Southwest to Pay $140 Million Penalty for Holiday 2022 Meltdown

The U.S. Department of Transportation issued its largest fine ever against Southwest Airlines for the 2022 operations collapse—and says all U.S. airlines are on notice as we head into the holiday travel season.

A Southwest plane wing through a window covered in rain drops

Worried about your upcoming holiday travel plans? The U.S. Department of Transportation says it has your back.

Photo by Shutterstock

Southwest Airlines canceled 16,900 flights and stranded more than 2 million fliers between December 2022 and early January 2023, as operations took a nosedive amid severe winter storms that disrupted holiday air travel across much of the United States last year. But while other major U.S. carriers recovered from the weather-fueled delays and cancellations, Southwest struggled to normalize operations and continued to cancel flights in the days following Christmas 2022. Now, the U.S. Department of Transportation (DOT) is making it very clear that that level of failed service comes with serious consequences.

“If airlines fail their passengers, we will use the full extent of our authority to hold them accountable,” U.S. Transportation Secretary Pete Buttigieg said in a statement issued on December 18. “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 agency imposed a $140 million civil penalty against Southwest for what it describes as “numerous violations of consumer protection laws during and after the operational failures . . . over the 2022 Christmas holiday and into the New Year.” The penalty is the largest ever such fine issued by the DOT, and the majority will be set aside for Southwest passengers who experience cancellations or major delays caused by the airline in the future.

For its part, Southwest says it has been working to bolster operations and customer service to avoid a repeat of last year’s issues. “We have spent the past year acutely focused on efforts to enhance the customer experience with significant investments and initiatives that accelerate operational resiliency, enhance cross-team collaboration and bolster overall preparedness for winter operations” Bob Jordan, Southwest president and CEO, said in a statement about the DOT settlement.

John Breyault, vice president of public policy for the National Consumers League (NCL), a nonprofit consumer advocacy group, applauded the DOT’s action, stating that it “sends an unambiguous signal to the airline industry that passengers’ time is valuable and there will be consequences for carriers that waste it.”

According to Breyault, the hope is that travelers will be protected regardless of which airline they are flying with. “This will only happen if DOT enacts strong rules to ensure that consumers are compensated when flights are delayed or canceled, that refunds are processed without delay, and that unfair and deceptive practices and unfair methods of competition are policed vigorously,” stated Breyault.

The DOT argues that it has already made significant efforts to do just that, putting in place guidelines that airlines must follow for issuing passenger refunds and compensation and taking enforcement actions when necessary.

For instance, in September 2022, following a summer of sweeping travel-related chaos, it launched an interactive dashboard on its Aviation Consumer Protection website to better arm travelers with information on what they’re owed for flight cancellations and delays. The dashboard compares all the major domestic airlines’ policies on issues such as which operators offer meals for delays of more than three hours and which offer to rebook flights on the same or different airlines at no additional charge. It focuses on what it calls “controllable” cancellations or delays, meaning those caused by mechanical issues, staffing shortages, or delays in cleaning, fueling, or baggage handling.

At a minimum, the DOT asks that airlines provide meal vouchers for delays of more than three hours and lodging for passengers who have to wait overnight at an airport because of disruptions within a carrier’s control—something that none of the largest U.S. airlines guaranteed prior to the DOT’s enforcement ramp-up last year.

The DOT also reminds travelers that they have a right to request a refund for services they paid for that are not provided, such as Wi-Fi access that doesn’t work. In addition, they should be made aware of any extra costs associated with checked or carry-on baggage and fees for making flight changes before finalizing a flight booking.

In its investigation into Southwest over the 2022 holiday travel collapse, DOT found that the airline’s customer service assistance fell short, Southwest did not provide travelers with timely flight status updates, and it failed to promptly provide refunds, among other consumer protection violations.

Of the $140 million penalty, Southwest is required to set aside $90 million for reimbursements for future flight cancellations and delays that are deemed within the carrier’s control.

Michelle Baran is a deputy editor at AFAR where she oversees breaking news, travel intel, airline, cruise, and consumer travel news. Baran joined AFAR in August 2018 after an 11-year run as a senior editor and reporter at leading travel industry newspaper Travel Weekly.
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