DALLAS — The LATAM Airlines Group and its affiliates routinely failed to give passengers timely refunds for flights to the United States, according to the U.S. Transportation Department (DOT), which announced the fine on Monday.
According to the department, it has received more than 750 complaints since March 2020 alleging that LATAM (LA), the largest airline in Latin America, failed to promptly refund passengers for canceled flights to or from the United States. The DOT reported that LA needed more than 100 days to handle thousands of refund requests.
LATAM stated in a statement that as part of a consent order, it accepted the US$1m fine. The penalty, it was further stated, was “part of an ongoing USDOT audit of numerous airlines that operate into or within the U.S. that have been fined for the same reason, delays in refunds for unused tickets on flights canceled during the pandemic.”
An Expensive Post-COVID Recovery
LATAM informed the DOT that as a result of COVID-19, it had to cancel more than 1,100 flights every day and that refund requests had quadrupled. The airline also noted that it had to file for Chapter 11 bankruptcy and had drastically reduced its workforce, which led to thousands of layoffs.
According to a Reuters report, since the start of the pandemic, LA has refunded more than US$62m for canceled flights, the company informed DOT. To expedite the processing of refunds, LA invested US$2m in a new digital platform and will add an additional US$2m this year.
The DOT announced in January that it intended to seek harsher sanctions against airlines that disobey consumer protection laws, claiming that such measures were necessary to prevent further infractions.
Since the 2022 summer of travel chaos, the DOT has imposed penalties on eight airlines totaling almost US$10m after they agreed to issue more than US$600m in passenger refunds.
Featured image: LATAM Airlines Airbus A320s. Photo: João Pedro Santoro/Airways