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The US Department of Transportation (DOT) has announced fines totaling $2.5 million against Lufthansa, KLM Royal Dutch Airlines, and South African Airways.

These penalties are due to significant delays in issuing over $900 million in refunds owed to passengers whose flights were disrupted by the COVID-19 pandemic. According to DOT, thousands of airline customers were forced to wait months for their refunds.

Lufthansa and KLM were each fined $1.1 million, with $550,000 credited for refunds of nonrefundable tickets on US flights. South African Airways received a $300,000 penalty.

Digging Deeper:
In 2020, it took over 100 days to process thousands of refund requests from Lufthansa passengers on US flights. Lufthansa stated it had fulfilled all required refunds and attributed the delay to the unprecedented number of refund requests during the pandemic. The airline reported providing $5.3 billion in refunds from March 2020 to September 2022, including $802 million to US customers.

KLM also faced significant challenges, citing staffing and technical issues as reasons for the delay in processing refund requests. Despite these issues, KLM claimed it had one of the most customer-friendly refund policies in the industry and refunded $84.15 million to US customers.

South African Airways was fined after it received over 400 complaints related to delayed refunds. According to internal documents, the airline struggled financially to issue refunds because the company faced liquidation before entering bankruptcy protection in 2019.