U.S. News

Southwest agrees to record $140 million settlement over stranded holiday travelers

By Jake Beardslee · December 18, 2023

Southwest Airlines was fined a record $140 million by the U.S. Department of Transportation (DOT) on Monday over massive flight disruptions that stranded over 2 million passengers during the 2022 holiday season. This civil penalty is about 30 times larger than any previous fine against an airline, according to DOT officials.

The DOT investigation found that Southwest violated consumer protection laws on providing adequate customer service, prompt flight updates, and timely refunds. As a major winter storm hit the U.S. last December, Southwest cancelled over 16,900 flights over multiple days.

“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 Transportation Secretary Pete Buttigieg.

In addition to the fine, Southwest will now be required to provide a $75 flight credit to any passenger whose flight is delayed more than 3 hours due to the airline’s operational issues. The airline has agreed to set aside $90 million specifically for these flight vouchers.

Southwest said in a statement, “we’re pleased to have reached this consumer-friendly settlement, which includes a new, industry-leading policy to compensate customers during significant delays and cancellations.”

The DOT investigation was extensive, reviewing thousands of pages of documents and consumer complaints, while also conducting site visits and audits. The meltdown was determined to be a violation of laws protecting air travelers.

While Southwest maintains it has addressed many issues, Buttigieg made clear that all airlines need to make every effort to prevent this level of mass cancellations from occurring again. The $140 million fine will largely go towards future consumer compensation.