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Southwest Airlines didn’t have much to be merry about during the holidays last year. The airline suffered a meltdown that canceled 16,900 flights and stranded over two million passengers around Christmas and New Year’s. The Department of Transportation (DOT) said at the time that Southwest would be held accountable and now we know just what that accountability looks like. Southwest faces a penalty of $140 million, which is 30x more than any prior penalty the DOT has doled out for consumer protection violations.
The majority of the $140 million penalty will go toward compensation for future Southwest passengers that have been impacted by delays and cancellations. This includes a $35 million cash fine and a three-year mandate that Southwest provide $90 million in travel vouchers of $75 or more to passengers delayed at least three hours in getting to their final destinations because of airline-caused issues. This is in addition to the $600 million that Southwest already had to pay out in refunds and reimbursements to passengers impacted last year.
The DOT found that Southwest violated the following consumer protection laws:
- Failure to provide adequate customer service assistance
- Failure to provide prompt flight status notifications
- Failure to provide refunds in a prompt and proper manner
Anthony’s Take: Southwest’s antiquated software and general mismanagement made tons of people miss time with loved ones and friends last year. It’s good to see the DOT step in to remedy the situation and hopefully this year’s holidays will go much smoother.
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