Southwest Fined a Record $140 Million for 2022 Holiday Service 'Meltdown' That Stranded 2 Million Travelers
In total, Southwest Airlines will pay over $750 million for operational issues during the 2022 holiday season
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The terms of a settlement between Southwest Airlines and the federal government were released Monday.Southwest Airlines got a record-breaking fine this Christmas.
On Monday, the U.S. Department of Transportation (DOT) released a statement announcing that Southwest was receiving a $140 million federal civil penalty as a result of the breakdown in the company's operations over the 2022 Christmas holiday.
The airline canceled 16,900 flights at the time and left 2 million passengers stranded during the busiest travel time of the year. Some customers dealt with the aftermath of the company's decisions into the new year, the DOT's statement said.
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In its announcement, the federal government noted that the six-figure penalty is over 30 times larger than any other DOT penalty issued for consumer protection violations.
"The majority of the penalty will go towards compensating future Southwest passengers affected by cancellations or significant delays caused by the airline," the statement reads.
The $140 million penalty was issued on top of the $600 million in "refunds and reimbursements" that the government made sure Southwest paid to passengers impacted by what the government described as an "operational meltdown" in its statement.
“Today’s action sets a new precedent and sends a clear message: if airlines fail their passengers, we will use the full extent of our authority to hold them accountable,” said U.S. Transportation SecretaryPete Buttigieg. “Taking care of passengers is not just the right thing to do — it's required, and this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again.”
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A Southwest Airlines passenger jet lands at Chicago Midway International Airport in Chicago, Illinois, on December 28, 2022.It was determined that Southwest Airlines failed to "provide adequate customer assistance" during the operational issues. The DOT said they also failed to provide prompt flight status notifications and failed to provide refunds in a "prompt and proper manner."
In addition to the record-breaking $140 million penalty, and the $600 million passenger refunds, Southwest is now required by the federal government to set up a $90 million compensation system to aid passengers affected by future cancellations and delays.
Southwest will pay over $750 million in total for its failure in operations over the 2022 holiday season.
The airline released its own public statement on the matter.
"Southwest shares with the DOT the goal of delivering the highest standard of service to the traveling public and is grateful to have reached a consumer-friendly settlement that both credits past compensation that went above and beyond requirements for Customers and incorporates a future commitment for Southwest Customer care with a new industry-leading compensation policy," Southwest's statement read in part.
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Southwest said in a statement its putting 2022 behind it and looking to the future.The company's statement also detailed the actions it took to address the issues it faced during what was described as the "December 2022 Winter Storm Elliot disruption."
Southwest's statement described steps the company implemented to improve the customer experience, like real-time digital bag tracking, flight credits that don't expire, and easier methods for canceling and rebooking flights.
"We have spent the past year acutely focused on efforts to enhance the Customer Experience with significant investments and initiatives that accelerate operational resiliency, enhance cross-team collaboration and bolster overall preparedness for winter operations," Bob Jordan, Southwest Airlines president and chief executive officer said. "Our commitment to Customers has been central to our success across our 52-year history and has helped us become one of the world's most admired and trusted airlines."
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