Southwest Airlines Fined $140 Million for Holiday Travel Chaos

The U.S. Department of Transportation has imposed a $140 million fine on Southwest Airlines for its operational failures during the 2022 end-of-year holiday season. The penalty, announced through a consent order on Monday, is the largest ever levied for violations of airline consumer protections.

Transportation Secretary Pete Buttigieg emphasized the significance of the fine, stating, “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.” He reiterated the importance of airlines prioritizing passenger care.

The chaos unfolded over the Christmas and New Year’s holidays last year, when Southwest canceled 16,900 flights and left over two million passengers stranded. The issues began with severe weather but were exacerbated by Southwest’s outdated staff scheduling system.

The Department of Transportation’s investigation revealed Southwest’s inadequate customer service, poor communication about flight statuses, and failure to issue timely refunds. The settlement concludes the federal inquiry into unrealistic scheduling practices without formal findings but aims to provide faster public relief.

Of the total fine, $90 million will establish a fund to compensate future travelers for delays and cancellations. Starting April 30, Southwest must issue $75 vouchers for passengers delayed by three hours or more. The airline will also pay $35 million to the government, receiving credit for the compensation fund and previous points awarded to affected customers.

Southwest CEO Bob Jordan acknowledged the airline’s efforts to enhance customer experience and operational resilience. He cited significant investments and initiatives aimed at improving winter operations and collaboration across teams.

This unprecedented fine follows earlier penalties, including a $4.1 million fine against American Airlines for prolonged delays from 2018 to 2021. Additionally, the White House is proposing new regulations requiring airlines to compensate passengers for delays and cancellations.