US carrier Southwest Airlines has reached a landmark USD$140 million (AUD$210 million) settlement over the massive travel disruption that stranded two million passengers and saw 16,900 cancellations over the December 2022 holiday period due to the historic Winter Storm Elliott.
The world’s largest low-cost carrier agreed to the civil penalty payout consent order from the U.S. Department of Transport (USDOT), resolving a lengthy government investigation.
The settlement includes a one-time USD$35 million (AUD$52.2 million) cash fine.
It also stipulates that Southwest provide USD$90 million (AUD$134 million) in travel vouchers of USD$75 (AUD$112) or more to passengers delayed at least three hours getting to final destinations because of an airline-caused issue or cancellation. Southwest will provide the vouchers on request.
The “industry-leading” US delay compensation program will commence by 30 April 2024 and the USDOT said it provided a “strong deterrent”.
North American Winter Storm 2022 disruptions
During the Winter Storm Elliott disruption, Southwest noted that it confronted unprecedented operational and volume-related challenges and provided more than USD$600 million (AUD$895 million) in ticket refunds, expense reimbursements and goodwill gestures.
The travel chaos caused USD$1 billion (AUD$1.5 billion) in costs to the LCC.
Since the disruption, Southwest Airlines has added winter weather operational improvements via its Disruption Action Plan completed earlier this year, which includes more de-icing equipment across its network, new staffing and software and the use of artificial intelligence to predict network health.
As a result, the airline has seen significant operational efficiency in 2023.
Southwest Airlines President & CEO Bob Jordan said: “We have spent the past year acutely focused on efforts to enhance the customer experience with significant investments and initiatives that accelerate operational resiliency, enhance cross-team collaboration and bolster overall preparedness for winter operations.”
Southwest has also been trending on TikTok for its longstanding Customer of size and extra seat policy.
For more info, head to southwest.com
