Late refunds: Lufthansa to pay millions in fines in US

The US Department of Transportation took action against six airlines in November 2022. Frontier Airlines, Air India, Tap, Aeromexico, El Al and Avianca were not only required to issue refunds but also to pay fines because they took so long to issue refunds for canceled or significantly altered flights.

Now the largest German airline is also affected. “Today, the U.S. Department of Transportation (DOT) announced enforcement actions against Lufthansa, South African Airways, and KLM Royal Dutch Airways in response to the impact of canceled flights that resulted in serious delays in refunding more than $900 million to passengers. Changed due to the Covid-19 pandemic” The ministry announced on Monday (June 3).

Lufthansa offers the most 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. “Also, we hold airlines accountable if they fail to refund the money they owe to passengers.” Lufthansa, KLM and South African Airways must pay civil penalties totaling $2.5 million for “excessive delays” in refunding passengers.

Lufthansa is responsible for $775 million in required refunds and $1.1 million in penalties. KLM owes $113.3 million in restitution and $1.1 million in penalties. The South African was awarded $15.2 million in compensation and a $300,000 fine.

Refund already paid, half will be good

“Most of the fines imposed will be collected in the form of payments to the U.S. Treasury, and the remainder will be credited to passengers based on overpayments over the legal obligation,” the Department of Transportation explains: “The final rule for refunding airline tickets was strengthened by the FAA Reauthorization Act of 2024 (Public Law 118-63), which Signed by President Biden on May 16, 2024.

Lufthansa says it has already repaid $775 million to Aerotelegraph. “Lufthansa has refunded all the money we owe,” an airline spokeswoman said. “The delay in payment sanctioned by DOT is due to historically unprecedented levels of reimbursement during the Covid pandemic.”

The government has tightened controls on airlines

Lufthansa has so far paid half of the fine and is due to pay the second half over the next 30 days. “Compared to other airlines in the US, the fines do not deviate from DOT standards,” insists a German airline spokesperson.

In 2022, the DOT created the Flightrights.gov portal to explain what rights passengers have when delays or cancellations are controlled by airlines and to create standards the department can implement. In April 2024, it partnered with state attorneys general to expedite the review of consumer complaints.