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Southwest Will Pay a $140 Million Fine For Its Meltdown During the 2022 Holidays 45

Posted by msmash from the time-to-pay dept.
Southwest Airlines is still paying for its meltdown during the 2022 holidays that stranded millions of travelers -- and the tab is growing. From a report: The U.S. Transportation Department has ordered Southwest to pay a $140 million civil penalty, part of a broader consent order after the airline's operational failures a year ago. That penalty is by far the largest the DOT has ever levied for consumer protection violations, according to a statement from the department. "This is not just about Southwest," Transportation Secretary Pete Buttigieg said in an interview with NPR's Morning Edition on Monday. "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."

A major winter storm last December caused travel disruptions across the country as airlines canceled thousands of flights. But while other airlines recovered relatively quickly, Southwest fell apart. The airline ultimately canceled 16,900 flights, stranding more than 2 million passengers. In a statement, Southwest described the agreement as "a consumer-friendly settlement." The airline says it has taken steps since last year's disruption to improve its operational resiliency and customer care.
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Southwest Will Pay a $140 Million Fine For Its Meltdown During the 2022 Holidays More

Southwest Will Pay a $140 Million Fine For Its Meltdown During the 2022 Holidays

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  • If you read the article, 35m of that 140m settlement includes paying the US treasury 35m. Why?

  • I look forward ... (Score:3)

    by PPH ( 736903 ) on Monday December 18, 2023 @11:08AM (#64089083)

    ... to Southwest's new meltdown penalty surcharge on my next flight.

    • Re: (Score:3)

      by SirSlud ( 67381 )

      Harhar, but .. 25.44 billion revenue in 2023, 140 million penalty. If they want to "make it back" in a year, their average fare (@ $140 dollars in 2021 to pick a number) would increase by something less or around a dollar. I'm sure they're not happy about having to pay the penalty, but it probably doesn't move the needle on comparative pricing to the consumer.

      • yeah, I just read an article about how THIS YEAR in the USA the airlines are all making record breaking profits... So, I know that $140 million wouldn't hurt Southwest one bit. Fines need to be painful for the fined in order to encourage actual change.
    • For the last two or three decades would be enough competition that they couldn't just pass every cost on to you and get away with it. Elections have consequences and one of them is a complete lack of antitrust law resulting in price gouging. Something to think about the next time you sit down to vote (or stand up if you're someplace that doesn't have vote by mail)

    • Funny you should pick on Southwest's pricing, they are the LEAST likely of all the airlines to tack on absurd fees. I think they're the only major airline that still lets you check two bags for free, a "privilege" that costs you $100 or so on other airlines.

    • ... on my next flight.

      Good news: Every other air passenger service doesn't have a "meltdown penalty", so they'll be cheaper: Your wallet will not be affected. Also, those services are more likely to tolerate the next scheduling anomaly, better than SouthWest did.

  • I was affected by the Southwest debacle (Score:5, Informative)

    by UMichEE ( 9815976 ) on Monday December 18, 2023 @11:34AM (#64089153)

    I was on a flight that was canceled in this debacle. It was pretty terrible. We spent 6-7 hours at the airport only to have the flight eventually get canceled. Then we drove for 2 hours home in a snowstorm. We didn't get our checked bags back from Southwest for at least a week and we ended up having to cancel our plans to visit family for Christmas because we couldn't get another flight out.

    Southwest paid all of our costs associated with them losing our bags (e.g. I bought a new electric razor, my wife bought a bunch of makeup, we bought some clothes for our toddler, etc.) without asking any questions. Without me requesting it, Southwest $300+ worth of points to both my wife and I, despite the fact that we hadn't paid for her ticket (companion pass).

    Southwest definitely screwed up, but honestly, I think they paid for it. I'm not really sure what a $140M fine does on top of the $800M that the airline says it lost because of the ordeal. Seems like the fine is mostly about people in the government feeling good, as the details say that the majority of it goes to a fund to pay travelers affected by cancellations (something Southwest was already doing). Note that none of this $140M will go to me or anyone else affected by this incident.

    • The fine is probably so they upgrade their systems so this doesn't happen again. There are articles about how outdated their systems are so maybe this is a further kick in the ass to fix it.
      • That already happened as well:

        Jan. 20, 2023

        Southwest Airlines has committed more than $1 billion of its annual operating budget to maintaining and upgrading IT systems, CEO Bob Jordan said in a Tuesday letter addressed to the carrier's rewards customers. The investment is part of a 5-year strategic plan, Jordan said in a Dec. 31 memo."

    • It's a government shakedown fine, yes? I have no idea what happens to the money from fines but is it any different from LE asset forfeiture?

  • I read a big opinion piece by some airline regulator guy who went on about his belief Southwest didn't make any significant changes after the disaster in 2022, so we'd see a repeat of the same service meltdown/dysfunction this year.

    Southwest's management, of course, claimed the opposite, giving a laundry list of supposed improvements and changes they made to various things.

    I'd say this is one of those events that "stress tests" the system they put in place, so it's a great learning experience for Southwest

    • I read a big opinion piece by some airline regulator guy who went on about his belief Southwest didn't make any significant changes after the disaster in 2022, so we'd see a repeat of the same service meltdown/dysfunction this year.

      Southwest's management, of course, claimed the opposite, giving a laundry list of supposed improvements and changes they made to various things.

      I'd say this is one of those events that "stress tests" the system they put in place, so it's a great learning experience for Southwest

    • Re: (Score:3)

      by tlhIngan ( 30335 )

      I read a big opinion piece by some airline regulator guy who went on about his belief Southwest didn't make any significant changes after the disaster in 2022, so we'd see a repeat of the same service meltdown/dysfunction this year.

      Southwest's management, of course, claimed the opposite, giving a laundry list of supposed improvements and changes they made to various things.

      I'd say this is one of those events that "stress tests" the system they put in place, so it's a great learning experience for Southwest

      • (it took half an hour to compute a solution)

        I'm not a bit surprised at that. Back in the day, I worked at JPL with the man who was responsible for the then latest iteration of TRAM (TRAjectory Moniter) that calculated where our space probes were and where they were going, and was run on a UNIVAC computer that was one step down from a supercomputer. Depending on what you needed, one TRAM run would need at least one, and maybe more numeric integrations. You'd come in first thing in the morning, start th

  • Passengers not Government (Score:3)

    by Roger W Moore ( 538166 ) on Monday December 18, 2023 @12:38PM (#64089341) Journal
    Why is the government getting money from this given that it was the passengers who were the ones who suffered? Instead of a fine that goes to the government how about punitive damages - assuming that all the actual costs were already paid - for the passengers affected?

  • They stopped their commitment to upgrading software infrastructure to save a few million of dollars a year about 10 years before this.

  • What real changes have been made? The airline industry, like the banking industry, is known for using decades old, broken, falling apart software, using old infrastructure, that is held together with wishes, prayer and really smart old people who can't die.

    What needs to happen is a modernization movement, and not just for airlines, for everyone. Just because the software works, is not a good enough reason to leave it alone, and just because the server works, is not a good enough reason to keep it onlin
  • We do, in ticket prices and/or more bailout money.

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