Southwest Airlines fined millions of dollars for winter holiday chaos

Southwest Airlines will pay a $35 million fine as part of a $140 million settlement over a meltdown last winter that disrupted travel for about two million people during the holiday season.

Most of the money will go toward compensating future passengers, which the US Department of Transportation considers an incentive for Southwest to avoid repeating last winter’s mess.

The government said the assessment was the largest it has ever imposed on an airline for violating consumer protection laws.

Transportation Secretary Pete Buttigieg said the settlement demonstrates his agency’s resolve to make airlines take care of their passengers.

“This penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again,” he said.

Southwest said it was “grateful to have reached a consumer-friendly settlement” giving the airline credit for compensation it already provided to customers. The airline said it has “learned from the event, and now can shift its entire focus to the future.”

The assessment stems from nearly 17,000 cancelled flights a year ago, starting as a winter storm paralyzed Southwest operations in Denver and Chicago and then snowballing when a crew rescheduling system couldn’t keep up with the chaos.

Even before the settlement, the nation’s fourth-biggest airline by revenue said the meltdown cost it more than $1.1 billion in refunds and reimbursements, extra costs and lost ticket sales over several months.

The government said in a consent decree dated Friday that Southwest “violated the law on numerous occasions,” including by failing to help customers who were stranded in airports and hotels, leaving many of them to scramble for other flights.

Many who called the airline’s overwhelmed customer service center got a busy signal or were stuck on hold for hours.

Southwest also did not keep customers updated about cancelled and delayed flights, failing to fulfill a requirement that airlines notify the public within 30 minutes of a change. Some said they never got an email or text notice and couldn’t access Southwest’s website.

The government also charged the airline as it did not provide refunds quickly enough.

Passengers whose refund requests to a special Southwest website…