SAA Settles with US Aviation Authorities Over COVID-Era Refund Delays

South African Airways (SAA) has reached a settlement with the U.S. Department of Transportation (US-DOT) regarding delayed refunds for flights canceled during the COVID-19 pandemic. The US-DOT had initially imposed a civil claim against SAA in May 2021, citing complaints from passengers about delays in receiving refunds for tickets purchased for travel to and from the United States.

Under the terms of the settlement, SAA will pay a civil penalty of $300,000, approximately R5.4 million, to the US Treasury. This amount will be paid in installments over a period of 540 days from the issuance of the consent order. The agreement allows SAA to avoid prolonged litigation.

The delays in refunds were primarily due to the impact of the COVID-19 pandemic, which led to widespread flight cancellations and significant changes in airline operations. SAA's challenges were further compounded by its entry into administration by Business Rescue Practitioners in December 2019.

Despite these difficulties, SAA has consistently engaged with the US-DOT and other stakeholders to address the refund issues. Between April 2021 and March 2023, the airline refunded approximately R2.2 billion for tickets affected by the pandemic-related cancellations.

"We are pleased that this matter has now been finalized. The intention of the parties was always to find an amicable way of closing this case. We look forward to normalizing 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.

This settlement marks a significant step towards resolving the financial and operational challenges that have plagued SAA over the past few years. The airline's efforts to process refunds and maintain customer relations highlight its commitment to overcoming the obstacles posed by the pandemic and business restructuring. As SAA looks to resume its services to the Americas, this resolution paves the way for a renewed focus on rebuilding and expanding its international operations.