© Reuters. FILE PHOTO: A passenger airplane arrives throughout a basic quarantine amid the unfold of the coronavirus illness (COVID-19), on the Arturo Merino Benitez Worldwide Airport, in Santiago, Chile Could 26, 2020. REUTERS/Ivan Alvarado
By David Shepardson
WASHINGTON (Reuters) -The U.S. Transportation Division (USDOT) stated on Monday it fined LATAM Airways (OTC:) Group SA $1 million after the airline and associates routinely failed to offer well timed refunds to passengers for U.S. flights.
The division stated since March 2020, it obtained greater than 750 complaints alleging LATAM, the largest service in Latin America, failed to offer well timed refunds after cancelling flights to or from the US. USDOT stated it took LATAM greater than 100 days to course of 1000’s of refund requests to fee.
LATAM stated in a press release it agreed to the $1 million high-quality as a part of a consent order. It added the high-quality was “a part of an ongoing USDOT audit of quite a few airways that function into or throughout the U.S. which were fined for a similar motive, delays in refunds for unused tickets on flights canceled through the pandemic.”
LATAM invested $2 million in a brand new digital platform to course of refunds quicker and is investing one other $2 million this 12 months on refund processing efforts.
Due to COVID-19, LATAM needed to cancel greater than 1,100 flights each day and noticed refund requests quadrupled, the airline advised USDOT noting it filed for Chapter 11 chapter and radically downsized the corporate, leading to layoffs of 1000’s of workers.
LATAM issued greater than $62 million in refunds for the reason that starting of the pandemic for canceled flights, the corporate advised USDOT.
In January, USDOT stated it deliberate to hunt greater penalties for airways violating client safety guidelines, saying they had been mandatory to discourage future violations. USDOT vowed to “deter future misconduct by looking for greater penalties that might not be seen as merely a value of doing enterprise.”
USDOT fines for airline client violations have usually been a fraction of potential penalties. Final 12 months, Air Canada agreed to a $4.5 million settlement to resolve a USDOT investigation into claims 1000’s of air passenger refunds had been delayed. USDOT initially sought a $25.5 million penalty.
Air Canada bought $2.5 million credited for passenger refunds and paid $2 million in fines.
In November, USDOT imposed penalties on one other six airways totaling simply $7.25 million after they agreed to problem $622 million in passenger refunds.
