Roughly a year ago, in late 2022, Southwest Airlines had an unprecedented operational meltdown. During this, the airline canceled 16,900 flights, and stranded over two million passengers over the Christmas and New Year holiday.
The US Department of Transportation (DOT) made it clear that the airline would be held accountable for this, and we now know what that will look like.
In this post:
Southwest faces massive $140 million DOT fine
The DOT has announced a $140 million civil penalty against Southwest Airlines for its numerous violations of consumer protection laws during and after the operational failures that unfolded in late 2022. The majority of this penalty will go toward compensating future Southwest passengers impacted by cancelations or significant delays.
This penalty is 30 times larger than any previous DOT penalty for consumer protection violations. This is also in addition to the more than $600 million in refunds and reimbursement that the airline had to issue to customers in relation to the meltdown.
This fine comes after a long investigation on the part of DOT, which included examining tens of thousands of pages of documents, conducting in-person audits at Southwest’s headquarters, reviewing thousands of consumer complaints, and more.
Specifically, the DOT found that Southwest violated the following consumer protection laws:
- Failing to provide adequate customer service assistance; as hundreds of thousands of Southwest customers were stranded, customers were unable to get in touch with the airline, and were met with busy signals and hours-long queues
- Failing to provide prompt flight status notifications; Southwest failed to provide flight status notifications, even though the airline promises to keep consumers updated about flight status changes via text or email
- Failing to provide refunds in a prompt and proper manner; the DOT found that thousands of customers were not promptly refunded
Wait a second, aren’t those three points just how airlines operate in general? 😉
Here’s how US Transportation Secretary Pete Buttigieg describes the penalty:
“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. Taking care of passengers is not just the right thing to do — it’s required, and this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again.”
Southwest will have to compensate passengers for delays
In the United States, the government doesn’t ordinarily mandate any particular compensation for flight delays, unlike in some other jurisdictions. That will be changing, but exclusively for Southwest. As part of this settlement, Southwest needs to establish a $90 million compensation system for future passengers impacted by significant delays and cancelations.
In the event that Southwest causes a passenger to arrive at their destination three or more hours after their original scheduled arrival time due to an issue within the carrier’s control, Southwest is required to provide the passenger with a transferrable $75 voucher for future use on the airline.
That’s an interesting change to see, as it’s specific to one airline. Ultimately it’s still only a voucher and not cash, but it’s at least nice that an airline has some level of accountability for controllable delays.
Bottom line
Southwest Airlines is facing a $140 million fine from the DOT for its 2022 holiday meltdown. In reality, most of that money is going back to consumers, with $90 million of that being in the form of vouchers that the airline has to issue in the future for controllable delays.
What do you make of the DOT’s fine against Southwest?
I was caught in the debacle at Christmas last year. I have to commend the Southwest employees for really trying to help. I received many notifications (text and email) that the flight was delayed/cancelled. I was informed I could take a flight on another airline and get reimbursed by sending in my receipt (took American Airlines a day later - flight was not even full). I received an email from them around 2-3 weeks later...
I was caught in the debacle at Christmas last year. I have to commend the Southwest employees for really trying to help. I received many notifications (text and email) that the flight was delayed/cancelled. I was informed I could take a flight on another airline and get reimbursed by sending in my receipt (took American Airlines a day later - flight was not even full). I received an email from them around 2-3 weeks later with a voucher for 25,000 points toward a future flight. I also submitted my AA flight receipt and received a reimbursement check around the last week of January (very adequate response time - less than anticipated - made a positive impression).
Southwest found their system was antique the hard way. But, to their credit, they made it right via credits, reimbursements and response time. They were very proactive to remedy the situation in less than a month. Other companies should learn to be so responsive and kind. Southwest has very caring employees and plan to fly them again. They have taken steps to move forward and are in better shape for it.
The fine is large but not really ? SWA probably makes that amount of money in just days; airlines have been fined for years for various reasons and this doesn't seem to make a dent.
I think the penalty to establish a voucher system for future problems is like putting lipstick on a pig - you can make it look good, but it's still a pig. Southwest should have been forced to give EVERY passenger who was delayed last year a VIABLE piece of compensation for the mere inconveniences they suffered because of their ineptitude!
Too bad SW is bearing the brunt of this. We were to fly from MDW to Roc on 12/27/22 and thankfully rec'd notification the night prior our flight had been canceled. We made arrangements to drive home to ROC and thankfully missed all the commotion at the airports. On January 3, 2023 we received an apology email from CEO, Bob Jordan. Included in the email as a "gesture of goodwill" were two SW Rapid Rewards...
Too bad SW is bearing the brunt of this. We were to fly from MDW to Roc on 12/27/22 and thankfully rec'd notification the night prior our flight had been canceled. We made arrangements to drive home to ROC and thankfully missed all the commotion at the airports. On January 3, 2023 we received an apology email from CEO, Bob Jordan. Included in the email as a "gesture of goodwill" were two SW Rapid Rewards certificates for 25,000 points or a $300. equivalent for each of our reservations. Now, I am not sure given the magnitude of the situation, how much faster a company is expected to respond. We appreciated the notice the day before, that allowed us to make other arrangements, and were more than pleasantly surprised to receive unprompted by us, both an apology and vouchers which more than covered the cost of our original tickets. If only public entities and utilities could respond as quickly.
Sorry, no complaints from these Loyal Rapid Rewards Flyers, Southwest employees have always gone above and beyond to make our flight experience pleasant. (And we are in no manner affiliated with Southwest)
A fine that large is just a "shakedown" by the feds! No difference from what Newscum is doing to PG&E...
That mess and the one prior are the reasons I have not flown SW again. I still have 10k points that I may never use or just give to friends and be done with them forever.
The DOT is using WN's operational meltdown to do to WN what it wants to do to all airlines - mandate compensation for passenger delays.
Because it is so unique to WN, the chances are most passengers will probably not understand they are entitled to it and while it is certain that WN agents will do what they are required to do to give it, I suspect that pot of future compensation money will...
The DOT is using WN's operational meltdown to do to WN what it wants to do to all airlines - mandate compensation for passenger delays.
Because it is so unique to WN, the chances are most passengers will probably not understand they are entitled to it and while it is certain that WN agents will do what they are required to do to give it, I suspect that pot of future compensation money will last a long time.
Add in that WN really has learned from its mistakes - as much as some want to believe otherwise - because it cost them $1 billion esp. in refunds and their own transportation credits which they handed out and did so long before the DOT said it would open an investigation.
WN pushed the operation too hard and ignored the flashing red lights on their ops dashboard but other airlines did too.
The real question will be when the DOT goes after B6 for persistently ending up at the bottom of US on-time rankings and 15-20 points worse than other airlines at the same airports.
And then it is also certain that UA will face something similar for its summer 2023 meltdown at EWR which looked a lot like WN's but was contained much faster.
Despite all of this, the airlines have run very reliable operations since August even over Thanksgiving when they carried record amounts of travel - but the DOT and the fear porn media will never acknowledge that.
I’m hoping the DOT will investigate Delta’s recent debacle in Goose Bay (YYR). A simple diversion, due to mechanical issues, of an AMS/DTW A330 turned into a nightmare for the passengers. They were forced to spend 24 hours in a military barracks waiting for Delta to send a rescue aircraft. When an aircraft finally arrived inexplicably the crew ran out of duty time, requiring Delta to send a second aircraft. Three aircraft to complete an...
I’m hoping the DOT will investigate Delta’s recent debacle in Goose Bay (YYR). A simple diversion, due to mechanical issues, of an AMS/DTW A330 turned into a nightmare for the passengers. They were forced to spend 24 hours in a military barracks waiting for Delta to send a rescue aircraft. When an aircraft finally arrived inexplicably the crew ran out of duty time, requiring Delta to send a second aircraft. Three aircraft to complete an Amsterdam to Detroit flight! No wonder Delta is ordering so many wide body aircraft. The DOT needs to investigate why it took so long to rescue these passengers and fine Delta accordingly.
What would you suggest Delta should have done. You do know that Goose Bay doesn't exactly have hotel rooms for a whole widebody full of passengers, right?
As for the crew timeout, I don't know why that happened in this case, but there are many reasons it can happen, with several of those being outside the airline's control (e.g. weather delays, delays in getting a clearance, etc.)
Do you understand what a suitable enroute alternate for an ETOPS flight is? There are specific requirements to list an airport as an ETOPs alternate on a flight plan. These include both real time operational requirements as well as passenger accommodation requirements. There could be a number of reasons the rescue crew timed out but most of them were under Delta's control. Getting a clearance or weather problems are what an airline's PR department would...
Do you understand what a suitable enroute alternate for an ETOPS flight is? There are specific requirements to list an airport as an ETOPs alternate on a flight plan. These include both real time operational requirements as well as passenger accommodation requirements. There could be a number of reasons the rescue crew timed out but most of them were under Delta's control. Getting a clearance or weather problems are what an airline's PR department would issue in a press release. Mismanagement of the crew is the likely culprit and that was under Delta's control. Over the holidays I suggest you read the book, or see the play, "Come From Away". A much different situation but it's a good example of people pulling together to help stranded passengers on a horrible day.
Remembering those holiday travelers that suffered the mess, I think it is fair. Accountability can be expensive. Southwest was aware the system was outdated prior to the meltdown and chose not to improve it.
Wow that's almost like what they might pay for 2 new 737 max aircraft (assuming their negotiated discount off list price)
And there goes southwest chance of profitability for the quarter.
Eh, I doubt it. Seems unlikely that they'll be paying anything in the next couple of weeks.
Also, DoT announcing a fine and an airline actually paying it are quite different things. I suspect Southwest's army of lawyers will be taking Pete to court unless this was a negotiated settlement. DoT can announce all the fines they want, but they have to be able to survive court challenges to actually take effect. It took years...
Eh, I doubt it. Seems unlikely that they'll be paying anything in the next couple of weeks.
Also, DoT announcing a fine and an airline actually paying it are quite different things. I suspect Southwest's army of lawyers will be taking Pete to court unless this was a negotiated settlement. DoT can announce all the fines they want, but they have to be able to survive court challenges to actually take effect. It took years of court battles before AC had to pay up for violations that were far more flagrant, egregious, and obvious than in this case. They were simply straight-up refusing to abide by DoT rules and it still took a year or two before they were finally forced to pay up, as I recall.
Frankly, it's unfortunate to see that DoT is focusing on this right now rather than its own large and continuing problems which it has been much slower to resolve than the airlines have been. The airlines have largely returned to pre-Covid reliability levels now. DoT, not so much.
This is nice, at least for passengers. If the DOT were able to establish bilateral arrangements with major airlines, we might be able to see some version of EU261. Of course this is all just wishful thinking…