Southwest Airlines Fined $140 Million by DoT for Winter Storm Flight Disruptions

Southwest Airlines has been ordered to pay a hefty fine of USD 140 million by the U.S. Department of Transportation (DOT) Office of Aviation Consumer Protection. This fine is in response to the low-cost carrier’s violation of consumer protection laws during a winter storm in late 2022, which led to the cancellation of 16,900 flights over 11 days, affecting over two million passengers.

Filed under Docket DOT-OST-2023-0001 on December 15, 2023, the consent order follows a settlement agreement between the DOT and Southwest Airlines, which the airline agreed to avoid litigation. The DOT’s investigation found that Southwest Airlines breached 49 U.S.C. § 41712, a statute that prohibits unfair or deceptive practices in air transportation. Specifically, the airline was found to have failed to provide timely refunds and flight status notifications to passengers during Winter Storm Elliott, which disrupted flights across the U.S. from December 21, 2022, to January 2, 2023.

Moreover, the DOT criticized Southwest for inadequate customer service assistance during the storm, considering it an unfair practice that caused substantial harm to passengers. The airline’s failure to provide adequate call center assistance was also deemed deceptive, given that it advertised this service to consumers.

Southwest Airlines cooperated with the investigation but disagreed with the DOT’s conclusion that it violated specific consumer protection laws. The airline highlighted its efforts during the storm, including proactive communication with passengers and processing refunds, albeit admitting that some were delayed.

As part of the settlement, Southwest has agreed to implement a new policy, issuing a USD 75 voucher to passengers for delays of three hours or more due to reasons within the airline’s control. The airline will also pay USD 35 million to the U.S. Treasury in installments, with the remaining USD 72 million offset against future passenger compensation.

The decision underscores the DOT’s commitment to enforcing consumer protection laws in the airline industry, particularly during unprecedented events like Winter Storm Elliott. It also highlights the importance of airlines maintaining robust customer service and communication protocols during disruptions to avoid significant financial penalties and reputational damage.