Southwest will pay a $140 million fine for its meltdown during the 2022 holidays
The U.S. Transportation Department has ordered Southwest to pay a $140 million civil penalty, part of a broader consent order after the airline's operational failures a year ago.
That penalty is by far the largest the DOT has ever levied for consumer protection violations, according to a statement from the department.
"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," Transportation Secretary Pete Buttigieg said in a statement announcing Monday's order.
A major winter storm last December caused travel disruptions across the country as airlines canceled thousands of flights. But while other airlines recovered relatively quickly, Southwest fell apart. The airline ultimately canceled 16,900 flights, stranding more than 2 million passengers.
Since the disruption, Southwest says it has taken steps to improve its operational resiliency and customer care.
"We have spent the past year acutely focused on efforts to enhance the Customer Experience with significant investments and initiatives that accelerate operational resiliency," said Bob Jordan, Southwest Airlines President & CEO in a statement. "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."
Under the agreement, Dallas-based Southwest is required to establish a $90 million compensation system for future passengers affected by significant delays and cancellations, which counts as part of the $140 million penalty.
The airline has already paid out more than $600 million in refunds and reimbursements to travelers who faced disruptions. In total, the airline will pay out over $750 million for the holiday meltdown, DOT 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," Buttigieg said.
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