Southwest Airlines in $140 million deal with feds over debacle a year ago
CBSDec 31, 2023
The Facts
The US Transportation Department (DOT) on Monday handed Southwest Airlines a $140M fine for its failure to provide prompt customer service, flight notifications, and refunds during its operational meltdown last Christmas and New Year.
Of the $140M, $35M will be paid to the federal government, while Southwest will get a $33M credit for providing 25K frequent-flier points to affected passengers.
The Spin
Narrative A
If the Biden administration is attempting to make an example of Southwest, it's working. Considering the efforts Southwest went to in compensating affected passengers, this was an extremely harsh penalty. In any case, Southwest wanted to make things right, so it agreed to the fine even though it's already significantly improved its technology and customer service to avoid further instances of turmoil ahead of this year's holiday season.
Narrative B
The severity of the penalties imposed on Southwest is more than justified. 2022's holiday meltdown had catastrophic consequences for over two million passengers, and Southwest has since spent most of its energy dodging litigation. It remains to be seen whether improvements made to Southwest's systems will be successful, but it should soon become clear, as record numbers are expected to take to the skies in advance of the upcoming holiday period.
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