Southwest hit by record $140 million fine for holiday service meltdown in 2022

The federal government is fining Southwest Airlines $140 million for last year’s historic, ten-day-long holiday meltdown that stranded more than two million travelers.

The federal government is fining Southwest Airlines $140 million for last year’s historic, 10-day-long holiday meltdown that stranded more than 2 million travelers. The Department of Transportation’s (DOT) announcement of its largest ever civil penalty comes about one year after cascading issues at Southwest led to the cancelation of nearly 17,000 flights. Those flights made up nearly half of Southwest’s flight schedule during the busy holiday travel period. The agency says it levied the fine “for numerous violations of consumer protection laws during and after the operational failures,” including not communicating with passengers, failing to provide adequate customer service and not refunding passengers fast enough. Southwest said it was “pleased” to reach the settlement with the DOT and that it is committed to delivering the highest quality of customer service. It said the agreement includes “a new, industry-leading policy to compensate customers during significant delays and cancellations.” Southwest has already paid $600 million in refunds and reimbursements to passengers, the DOT said. The company said the service meltdown cost it nearly $1.2 billion between the fourth quarter of last year and the first two months of 2023. In additional to customer compensation, the airline faced additional labor costs and lost revenue that continued into February. On an after-tax basis, it reported the service meltdown cost it $914 million.