Southwest Airlines Fined $140 Million for Last Winter’s Debacle

( — As part of the $140 million settlement between Southwest Airlines and the federal government to resolve the federal investigation into the cancellation debacle last December, Southwest will pay a $35 million fine to the government, while the majority of the settlement will go to compensating future passengers affected by delays or cancellations, the Associated Press reported.

Transportation Secretary Pete Buttigieg said the settlement, the largest ever imposed on a US airline for violating consumer protection laws, is a demonstration of his department’s commitment to ensure that airlines are taking care of their passengers.

Southwest said in a statement that it had “learned” from last year’s debacle and planned to shift its “focus to the future.”

The settlement stems from last year’s mass cancellations following a winter storm that paralyzed Southwest’s operations in Chicago and Denver and was compounded when its crew scheduling system was unable to keep up. Nearly 17,000 Southwest flights were canceled.

Even before the $140 million settlement, Southwest said last year’s cancellation debacle cost the airline over $1.1 billion in reimbursements and refunds, lost ticket sales, and extra costs over several months.

In a December 15 consent decree, the government said Southwest “violated the law on numerous occasions” when it failed to assist stranded customers at airports and hotels and left many scrambling for other flights.

Southwest customers who attempted to contact their airline’s customer service center were either placed on hold for hours or got a busy signal. The airline also failed to keep customers updated about delayed or canceled flights, failing to live up to the requirement to notify the public of changes within 30 minutes, according to the Transportation Department.

In addition to the $35 million fine, Southwest will also begin providing a minimum $75 voucher to travelers who request one if they reach a destination at least three hours late due to a cancellation or delay caused by Southwest. The voucher program will remain in place from April 2024 until April 2027.

Southwest will receive a $33 million credit for compensation it already handed out to affected customers, mostly through giving 25,000 frequent flyer points worth $300.

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