After a yearlong investigation, Southwest Airlines has been hit with a $140 million civil penalty for its December 2022 service disruptions, the Department of Transportation said Monday.
As the airline prepares for a busier end-of-year holiday period, Southwest is still reeling from last year's debacle that cost nearly $1.2 billion between the fourth quarter of 2022 and the first two months of 2023.
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"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.
The fine includes a $35 million payment directly to the government, which will be paid out over three years, and is the largest fine ever imposed by the DOT for violations of consumer protection laws. Southwest has already paid more than $600 million in refunds and reimbursements to affected travelers and is expected to pay $750 million in compensatory damages.
Of the record-breaking $140 million fine, $72 million will be offset by credit for vouchers to future travelers through 2027. The DOT is crediting the airlines with $33 million in frequent-flier miles to affected passengers.
The airline had canceled nearly 17,000 flights scheduled between Dec. 21 and Dec. 29, affecting nearly 2 million customers, as a winter storm halted operations across major airports, overwhelming its scheduling crew.
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Earlier this year, Southwest Airlines released an action plan to prevent a meltdown this holiday season, aiming to strengthen winter operations by investing in software to handle crew reassignments and improve communication efforts.
"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," Southwest CEO Bob Jordan said in a press release. "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."