Southwest to Face $140 Million Fine for 2022 Holiday Disruptions

From December 2022 to early January 2023, Southwest Airlines canceled 16,900 flights, leaving over 2 million passengers stranded as severe winter storms caused chaos in holiday travel across much of the United States. While other major U.S. airlines bounced back from weather-related delays and cancellations, Southwest struggled to regain stability, continuing to cancel flights in the aftermath of Christmas 2022. The U.S. Department of Transportation (DOT) has now made it clear that such a level of service failure will have significant consequences.

“If airlines fail their passengers, we will fully exercise our authority to hold them accountable,” stated U.S. Transportation Secretary Pete Buttigieg in a statement released on December 18. “Caring for passengers is not just the right thing to do—it’s a requirement, and this penalty should serve as a warning to all airlines to take every possible measure to prevent another incident like this.”

The DOT has imposed a $140 million civil penalty on Southwest Airlines for what it terms “numerous violations of consumer protection laws during and after the operational failures over the 2022 Christmas holiday and into the New Year.” This fine is the largest ever levied by the DOT, with a significant portion allocated for future compensation to Southwest passengers impacted by cancellations or significant delays.

In response, Southwest Airlines has stated that it is actively enhancing its operations and customer service to avoid a repeat of last year’s challenges. “We have dedicated the past year to improving the customer experience through substantial investments and initiatives aimed at increasing operational resilience, fostering collaboration across teams, and strengthening our overall readiness for winter operations,” said Bob Jordan, Southwest president and CEO, in a statement regarding the DOT settlement.

John Breyault, vice president of public policy for the National Consumers League (NCL), a nonprofit consumer advocacy organization, praised the DOT’s actions, asserting that it “sends a clear message to the airline industry that passengers’ time is precious and there will be repercussions for carriers that squander it.”

Breyault expressed the hope that all travelers would be protected, regardless of their airline. “This can only be achieved if the DOT implements robust regulations ensuring that consumers receive compensation for delayed or canceled flights, that refunds are issued promptly, and that unfair and deceptive practices, as well as anti-competitive behaviors, are vigorously monitored,” he noted.

The DOT claims it has already taken significant steps in this direction, establishing guidelines that airlines must adhere to for processing passenger refunds and compensation, as well as taking enforcement actions when necessary.

For example, in September 2022, following a tumultuous summer of travel disruptions, the DOT introduced an interactive dashboard on its Aviation Consumer Protection website to better inform travelers about their rights regarding flight cancellations and delays. This dashboard compares the policies of major domestic airlines, detailing which carriers provide meals for delays exceeding three hours and which allow rebooking on the same or different airlines without extra fees. It focuses on what it terms “controllable” cancellations or delays, which are caused by mechanical issues, staffing shortages, or delays in cleaning, fueling, or baggage handling.

At a minimum, the DOT requires that airlines offer meal vouchers for delays longer than three hours and accommodations for passengers who must stay overnight at an airport due to disruptions within the airline's control—an assurance that none of the largest U.S. airlines provided before the DOT’s heightened enforcement last year.

The DOT also reminds travelers of their right to request refunds for any services they paid for but did not receive, such as malfunctioning Wi-Fi access. Additionally, travelers should be informed about any extra charges related to checked or carry-on baggage, as well as fees for making flight changes before completing their booking.

During its investigation into Southwest's 2022 holiday travel disruption, the DOT discovered that the airline's customer service was lacking; it failed to provide timely flight status updates and did not promptly issue refunds, among other violations of consumer protection standards.

Out of the $140 million penalty, Southwest must allocate $90 million for reimbursements related to future flight cancellations and delays that are determined to be within the airline's control.