US imposes $2.5m in airline penalties over delayed COVID refunds

The U.S. Transportation Department (USDOT) said on Monday it has imposed $2.5m in civil penalties in total against Lufthansa, Air France unit KLM Royal Dutch Airways and South African Airways. The civil penalties, the department said, are for significant delays in providing more than $900m in refunds owed to passengers due to flights disrupted by the COVID-19 pandemic and after thousands of airline customers were forced to wait months. Of the $1.1m penalties imposed on KLM and Lufthansa, each carrier was credited $550,000 for refunds for non-refundable tickets on U.S. flights. In 2022, Transportation Secretary Pete Buttigieg said the U.S. government had completed 10 airline investigations into delayed pandemic passenger refunds and that 10 more were pending. In 2020, thousands of refund requests from Lufthansa passengers on US flights took longer than 100 days to process. Lufthansa said it has made all 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." KLM and South African Airways did not immediately comment. Lufthansa told USDOT that due to unforeseeable COVID effects, it was forced to cancel thousands of flights and inundated with refund requests, putting it at risk of insolvency. It said it was getting "equivalent to the workload of two-and-a-half months coming in every day" of refund requests. The German carrier said between March 2020 and September 2022, it provided $5.3b in refunds, including $802mi to U.S. customers.<br/>