Southwest Airlines has found itself in the spotlight as it settles with the U.S. Department of Transportation, resulting in a substantial $140 million fine

This penalty stems from the airline’s violation of consumer protection laws during the turbulent holiday disruptions that unfolded last year. What sets this fine apart is its significant scale, surpassing any previous penalties imposed by the DOT for violations related to consumer protection by a factor of 30.

The breakdown of the $140 million penalty includes a $35 million cash payment to the government, to be paid by Southwest over three years. The DOT has mandated that Southwest establishes a fund aimed at compensating future travelers who might face flight disruptions within the airline’s control. As a gesture of recognition for the disruptions faced by passengers, Southwest has additionally granted $33 million worth of frequent flier miles to individuals affected by the mentioned incidents.

The DOT’s investigation identified significant lapses in Southwest’s customer assistance efforts during the holiday meltdown. The airline’s call center was deemed overwhelmed, resulting in extended wait times and busy signals for customers seeking assistance. The DOT also faulted Southwest for the delayed issuance of refunds and reimbursements, underscoring these shortcomings in its examination of the process.

The holiday disturbances occurred when Southwest Airlines, reacting to severe winter weather, had to cancel nearly 17,000 flights during the year-end holiday season. This situation led to about two million passengers being stranded and imposed a substantial financial burden on the airline, surpassing $1 billion. To make amends, Southwest went on to reimburse and refund affected customers, totaling more than $600 million.

Southwest’s CEO, Bob Jordan, has publicly pledged that the issues contributing to the holiday meltdown last year will not be repeated. Speaking at an industry event in New York, he conveyed the airline’s commitment to preventing a recurrence of such disruptions. Notably, Southwest has undertaken a series of improvements, including the acquisition of additional de-icing equipment and the upgrade of crew scheduling technology. These improvements are designed to strengthen operational resilience and ensure readiness for winter operations, addressing the deficiencies that contributed to the tumultuous events of the past.