Airlines Fined $2.5M for Delaying COVID-19 Refunds

The Imposed Fine

The fine, totalling $2.5 million, has been imposed in civil penalties by the US Department of Transportation against Lufthansa, KLM Royal Dutch Airlines, and South African Airways. According to the department, the reason for the fine is the delay in providing passengers with refunds of more than $900 million that they are owed “due to flights disrupted by the COVID-19 pandemic after thousands of airline customers were forced to wait months.” The new fine will be in addition to the amount the airlines already owe the customers.

As reported by Reuters, KLM Royal Dutch Airlines and Lufthansa were slapped with a $1.1 million penalty, and both the airlines were credited $550,000 for refunds for non-refundable tickets on US flights. The South African Airways, on the other hand, was given a fine of $300,000.

“When a flight is cancelled or significantly changed, you shouldn’t have to fight with the airline to get your money back, and we are holding airlines accountable when they fail to give passengers the refunds that they are owed,” stated Pete Buttigieg, US Transportation Secretary.

Though KLM and South Africa Airways have not yet commented on the fine, Lufthansa said, in a statement, that it has “made all the required refunds and the delay in payment sanctioned by the USDOT is solely due to the historically unprecedented level of refunds during the COVID pandemic.” Lufthansa reported that the pandemic cancelled thousands of its flights, overwhelming it with refund requests that put it at risk of insolvency. The airline provided $5.3 billion in refunds from March 2020 to September 2022.