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Delayed refunds: Lufthansa has to pay a multi-million dollar fine in the USA

Delayed refunds: Lufthansa has to pay a multi-million dollar fine in the USA

The US Department of Transportation fined Lufthansa more than $1 million. The reason: “severe delay” in passenger refunds.

As early as November 2022, the US Department of Transportation took action against six airlines. Because they took too long to issue refunds for canceled or significantly changed flights, Frontier Airlines, Air India, TAP, Aeromexico, El Al and Avianca not only had to issue refunds but also had to pay fines.

Now Germany's largest airline is also being hit, among others. “Today, the US Department of Transportation (DOT) announced enforcement actions against Lufthansa, South African Airways and KLM Royal Dutch Airlines due to severe delays in disbursing more than $900 million in refunds to travelers due to flights being canceled or significantly canceled in response to the impact.” . The situation has changed due to the COVID-19 pandemic, the ministry announced on Monday (June 3).

Lufthansa has the highest number of refunds

“If a flight is canceled or significantly changed, you don't have to fight the airline for your money,” Transportation Secretary Pete Buttigieg said. “We hold airlines accountable when they fail to provide passengers with the refunds to which they are entitled.” Lufthansa, KLM and South African Airways must now pay a total of $2.5 million in civil fines due to “severe delays” in refunding passengers.

Lufthansa is responsible for the required refunds of $775 million and a fine of $1.1 million. KLM owes $113.3 million in compensation and a $1.1 million fine. For South Africa, compensation amounts to $15.2 million and fines of $300,000.

Refunds already paid, half fine

“The majority of fines imposed will be collected in the form of payments to the U.S. Department of the Treasury, and the remainder will be credited on the basis of payments to passengers that exceed the legal obligation,” the Department of Transportation explains, stressing: “Provisions of the Airline Ticket Refunds Final Rule are strengthened by the FAA Reauthorization Act of 2014.” 2024 (Public Law 118-63), signed by President Biden on May 16, 2024.

Lufthansa told aeroTELEGRAPH that it has already paid $775 million in full refunds. An airline spokeswoman said: “Lufthansa has issued all refunds that we had to pay.” “The delay in payments approved by the Department of Transportation is due solely to the historically unique level of payment during the COVID pandemic.”

The government has tightened restrictions on airlines

Lufthansa has so far paid half of the penalty, and the second half should follow within the next 30 days. A spokeswoman for the German airline confirmed: “Compared to other airlines in the United States, the fine does not deviate from the standards of the Ministry of Transport.”

In 2022, the Department of Transportation created the Flightrights.gov portal to explain to travelers what they are entitled to when a delay or cancellation is within the airlines' control and to create standards the department can implement. In April 2024, it also partnered with state attorneys general to expedite the review of consumer complaints.