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18.12.2023 - 18:19 / skift.com / Pete Buttigieg / Bob Jordan / Meghna Maharishi
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.
The fine is 30 times larger than any previous DOT penalty for consumer-protection violations, and the majority will go toward compensating future Southwest passengers for delays or cancellations, the DOT said.
Of the $140 million, Southwest has to pay $35 million to the government and has to reserve $90 million in vouchers for future customers affected by “controllable cancellations and significant delays.”
The DOT said Southwest is required to give passengers a $75 voucher if they arrive at their destination more than three hours late due to issues within Southwest’s control.
“Today’s 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,” said U.S. Transportation Secretary Pete Buttigieg.
The DOT concluded in an investigation that Southwest did not do enough to protect its customers during the 2022 holiday travel season when a severe winter storm caused airlines to cancel thousands of flights. But while other airlines were able to recover quickly after the storm, Southwest couldn’t, leading to the cancellation of almost 17,000 flights between Christmas and New Year’s.
Southwest described the settlement as “consumer-friendly” and said it has since changed much of its strategy around winter weather.
The meltdown prompted Southwest to invest billions in upgrading its technology, deploying more de-icers, along with implementing strategies to better coordinate its crews during severe weather.
Southwest CEO Bob Jordan vowed at a Wings Club in New York on December 14 that such an event would never happen again, according to CNBC.
“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,” Jordan said in a statement.
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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.
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.
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.
As millions of passengers begin to fill airports for the 2023 holiday season, Southwest Airlines is still facing consequences for last year's holiday travel meltdown. The Department of Transportation (DOT) issued a record $140 million fine against Southwest on Monday, while also introducing new consumer protections and enforcements to help avoid another meltdown, which left thousands of flights canceled and passengers across the United States stranded, from happening again. “We’re pleased to have reached this consumer-friendly settlement, which includes a new, industry-leading policy to compensate Customers during significant delays and cancellations,” Southwest Airlines shared in a statement about the settlement. After the holiday travel meltdown of 2022, the Department of Transportation conducted an extensive investigation which found the airline failed to provide prompt refunds and general service to «hundreds of thousands of Southwest customers». As a result of the investigation, the Department of Transportation says that Southwest will be financially responsible for at least $750 million which includes refunds, future compensation for tickets, and more. In addition to the fine and payments, the DOT enforcement also requires that Southwest establish a $90 million reserve fund for future flight delays and cancellation. “This industry-leading benefit will ensure that Southwest passengers impacted by any future significant disruptions will receive not only flight rebooking, hotels, and food during the delay, but also timely compensation from Southwest due to the inconvenience,” the DOT release shares. Looking ahead to the holiday travel season that is currently underway, Southwest Airlines CEO Bob Jordan said the airline is “absolutely ready” in a recent interview, and that the airline has taken many steps to ensure reliable air service, Airline passengers this holiday can also utilize new tools from the Department of Transportation, including an interactive dashboard which shows their rights when flying. “For those who are planning to fly.