The U.S. Transportation Department has fined Latam Airlines $1 million for failing to provide timely refunds during the pandemic.
The South American airline has agreed to make the payment as part of a consent order and in order to avoid litigation.
According to the March 22 consent order, Latam adhered to a policy from March 2020 to November 2021 that required customers who had requested a refund for a canceled flight to obtain a travel voucher first, and then exchange that voucher for cash via a bank transfer.
The process was lengthy, said the DOT, with thousands of refund requests taking more than 100 days to complete.
“As a result, thousands of consumers experienced significant harm from the extreme delay in receiving their refunds,” the department said.
In a statement Tuesday, Latam noted it is one of several airlines that the DOT has fined for not providing timely refunds during the pandemic.
“Despite the difficulties imposed by the pandemic, Latam never questioned its obligation to provide refunds to passengers on canceled flights to and from the US,” the airline said.
Latam emerged from a 29-month bankruptcy process last November.
The carrier also noted that it has implemented a new platform on its website to more expeditiously process refunds, with more improvements on the way.
Latam told the DOT that it has provided $62 million in refunds for U.S. flight cancellations since the beginning of the pandemic.
So far, the DOT has fined nine airlines for pandemic-time refund violations. Frontier is the only U.S. carrier to have received such a penalty.
DOT secretary Pete Buttigieg said Tuesday that six investigations are still open.
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