Southwest Airlines has been hit with the largest fine ever levied against an airline for last year’s holiday travel debacle, which saw thousands of flights cancelled just before Christmas.
The US Department of Transportation on Monday slapped Southwest with a record-breaking $140 million civil penalty for violating consumer protection laws. The fine is 30 times larger than any other penalty ever imposed by the DOT for consumer protection violations.
In December 2022, more than 2 million Southwest passengers were affected by cancellations and delays that began in the days leading up to Christmas and continued through the New Year’s holiday.
As many as 16,900 flights were cancelled in what some have called the largest meltdown in modern airline history.
The majority of the $140 million fine will go to passengers affected by the delays and cancellations. Southwest was also forced to issue more than $600 million in refunds and reimbursements, the DOT said.
In total, the low-cost carrier will pay out more than $750 million for last year’s meltdown, which was initially blamed on bad weather but later attributed in part to problems with Southwest’s computer technology.
DOT investigators combed through thousands of pages of documents, conducted several in-person audits and made several visits to Southwest’s headquarters to determine where the airline went wrong.
After its investigation, the DOT found that Southwest failed to adequately staff its customer service department, failed to provide timely flight status updates to passengers, and failed to reimburse or refund affected travellers in a “prompt and appropriate” manner.
Transportation Secretary Pete Buttigieg said the penalty is a clear message from the federal government that airlines will be held accountable if they “fail their passengers”.
“Taking care of passengers isn’t 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,” Buttigieg said in a news release.
Southwest and other airlines have made significant changes to their customer service systems. Affected travellers now have more options for reimbursement of expenses they might incur if a flight is seriously delayed or cancelled due to an airline problem. These expenses include meals, hotel stays and ground transportation.
In addition to the fees and reimbursements that Southwest has been ordered to pay, the airline will also establish a compensation system for future passengers who may experience major delays or cancellations. Southwest will be required to reserve about $90 million in vouchers for future passengers, the DOT said.
