dozen J & F award flights NYC to/from/via TYO, HKG & PVG in which I traveled with a lap infant and/or child pax between 2009 and 2016. I also had Y to J SWUs for same pax & routes. I also have a bunch of HKG, PVG & TYO to elsewhere in asia awards for same pax. I haven’t had a penny refunded to me. I likely used my long gone SPG card back in those days. I can probably find PNRs.” |
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“So, Obama, Trump (part I), and Biden administrations couldn’t fix this. True bipartisan failure.” |
For travelers, though, it raises the question: How many affected passengers knew they had been overcharged?
Award-ticket taxes can be confusing even for frequent flyers. A passenger redeeming miles for a child may see taxes and fees on the final checkout page and assume the amount is correct. Unless a traveler already knows a country’s child-tax rule, the overcharge may never stand out.
How Families Can Check Award Ticket Taxes
Most travelers won’t be able to reconstruct every old award ticket from a decade ago. But families booking new award travel can still avoid similar surprises.
The first step is to compare the taxes for adults and children before payment when booking international award travel. If the country charges a lower child tax, the checkout page should reflect that difference. If one adult and one child show the same taxes as two adults, take screenshots before buying the tickets.
Second, keep receipts. American Airlines says ticket and fee receipts are available for a limited period through its receipts and refunds page. Travelers booking with miles should save the confirmation email, tax-and-fee breakdown, passenger ages, and any refund correspondence.
Third, ask the airline to explain any mandatory tax that looks wrong. Be specific when reaching out, and identify the child passenger, route, date, tax name, amount charged, and the lower child rate that should have applied.
If the airline doesn’t resolve the issue, travelers can file a complaint with DOT’s Office of Aviation Consumer Protection. DOT says it uses complaints to spot trends, direct airlines to respond, and support enforcement when warranted.
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