SAA said on Tuesday that it had reached an “amicable settlement” with the US department of transportation’s office of Aviation Consumer Protection (US-DOT) over penalties for delayed refunds during Covid-19.
The US-DOT imposed a civil claim against SAA on behalf of passengers complaining about delayed refunds on their tickets purchased to and from the US, for flights that were cancelled during the pandemic’s grounding of airline operations.
SAA was one of several global airlines that faced the same penalty.
SAA said in a statement it was pleased it had reached an amicable settlement with the US-DOT on the matter. From the original penalty claim amount, SAA has accepted the settled imposition of a civil penalty of $300 000 (roughly R5.4m) to void protracted litigation. The penalty will be paid to the US treasury in tranches over 540 days of the issuance date of the consent order.
SAA said it cancelled or significantly changed the flights due to the effect of the Covid-19. SAA’s situation was exacerbated by the fact that the company went into administration by business rescue practitioners in December 2019.
In its continuous engagements with the US-DOT, SAA has contended that notwithstanding the challenges of business rescue and the Covid-19 pandemic, SAA took extraordinary steps during 2019-2022 to process refunds for passengers whose flights were cancelled or significantly delayed by the airline, not only in the US but throughout SAA’s markets.
Between April 2021 and March 2023, SAA paid about R2.2bn in Covid-19 ticket refunds for tickets that went unused period.
“We are pleased that this matter has now been finalised. The intention of the parties was always to find an amicable way of closing this case. We look forward to normalising relations with our customers in the US and welcoming them aboard SAA when we resume flights to the Americas in the future,” said Koekie Mbeki, SAA’s chief legal counsel.
The US -DOT said on Monday it had imposed $2.5m in civil penalties in total against Lufthansa, Air France unit KLM Royal Dutch Airways and SAA. The civil penalties, the department said, were for significant delays in providing more than $900m in refunds owed to passengers due to flights disrupted by the Covid-19 pandemic.
Of the $1.1m penalties imposed on KLM and Lufthansa, each carrier was credited $550,000 for refunds for nonrefundable tickets on US flights.
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