The Transportation Department announced Monday that Southwest Airlines has been fined a record $140 million for the meltdown that stranded travelers during the 2022 holiday season.
The agency said the fines stemmed from “numerous violations of consumer protection laws” as Southwest canceled nearly 17,000 flights around Christmas and New Year’s. An estimated 2 million passengers got stuck due to the operational chaos.
The agency said the fine is the biggest on record and 30 times larger than the previous record for a civil penalty. Most of the money would go toward compensating future Southwest passengers inconvenienced by “controllable” cancellations or delays.
The Transportation Department said the fines come on top of the $600 million Southwest already agreed to disburse for refunds and reimbursements for meals, lodging and other transportation. The agency has been auditing Southwest and reviewing consumer complaints as a result of last year’s holiday debacle.
Of the $140 million, $35 million would go directly to the U.S. Treasury in three installments.
“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,” Transportation Secretary Pete Buttigieg said in a statement.
Southwest said in a statement that it was “grateful” to have reached a “consumer-friendly settlement” with regulators.
“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.”
- Transportation Secretary Pete Buttigieg
“Southwest confronted unprecedented operational, volume-related challenges yet acted with diligence and in good faith,” the company said, attributing the cavalcade of cancellations to winter storm Elliott. It maintained that the settlement and past payments made to travelers “went above and beyond requirements.”
Both Southwest and Buttigieg faced the ire of passengers and politicians in the wake of the travel fiasco. Officials said Monday that its investigation found Southwest provided poor customer service, failed to quickly notify passengers about delays and didn’t promptly offer refunds to stranded travelers.
Southwest said Monday it was rolling out a new reimbursement program in conjunction with the settlement. Passengers could be entitled to a voucher worth $75 or more if their flight is canceled or they arrive at their destination at least three hours late as a result of Southwest’s actions. The policy, which both the company and the Transportation Department described as “industry-leading,” goes into effect on April 30 next year.
Buttigieg said taking care of passengers is “not just the right thing to do.”
“It’s required,” he said. “And this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again.”