Southwest Airlines has been given the largest fine ever levied against an airline for last year’s holiday travel debacle which saw thousands of flights canceled near Christmas.
The U.S. Department of Transportation penalized Southwest a record-breaking $140 million civil penalty on Monday for violating consumer protection laws. The fine is 30 times larger than any other penalty ever issued by the DOT for consumer protection violations.
In December 2022, more than 2 million Southwest passengers were affected by cancellations and delays beginning in the days leading up to Christmas and continuing through the New Year holiday.
As many as 16,900 flights were canceled in what some were calling the biggest meltdown in modern airline history.
The majority of that $140 million fine will go to passengers who were adversely 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 budget airline will pay out more than $750 million for last year’s meltdown, which was initially blamed on adverse weather but was later attributed, in part, to issues with Southwest’s computer technology.
DOT investigators combed through thousands of pages of documents, conducted several in-person audits and made multiple visits to Southwest’s headquarters as they looked to determine where the airline went wrong.
After its investigation, the DOT determined that Southwest failed to adequately staff its customer service department, did not provide timely flight status updates to passengers and did not reimburse or refund affected travelers in a “prompt and proper” manner.
Transportation Secretary Pete Buttigieg said that 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 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,” Buttigieg said in a news release.
Southwest and other airlines have made major changes to their customer service systems. Affected travelers now have more options for reimbursements for expenses they might incur if a flight is seriously delayed or canceled due to an airline issue. Those expenses include meals, hotel stays and ground transportation.
In addition to the fees and refunds, Southwest has been ordered to pay, the airline will also be establishing 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.
