The transport department in the US has fined Southwest Airlines $140 million (Rs 1,166 crore) for its operational meltdown during the 2022 holiday season. According to New York Times, the meltdown last winter disrupted travel for about two million people. Of the $140 million, the airline will give $35 million to the US federal government. The rest of the amount will be given as frequent-flier points as an apology to customers affected by the disruption, and the airline has also agreed to give tens of millions of dollars in vouchers to other customers.
The fine is 30 times the previous penalty against an airline for consumer protection violation. It was imposed in Air Canada ($4.5 million settlement) in 2021.
“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,” NYT quoted Transportation Secretary Pete Buttigieg as saying in a statement.
“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,” Mr Buttigieg further said.
The department also said that Southwest failed to provide prompt customer service, flight notifications and refunds to passengers affected by the meltdown.
The fine was imposed after a lengthy government investigation into the massive travel disruption, the agency said.
Southwest did not admit to wrongdoing but agreed to the settlement to avoid litigation and said Monday it was “grateful to have reached a consumer-friendly settlement” with USDOT and now “can shift its entire focus to the future.”
The airline’s chief executive officer Bob Jordan said they have been working on improving the service since last winter. “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,” said Mr Jordan.
Southwest has been directed to provide $90 million in travel vouchers of $75 or more to passengers delayed at least three hours getting to final destinations because of an airline-caused issue or cancellation.
The 2022 massive winter storm had caused travel chaos across the US, with people missing funerals or long-awaited holiday gatherings, passengers with cancelled flights forced to make cross-country drives of 17 or more hours across and some cancer patients not getting treatment.