Most of the settlement will go toward compensating future passengers, which the U.S. Department of Transportation considers an incentive for Southwest to avoid repeating last winter’s mess.
FILE – Travelers wait in line for service at the Southwest Airlines check-in counter at Denver International Airport on Dec. 27, 2022. Southwest Airlines will pay a $35 million fine as part of a $140 million agreement to settle a federal investigation into a debacle last December when the airline canceled thousands of flights and stranded more than 2 million travelers over the holidays.
“This penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again,” he said. Even before the settlement, the nation’s fourth-biggest airline by revenue said the meltdown cost it more than $1.1 billion in refunds and reimbursements, extra costs and lost ticket sales over several months.
Southwest also did not keep customers updated about canceled and delayed flights, failing to fulfill a requirement that airlines notify the public within 30 minutes of a change. Some said they never got an email or text notice and couldn’t access Southwest’s website. Southwest said the 2022 storm that produced record cold temperatures, blizzards and power outages a few days before Christmas created “unanticipated operational challenges.” The airline said it quickly began reimbursing travelers for meals, hotels and alternative transportation and also distributed frequent flyer points.
The settlement provides that in addition to the $35 million fine, Southwest will get $33 million in credit for compensation already handed out, mostly for giving 25,000 frequent flyer points each, worth about $300, to affected customers. The company promised to give out $90 million in vouchers to future travelers.
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