Fewer U.S. commercial flights were canceled in 2023 than at any point in at least the past decade, the Department of Transportation said this week.
18.12.2023 - 20:11 / thepointsguy.com / United Ceo
Southwest Airlines will be fined $140 million for violating customer protection laws during its 2022 holiday travel operations failure, the U.S. Department of Transportation announced Monday morning.
It was the highest penalty ever leveraged against an airline for consumer protection violations by a factor of 30, the DOT said, part of a move by the Biden administration to crack down on airlines over unreliable operations, hidden fees and other practices the administration has characterized as anti-consumer.
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The fine includes $35 million to be paid to the federal government as a penalty. The rest of the funds will be used toward creating a compensation system for passengers affected by future flight cancellations or significant delays — three hours or more — caused by something within the airline's control. The DOT said the airline must reserve $90 million to issue passengers transferable vouchers worth at least $75 under that system.
The airline received a $33 million credit toward the fine for the Rapid Rewards points it issued last year as an apology to affected passengers. The fine was also offset by $72 million to free up funds for the compensation fund, DOT said, both of which "acknowledges Southwest's effort and will encourage other airlines to follow suit to be proactive during operational disruptions."
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In a statement, Southwest said it was pleased to have reached a settlement with the DOT surrounding the fine.
"Southwest shares the DOT's goal of delivering the highest standard of service to the traveling public and is grateful to have reached a consumer-friendly settlement that both credits past Southwest compensation that went above and beyond requirements for Customers and incorporates a future commitment for Southwest Customer care with a new industry-leading compensation policy."
More than two million passengers were stranded during the 2022 episode when Southwest canceled 16,900 flights as it struggled to regain its footing after a severe winter storm swept through several of its main airports, even as other airlines managed to recover their operations once the weather had passed.
Southwest has previously paid more than $600 million in refunds and expense reimbursements to passengers and said that the storm has cost it over $1 billion.
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Fewer U.S. commercial flights were canceled in 2023 than at any point in at least the past decade, the Department of Transportation said this week.
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Good morning from Skift. It’s Tuesday, December 19. Here’s what you need to know about the business of travel today.
Southwest Airlines canceled 16,900 flights and stranded more than 2 million fliers between December 2022 and early January 2023, as operations took a nosedive amid severe winter storms that disrupted holiday air travel across much of the United States last year. But while other major U.S. carriers recovered from the weather-fueled delays and cancellations, Southwest struggled to normalize operations and continued to cancel flights in the days following Christmas 2022. Now, the U.S. Department of Transportation (DOT) is making it very clear that that level of failed service comes with serious consequences.
The Department of Transportation has ordered Southwest to pay a $140 million fine for numerous consumer-protection violations that resulted from last year’s holiday travel meltdown.
With holiday travel coming up, travelers may be thinking back to last year, when a spate of severe winter storms grounded flights across the country just around Christmas, and an operational meltdown at Southwest Airlines dragged on for nearly a week after.