US Department Penalizes 3 Airlines With $2.5M In Fines For Slow COVID-19 Refunds
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 04 2024
0mins
Source: Benzinga
U.S. Transportation Department Penalties:
- The U.S. Transportation Department is imposing $2.5 million in civil penalties on Lufthansa, KLM, and South African Airways for delayed refunds to passengers due to COVID-19 flight disruptions.
- These penalties are a result of delays in providing over $900 million in refunds to affected passengers.
Specific Penalties and Refunds:
- Lufthansa and KLM each faced penalties of $1.1 million.
- Nearly $4 billion in refunds and reimbursements were facilitated by the DOT, including over $600 million for those impacted by Southwest Airlines' holiday issues in 2022.
Investigations and Delays:
- Transportation Secretary Pete Buttigieg revealed investigations into ten airlines for delayed pandemic refunds, with more pending.
- Lufthansa passengers experienced refund processing delays exceeding 100 days in 2020.
Airlines' Explanations:
- Lufthansa attributed delays to a high volume of refund requests during the pandemic, issuing $5.3 billion in refunds between March 2020 and September 2022.
- KLM cited staffing and technical challenges for delays, despite implementing customer-friendly refund policies.
South African Airways Troubles:
- South African Airways faced complaints for delayed refunds, worsened by financial struggles and bankruptcy protection since 2019, aggravated by the pandemic's impact on air travel.
Analyst Views on LUV
Wall Street analysts forecast LUV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LUV is 44.21 USD with a low forecast of 34.00 USD and a high forecast of 60.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
4 Buy
9 Hold
1 Sell
Hold
Current: 42.440
Low
34.00
Averages
44.21
High
60.00
Current: 42.440
Low
34.00
Averages
44.21
High
60.00
About LUV
Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company's fare products include four categories: Wanna Get Away, Wanna Get Away Plus, Anytime, and Business Select to provide customers options when choosing a fare. It also offers ancillary services, such as EarlyBird Check-In, Upgraded Boarding, and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies. Its Rapid Rewards loyalty program enables program members to earn points for every dollar spent on Southwest base fares, also including purchases paid with LUV Vouchers, gift cards, or flight credit, with no portion of the purchase price paid with Rapid Rewards points. It operates over 803 Boeing 737 aircraft in its fleet and serves 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
