Southwest Airlines to Pay $140M Fine

( – Southwest Airlines has reached a huge $140 million civil penalty settlement with the US Department of Transportation (USDOT) following the extensive disruptions during the December 2022 holiday season. The tumultuous period witnessed a staggering 16,900 flight cancellations, leaving approximately 2 million travelers stranded.

The order, announced by the USDOT, is a comprehensive government inquiry into the airline’s role in the travel havoc of last year, using Southwest’s penalty as an example for what might happen for future airline misconduct. The settlement has a $35 million cash fine, along with a 3-year order mandating Southwest to allocate $90 million in travel vouchers, valued at $75 or more, to affected passengers experiencing delays exceeding 3 hours.

In a proactive measure, Southwest plans to initiate an “industry-leading” US delay compensation program by April 2024, aligning with the Biden administration’s intensified regulations and stances on airline accountability. The airline commits to distributing vouchers “upon request,” saying they are committed to making things right. Transportation Secretary Pete Buttigieg affirmed that airlines who fail their passengers need to be held accountable.

The winter storm-induced disruptions spawned hundreds of harrowing accounts: travelers missing life events, and critical medical treatments and appointments postponed. Acknowledging the operational missteps, a Southwest executive candidly admitted to lawmakers, “We messed up.”

Despite incurring over $600 million in passenger compensation and operational losses exceeding $1 billion, Southwest has undertaken substantial technological enhancements and changes to customer service. The airline’s CEO, Bob Jordan, expressed confidence in the company’s preparedness for future challenges, highlighting the transformative strides made this year.

Jordan conveyed Southwest’s satisfaction in resolving the investigation, emphasizing the unprecedented nature of the storm and its ensuing consequences. He refuted allegations of wrongdoing, asserting that such an extensive disruption is unlikely to recur. The imposed penalty, the highest settlement ever made regarding airline failures, shows USDOT’s new enforcement approach, showing that it intends to crack down on airline shortcomings regarding passengers.

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