The U.S. Department of Transportation (DOT) has assessed fines against KLM, Lufthansa and South African Airways for extreme delays in paying refunds for canceled flights during the early part of the pandemic.
Under consent decrees entered into by the airlines, KLM and Lufthansa will each be assessed a $1.1 million penalty and South African Airways $300,000.
KLM and Lufthansa will each actually pay $550,000 to the U.S. Treasury. The DOT has agreed to forego the other $550,000 in fines for each carrier in consideration for them providing refunds to travelers who were not entitled to one under U.S. law.
Beginning with the March 2020 start of the pandemic, the DOT has received 948 complaints regarding KLM's handling of refund requests; more than 2,500 complaints in regard to Lufthansa refunds; and more than 400 refund-related complaints against South African Airways.
Under U.S. law, airlines must pay refunds when requested for flights that airlines either cancel or significantly delay. Beginning this October, carriers will be required to proactively offer refunds under those circumstances.