Southwest Airlines fined $140m for holiday meltdown

Southwest Airlines has been fined a record $140m (£110m) by the US Department of Transportation (DOT) over its operational meltdown in 2022.

The penalty is about 30 times larger than any other previous fine levelled against an airline in US history.

Millions were left stranded after Southwest cancelled more than 16,900 flights during a busy week of holiday travel last winter.

US officials said the fine “sets a new precedent and sends a clear message”.

“If airlines fail their passengers, we will use the full extent of our authority to hold them accountable,” said Transportation Secretary Pete Buttigieg in a statement on Monday.

The majority of the fine will go towards compensating future Southwest passengers affected by cancellations or delays caused by the airline, while $35m will be paid to the government.

As part of the compensation fund, the Department of Transportation has mandated Southwest to issue passengers a $75 flight credit voucher if their arrival is delayed more than three hours for reasons within Southwest’s control.

In a news release on Monday, Southwest said it was pleased to have reached this settlement with US officials.

The company added that it has learned from last year’s travel meltdown and has made changes to improve its customer service.

The $140m fine is in addition to around $600m in refunds and reimbursements that the airline has been forced to pay to passengers impacted by last year’s mass cancellations.

DOT also announced it will be closing its investigation into whether the travel disruptions were caused by an unrealistic flight schedule set out by Southwest, saying it was unable to reach a firm conclusion.

Southwest has said it was cooperating with the investigation, which was launched in January.

“I can’t say it enough. We messed up,” CEO Bob Jordan told CNBC at the time.