DOT Secures Nearly $1 Billion in Refunds to Airline Passengers Through New Enforcement Actions

The U.S. Department of Transportation (DOT) announced enforcement actions against Lufthansa, South African Airways, and KLM Royal Dutch Airways for extreme delays in providing more than $900 million in refunds owed to passengers due to flights cancelled or significantly changed in response to the impact of the COVID-19 pandemic. Under the consent orders, the three airlines are required to provide timely refunds to passengers when owed and to pay a civil penalty to the U.S. Treasury. The enforcement actions are part of DOT’s ongoing work to ensure passengers are treated fairly by airlines, which has already resulted in the largest airline fines in the Department’s history and nearly $4 billion returned to passengers in refunds and reimbursements.

“When a flight is cancelled or significantly changed, you shouldn’t have to fight with the airline to get their money back—and we’re holding airlines accountable when they fail to give passengers the refunds that they’re owed,” said U.S. Transportation Secretary Pete Buttigieg. “Today’s actions further demonstrate that passenger rights remain a top priority for the Biden-Harris Administration—and we are using all of our tools to improve air travel for everyone.”

In addition to the more than $900 million in refunds airlines have paid back, the Department announced today that it is assessing a total of $2.5 million in civil penalties against three airlines for extreme delays in providing refunds. A majority of the assessed fines will be collected in the form of payments to the U.S. Treasury, with the remainder credited on the basis of payments to passengers beyond the legal requirement.

The required refunds to passengers and the assessed penalties against airlines are:

• Lufthansa – $775 million in required refunds paid and a $1.1 million penalty
• KLM – $113.3 million in required refunds paid and a $1.1 million penalty
• South African Airways – $15.2 million in required refunds paid and a $300,000 penalty

Last month, DOT announced two final rules that require airlines to provide automatic cash refunds to passengers when owed and to protect consumers from costly surprise airline fees. These rules will significantly expand consumer protections in air travel, provide passengers an easier pathway to refunds when owed, and save consumers more than half a billion dollars every year in hidden and surprise junk fees. Provisions of the final rule on airline refund were fortified through the FAA Reauthorization Act of 2024 (Public Law 118-63) that President Biden signed into law on May 16, 2024.

DOT’s Historic Record of Consumer Protection Under the Biden-Harris Administration 

Under the Biden-Harris Administration, DOT has advanced the largest expansion of airline passenger rights, issued the biggest fines against airlines for failing consumers, and secured returns of more money to passengers in refunds and reimbursements than ever before in the Department’s history.

• In 2022, under Secretary Buttigieg’s guidance, DOT created an Airline Customer Service Dashboard known as FlightRights.gov to help airline passengers understand what they are entitled to receive when a delay or cancellation was within the airlines’ control and create standards that the Department can enforce. Now all 10 major U.S. airlines guarantee free rebooking and meals, and nine guarantee hotel accommodations when an airline issue causes a significant delay or cancellation. These are new commitments the airlines added to their customer service plans that DOT can legally ensure they adhere to and are displayed on flightrights.gov.
• Since President Biden took office, DOT has helped oversee the return of almost $4 billion in refunds and reimbursements owed to airline passengers – including more than $600 million to passengers affected by the Southwest Airlines holiday meltdown in 2022.
• DOT has issued more than $166 million in penalties against airlines for consumer protection violations. Between 1996 and 2020, DOT collectively issued less than $71 million in penalties against airlines for consumer protection violations.
• DOT recently launched a new partnership with a bipartisan group of state attorneys general to fast-track the review of consumer complaints, hold airlines accountable, and protect the rights of the traveling public.
• In 2023, the flight cancellation rate in the U.S. was a record low at under 1.2% – the lowest rate of flight cancellations in over 10 years despite a record amount of air travel.
• DOT is undertaking its first ever industry-wide review of airline privacy practices and its first review of airline loyalty programs.

In addition to finalizing the rules to require automatic refunds and protect consumers from surprise fees, DOT is also pursuing rulemakings that would:

• Propose to ban family seating junk fees and guarantee that parents can sit with their children for no extra charge when they fly. Before President Biden and Secretary Buttigieg pressed airlines last year, no airline committed to guaranteeing fee-free family seating. Now, four airlines guarantee fee-free family seating, as the Department is working on its family seating junk fee ban proposal.
• Propose to make passenger compensation and amenities mandatory so that travelers are taken care of when airlines cause flight delays or cancellations.
• Expand the rights for passengers who use wheelchairs and ensure that they can travel safely and with dignity. The comment period on this proposed rule will close on June 12, 2024.

All of the consent orders issued today are available at www.regulations.gov, docket number DOT-OST-2024-0001.

Information about airline passenger rights, as well as DOT’s rules, guidance and orders, can be found at https://www.transportation.gov/airconsumer.

Consumers may file an airline complaint with the Department here.