Southwest will pay a $140 million fine for its meltdown during the 2022 holidays
MARY LOUISE KELLY, HOST:
It's been nearly a year since a meltdown at Southwest Airlines left millions of passengers stranded during the holiday season. Now that unprecedented mess has resulted in an unprecedented fine. Federal regulators have ordered Southwest to pay a civil penalty of $140 million. NPR transportation correspondent Joel Rose is here in the studio with details. Hey, Joel.
JOEL ROSE, BYLINE: Hey, Mary Louise.
KELLY: I'm getting hives just remembering this. My family was all caught up in this fiasco. Remind everybody else what happened last December and why it was such a fiasco.
ROSE: Yeah. I'm sure you need no reminders, but a major winter...
KELLY: No, the details are fresh and painful.
ROSE: So a major winter storm disrupted travel across the country. This is late December. Most airlines recovered relatively quickly. Southwest did not. The airline ultimately canceled more than 16,000 flights, stranded more than 2 million passengers. There were probably a lot of reasons for this failure, but a big part was outdated scheduling software at Southwest.
KELLY: And this penalty, 140 million bucks - that's a lot of money. It goes without saying. How did we wind up with that figure?
ROSE: The Department of Transportation says this is by far the biggest action it's ever taken for consumer protection violations. DOT says it is warranted because Southwest violated the law, specifically by not providing adequate customer service or flight status notifications and failing to give prompt refunds. Here's Transportation Secretary Pete Buttigieg speaking today on Morning Edition.
PETE BUTTIGIEG: This is not just about Southwest. This is about the entire industry sending a signal that you should not be cutting corners because if you fail your passengers, we will hold you accountable.
ROSE: I should note this penalty has several different components. There is a $35 million cash penalty and also $90 million in the form of a compensation fund for future Southwest passengers who are affected by delays or cancellations.
KELLY: And what is Southwest saying?
ROSE: It's interesting to note that Southwest is characterizing this somewhat differently than the Department of Transportation as a, quote, "consumer-friendly settlement," unquote. They're emphasizing the $90 million compensation fund, what the airline is calling an industry-leading policy. Even before this penalty, Southwest had already paid more than $600 million in refunds and reimbursements. The airline CEO says Southwest has spent the last year focused on ways to enhance the customer experience and also improve operational resiliency.
KELLY: OK, well, that prompts the question, do we think they have succeeded, or is the aviation system in general in better shape than last year?
ROSE: The Department of Transportation would say yes to that question. We just had a record-setting travel day on the Sunday after Thanksgiving, and there were no major problems. In general, airlines have been performing better this year by certain metrics. Cancellations are down a lot. But despite those improvements, passengers are still not happy. I talked to Teresa Murray, consumer advocate with the U.S. Public Interest Research Group. Here is some of what she said.
TERESA MURRAY: The complaint data is pretty jaw-dropping that people are still ticked off and unhappy with their airline experience.
ROSE: Murray says formal passenger complaints through the first five months of 2023 are double what they were last year, so she says it's encouraging that cancellations are down. But delays, meanwhile, are up, and complaints about mishandled luggage are up as well.
KELLY: NPR's Joel Rose. I wish you luck this travel season, and thank you.
ROSE: Same to you. Thanks.
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