The Department of Transportation issued a record $140 million civil penalty against Southwest Airlines over its 2022 holiday meltdown.
The penalty is 30 times larger than any in DOT history.
The action comes in response to numerous consumer protection law violations and operational disruptions that left 16,900 flights canceled and over 2 million passengers stranded between Christmas and New Year's last year.
The DOT says it hopes the penalty will deter other airlines from similar mishaps.
"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 in a press release. "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."
The penalty comes in addition to the over $600 million Southwest was already ordered to pay in refunds and reimbursements to customers. The majority of the money from the $140 million penalty "will go towards compensating future Southwest passengers affected by cancellations or significant delays caused by the airline," said the DOT.
Through the penalty, Southwest is required to establish a $90 million compensation system for future passengers affected by delays or cancellations.
"In the event Southwest causes a passenger to arrive at their destination three hours or more after their original scheduled arrival time due to an issue within Southwest's control, Southwest is required to provide the passenger with a transferrable $75 voucher for future use on the airline," said the DOT. "This industry-leading benefit will ensure that Southwest passengers impacted by any future significant disruptions will receive not only flight rebooking, hotels, and food during the delay, but also timely compensation from Southwest due to the inconvenience."
Last year, Buttigieg pressured airline CEOs to make customer service improvements. In response, the 10 largest U.S. airlines now guarantee free rebooking and meals when the airline is to blame for a delay or cancellation, and nine of those also guarantee hotel accommodations.
