WASHINGTON — Southwest Airways is nonetheless paying for its meltdown through the 2022 holidays that stranded thousands and thousands of vacationers — and the tab is rising.
The U.S. Transportation Division has ordered Southwest to pay a $140 million civil penalty, a part of a broader consent order after the airline’s operational failures a 12 months in the past.
That penalty is by far the most important the DOT has ever levied for shopper safety violations, in response to a press release from the division.
“This isn’t nearly Southwest,” Transportation Secretary Pete Buttigieg mentioned in an interview with NPR’s Morning Version. “That is about the complete business, sending a sign that you just shouldn’t be reducing corners — as a result of in case you fail your passengers, we are going to maintain you accountable.”
A significant winter storm final December brought about journey disruptions throughout the nation as airways canceled 1000’s of flights. However whereas different airways recovered comparatively shortly, Southwest fell aside. The airline finally canceled 16,900 flights, stranding greater than 2 million passengers.
In a assertion, Southwest described the settlement as “a consumer-friendly settlement.” The airline says it has taken steps since final 12 months’s disruption to enhance its operational resiliency and buyer care.
“We have now spent the previous 12 months acutely centered on efforts to boost the Buyer Expertise with important investments and initiatives that speed up operational resiliency,” mentioned Bob Jordan, Southwest Airways President & CEO in a press release. “Our dedication to Clients has been central to our success throughout our 52-year historical past and has helped us turn into one of many world’s most admired and trusted airways.”
Beneath the settlement introduced Monday, Dallas-based Southwest is required to determine a $90 million compensation system for future passengers affected by important delays and cancellations, which counts as a part of the $140 million penalty. The airline will even pay $35 million in money to the U.S. Treasury, unfold out over three years.
Southwest reported $193 million in earnings through the third quarter of 2023.
The civil penalty comes along with $600 million in refunds and reimbursements that Southwest has paid to vacationers who confronted disruptions. In complete, the airline will shell out greater than $750 million for the vacation meltdown, DOT mentioned.
“We’re sending a message reminding airways that there are very sturdy financial causes to fulfill their necessities, along with it simply being the proper factor to do,” Buttigieg instructed NPR. “We simply gave them 140 million causes to make it possible for this by no means occurs once more.”
The U.S. airline business as a complete has improved its operational efficiency since final 12 months, Buttigieg mentioned. The Sunday after Thanksgiving noticed 2.9 million passengers fly in a single day — probably the most ever — whereas lower than 0.5% of flights had been canceled.
Flight cancellations had been down considerably within the first 9 months of 2023, in response to information launched by the DOT. However delays and mishandled baggage are nonetheless issues, shopper advocates say, as vacationers stay deeply dissatisfied.
Complaints about U.S. airways climbed sharply within the first half of the 12 months, in response to a report printed final week.
“Mainly, the airways are on a status restoration tour, as a result of they know the way unhealthy issues have been the previous few years,” mentioned Teresa Murray, a shopper advocate with the U.S. Public Curiosity Analysis Group, which printed the report.
Vacationers filed greater than 26,000 formal complaints about U.S. airways within the first 5 months of 2023 — greater than double the quantity filed throughout the identical interval final 12 months, in response to the report, and on tempo to interrupt the annual report set in 2022.
“Final 12 months’s catastrophe ruined vacation celebrations for thousands and thousands of households, many who spent Christmas weekend sleeping on the ground of airport terminals,” Murray mentioned in a press release. “We hope this penalty sends a robust message to the entire airways that they will’t play with individuals’s lives like this. Vacationers aren’t simply seat numbers. Christmas 2022 is a vacation that thousands and thousands will always remember, for the entire fallacious causes.”
