Southwest Airlines Agrees to Pay Record $140m Penalty Over 2022 Travel Disruption
Washington – Southwest Airlines has reached a settlement with the US government and will pay a record civil penalty of $140m for the travel disruption experienced during the December 2022 holiday season. The airline faced heavy criticism and outrage after 16,900 flights were canceled, leaving approximately 2 million passengers stranded.
The Department of Transportation announced on Monday that the consent order would resolve the lengthy investigation into the incident and serve as a strong deterrent in the industry. The settlement includes a $35m cash fine and a three-year mandate that requires Southwest to provide $90m in travel vouchers to passengers who experienced delays of at least three hours.
The unprecedented delay compensation program, slated to begin in April, is part of the Biden administration’s efforts to hold airlines accountable for their actions. Southwest clarified that the vouchers will be awarded upon request.
Transportation Secretary Pete Buttigieg emphasized the government’s commitment to ensuring passenger protection. He stated, If airlines fail their passengers, we will use the full extent of our authority to hold them accountable.
The travel disruption in December 2022 was primarily caused by a severe winter storm, resulting in numerous nightmarish experiences for travelers. People missed funerals and long-awaited holiday gatherings, while others had to endure grueling cross-country drives lasting more than 17 hours. Additionally, some cancer patients were unable to receive necessary treatment.
Southwest Airlines has already paid over $600m to affected passengers and invested in technological improvements and consumer service upgrades. Additionally, the airline has implemented de-icing equipment throughout its network. As a result, it has witnessed significant operational improvements this year.
Although Southwest did not admit to any wrongdoing, it agreed to the settlement to avoid litigation. The airline expressed its gratitude for reaching a consumer-friendly agreement with the transportation department, allowing it to shift its focus towards the future.
The penalty imposed on Southwest, totaling $140m, surpasses the prior record of $4.5m imposed on Air Canada. The department has sought to impose higher fines since January. The settlement also addresses Southwest’s violations of customer protection laws. The government found that the airline failed to provide adequate customer service assistance and timely flight status notifications and refunds to affected passengers.
In May, President Joe Biden announced that the department would propose new rules requiring airlines to compensate passengers with cash for significant flight delays or cancellations caused by carriers. However, when the department asked carriers if they would be willing to pay at least $100 for delays of three hours or more, none agreed.
Despite resistance from airlines, including Southwest, to provide cash compensation, carriers voluntarily committed to providing accommodations such as hotels, meals, and ground transportation for airline-caused delays or cancellations.
The settlement signals the US government’s intent to prioritize passenger welfare and hold airlines accountable for disruptions and failures in customer service. With the record penalty imposed on Southwest Airlines, the hope is that it will serve as a deterrent for future incidents, ensuring a better travel experience for passengers.
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