By David Shepardson

WASHINGTON (Reuters) -Lufthansa has agreed to pay a $4 million penalty for allegedly discriminating against Jewish passengers who were trying to board a connecting flight in Frankfurt in May 2022, the U.S. Transportation Department said on Tuesday.

Lufthansa prohibited 128 Jewish passengers, nearly all of whom wore garments generally worn by Orthodox Jewish men, from boarding a connecting flight in Germany on the basis of alleged misbehavior by some passengers, the Transportation Department said.

Although many of the passengers did not know each other or were not traveling together, passengers interviewed by DOT investigators stated that Lufthansa treated them as if they were a single group and denied all of them boarding for the alleged misbehavior of a few, DOT said.

The passengers, who had flown from New York to Frankfurt, were trying to board a connecting flight to Budapest.

Under the consent order, Lufthansa agreed to pay $2 million and the Department of Transportation said it will credit the airline with $2 million that it paid in compensation to passengers.

Lufthansa did not admit to any violations under the consent order and it denied that any of its employees discriminated against passengers. It contended as many as 60 passengers onboard at any given time were disregarding crew instructions.

The airline said it regretted and has publicly apologized on numerous occasions for the circumstances surrounding the decision to deny boarding, USDOT said in the consent order.

The airline said the incident "resulted from an unfortunate series of inaccurate communications, misinterpretations, and misjudgments throughout the decision-making process," the Transportation Department said.

Lufthansa said in a statement Tuesday that since the 2022 incident, it has fully cooperated with the DOT and remains focused on many efforts including partnering with American Jewish Committee to curate "a first-of-its kind training program in the airline industry for our managers and employees to address antisemitism and discrimination."

USDOT said the penalty is the largest it has ever issued against an airline for civil rights violations.

"No one should face discrimination when they travel, and today’s action sends a clear message to the airline industry that we are prepared to investigate and take action whenever passengers’ civil rights are violated,” Transportation Secretary Pete Buttigieg said.

(Reporting by David Shepardson; Editing by Chizu Nomiyama and Leslie Adler)