Southwest Airlines fined record $140 million by DOT over 2022 leisure travel collapse

The airline said it was pleased to have reached a “consumer-friendly agreement.”

December 18, 2023, 5:00 a.m. ET

• 4 min reading

The U.S. Department of Transportation said Monday that Southwest Airlines has been fined a record $140 million for its operational collapse during the 2022 leisure travel season.

The civil penalty imposed on the airline is about 30 times greater than any previous penalty against an airline, Department of Health officials said in a news release.

The DOT said it will also require Southwest to issue a $75 flight credit to any passenger whose arrival is delayed by more than three hours if the airline is responsible, including mechanical problems.

“Today’s action sets a new precedent and sends a clear message: When airlines fail their passengers, we will use the full extent of our authority to hold them accountable,” Transportation Secretary Pete Buttigieg said in a statement.

A Southwest Airlines commercial aircraft lands at John Wayne Airport in Santa Ana, California, January 18, 2022. Mike Blake/Portal

The $140 million fine is in addition to about $600 million in restitution and refunds previously agreed to because of the meltdown, the DOT said. Officials said they would use the bulk of the fine to compensate customers affected by future flight cancellations and other delays in the southwest.

When a massive winter storm hit the United States during the 2022 holiday season, the airline canceled more than 16,900 flights and stranded more than 2 million passengers, the DOT said.

Southwest said it “learned from the event” and made new investments to improve customer service and “our resilience.”

“We are pleased to have reached this consumer-friendly agreement, which includes a new, industry-leading policy to compensate customers for significant delays and cancellations,” the airline said in a press release.

In this file photo, a Southwest Airlines plane prepares to land at Midway International Airport on Feb. 12, 2023, in Chicago. Kiichiro Sato/AP

Transportation officials said their investigation into the days-long incident included “reviewing tens of thousands of pages of documents, conducting multiple multi-day in-person audits and site visits at Southwest’s headquarters, reviewing thousands of consumer complaints, and consulting with various third parties, such as: “than airports.”

That investigation found the airline violated consumer protection laws by providing customer service, instant flight status notifications and prompt refunds, DOT officials said Monday.

DOT officials said they directed Southwest to reserve $90 million worth of vouchers to cover the $75 in flight credits the airline must pay when flights are delayed more than three hours.

“Taking care of passengers is not just the right thing to do — it’s necessary, and this penalty should put all airlines on notice to take every step possible to ensure a meltdown like this never happens again,” Buttigieg said in a statement.