British Airways has been fined almost £1 million by the US government over claims it failed to pay refunds for cancelled flights.

The US Transportation Department said in a legal document the airline did not “provide timely refunds to passengers” for abandoned or rescheduled flights to and from the country during the coronavirus pandemic.

British Airways said it had “acted lawfully at all times” after being hit with the 1.1 million US dollar (£878,000) fine on Thursday, and refuted the claims.

A consent order from the department read: “From March to November 2020, British Airways’ website instructed consumers to contact the carrier via phone to ‘discuss refund options’, including for flights the carrier cancelled or significantly changed.

“However, consumers were unable to get through to customer service agents when calling the carrier for several months during this period because British Airways failed to maintain adequate functionality of its customer service phone lines. There was also no way to submit a refund request through the carrier’s website during this period.

“Also, from March to November 2020, British Airways had misleading information on its website which led consumers to inadvertently request travel vouchers instead of refunds.

“Since March 2020, the Department has received over 1,200 complaints alleging that British Airways failed to provide timely refunds after cancelling or significantly changing consumers’ flights to or from the United States.

“British Airways has received thousands more complaints and refund requests directly from consumers. British Airways’ failure to establish, for several months, a readily accessible method for consumers to request refunds for flights the carrier cancelled or significantly changed caused significant challenges and delays in thousands of consumers receiving required refunds.”

The department said the fine “establishes a strong deterrent to future similar unlawful practices”.

British Airways is being credited just under £500,000 towards the penalty because in 2020 and 2021 it paid more than 40 million US dollars in refunds to customers with non-refundable tickets.

The airline said: “We’re very sorry that at the height of the unprecedented pandemic – when we were unfortunately forced to cancel thousands of flights and close some call centres due to government restrictions – our customers experienced slightly longer wait times to reach customer service teams.

“During this period, we acted lawfully at all times and offered customers the flexibility of rebooking travel on different dates, or claiming a refund if their flights were cancelled.

“To date, we have issued more than five million refunds since the start of the pandemic.”