Southwest Faces Potential DOT Fine, Customer Lawsuits From Holiday Meltdown

Almost a year later, Southwest Airlines is bracing itself for what will likely be a hefty fine from the Department of Transportation (DOT).

It all stems from last year’s epic December 2022 meltdown around the Christmas holiday in which tens of thousands of people had their flights either delayed or canceled.

Southwest apparently knows the fine is coming and is waiting to be notified.

What they don’t know are the details of the penalty. But judging by the initial reaction of Transportation Secretary Pete Buttigieg, who called the situation “unacceptable,” it will likely be a substantial penalty.

More than 20,000 flights were affected by a combination of bad weather and a breakdown in the booking software that Southwest had used. That it came during the holidays, one of the most heavily traveled periods of the year, contributed to an unfortunate situation.

"While weather can disrupt flight schedules, the thousands of cancellations by Southwest in recent days have not been because of the weather," Buttigieg wrote at the time last year in a letter to Southwest CEO Bob Jordan. "Other airlines that experienced weather-related cancellations and delays due to the winter storm recovered relatively quickly, unlike Southwest."

The airline compounded the problem by not providing proper and prompt refunds, aviation regulators said. What's more, Southwest did not provide adequate customer service, DOT found.

The airline has also hinted that it could face costs stemming from customer and shareholder lawsuits brought on by the debacle. 

In addition to delaying and canceling flights, Southwest had a problem with reassigning crews to their next location. The airline was even taken to task by some analysts who said it needed to modernize and upgrade its technology.

Southwest shares are down 32 percent so far this year. 

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