The United States (US) Department of Transportation (DOT) has fined Southwest Airlines $140 million after the carrier canceled 16,900 flights during Christmas 2022.
The fiasco became known as the “holiday meltdown” due to over two million passengers becoming stranded in the peak of Christmas holiday season and into the New Year.
The DOT said the civil penalty was given for “numerous violations of consumer protection laws during and after the operational failures’ of Christmas and New Year 2022.
According to the DOT, the penalty is 30 times bigger than any given for consumer protection violations before and is a warning to other airlines of the consequences if they fail to protect consumers during disruptions.
“The majority of the penalty will go towards compensating future Southwest passengers affected by cancellations or significant delays caused by the airline,” the DOT said.
Southwest Airlines has already paid more than $600 million in refunds and reimbursements.
“[This] 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. “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.”
The DOT found that Southwest failed to provide adequate customer service assistance, failed to provide prompt flight status notification and failed to provide refunds in a prompt and proper manner.
In response Southwest said it was “grateful to have reached a consumer-friendly settlement”.
Southwest will also be required to establish a $90 million compensation system so future passengers affected by significant delays and cancellations can be given a transferable $75 voucher for future use on the airline.
“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 & 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.”
Flight cancellations in 2002 were driven by a meltdown of Southwest’s operations between Christmas and New Year following a storm that resulted in record cold temperatures across the majority of the US.
