Southwest Airlines announced it had agreed to pay a record-setting
$140 million civil penalty levied by the United States Department of
Transportation (DOT) over the December 2022 holiday meltdown associated with Winter
Storm Elliott.
The DOT’s consent order comes after a lengthy investigation
into travel disruptions that led to around 16,900 flight cancellations and
stranded two million passengers during last year’s busy winter holiday travel.
As part of the agreement, Southwest will pay a $35 million
cash fine across a three-year period, as well as implement a new policy worth $90
million in travel vouchers of $75 or more to passengers delayed at least three
hours due to an issue or cancellation caused by the airline.
The policy will be implemented by April 30, 2024.
“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,” Southwest CEO Bob Jordan
said.
“Our commitment to customers has been central to our success
across our 52-year history and has helped us become one of the world’s most
admired and trusted airlines,” Jordan continued.
After the chaos of Southwest’s failures during the 2022
winter storm, the carrier paid over $600 million to impacted passengers and
estimated that the incident cost the company more than $1 billion.
Over the last year, the airline implemented significant
technology and consumer service upgrades, dubbed the Disruption Action Plan, as
well as substantial investments in de-icing equipment, new staffing and
software upgrades to predict network health.
The DOT credited Southwest with $33 million toward the
penalty for voluntarily awarding frequent flyer points to hundreds of thousands
of impacted passengers.
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