DOT ensured Southwest paid over $600 million back to passengers and issued record penalty – 30 times larger than any in DOT history – to deter other airlines from failing to protect customers during disruptions.
WASHINGTON – The U.S. Department of Transportation (DOT) has announced a $140 million civil penalty against Southwest Airlines for numerous violations of consumer protection laws during and after the operational failures that cancelled 16,900 flights and stranded over two million passengers over the 2022 Christmas holiday and into the New Year. This penalty is 30 times larger than any previous DOT penalty for consumer protection violations. The majority of the penalty will go towards compensating future Southwest passengers affected by cancellations or significant delays caused by the airline.
The penalty is in addition to the more than $600 million in refunds and reimbursements that DOT already ensured Southwest provide passengers who faced travel disruptions during the operational meltdown. In September 2022, at the urging of Secretary Buttigieg, Southwest Airlines made significant changes to its customer service plan that entitled passengers to reimbursements for expenses such as meals, hotels, and ground transportation if a flight is significantly delayed or cancelled due to an airline issue. As a result of DOT’s actions, Southwest was legally required to adhere to those commitments during the 2022 holiday travel meltdown.
In total, Southwest will pay over $750 million for the holiday meltdown — with the vast majority going to passengers for refunds, reimbursements, rapid rewards, or future compensation — due to DOT’s actions.
“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,” said U.S. Transportation Secretary Pete Buttigieg. “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.”
DOT’s rigorous and comprehensive investigation into Southwest’s operations during the 2022 holiday season included examining tens of thousands of pages documents, conducting several multi-day, in-person audits and site visits at Southwest’s headquarters, reviewing thousands of consumer complaints, and consulting with various third parties, such as airports. In addition, DOT regularly met with Southwest officials to gather information, ask questions, and ensure that any issues identified in the investigation were immediately addressed. DOT also reviewed Southwest’s internal policies and processes for responding to consumer concerns and providing impacted consumers with compensation. DOJ’s Consumer Protection Branch provided valuable assistance to the Department in this important investigation.
Specifically, in its investigation, DOT found the company violated consumer protection laws by:
As part of this settlement, DOT is closing its unrealistic scheduling investigation without making a finding as its goal is to obtain quick relief for the public. The order provides such relief by penalizing Southwest Airlines $140 million and compensating future Southwest passengers impacted by controllable cancellations and significant delays. Under federal law, unrealistic scheduling is considered an unfair and deceptive practice, and today’s penalty will deter airlines from engaging in any unfair and deceptive practices against consumers. DOT is continuing to monitor airlines to identify instances of potential unrealistic scheduling. The Department will act if it finds that an airline has violated consumer protection requirements including setting an unrealistic schedule.
Written by: JT
Reach out to us for inquiries, requests, or collaborations, and let’s keep the music alive.