Southwest Airlines to pay $140 million for 2022 holiday meltdown

(NBC, KYMA/KECY) - Southwest Airlines has agreed to pay a record $140 million to settle a federal investigation into the company's meltdown last December when it canceled thousands of flights and stranded more than two million travelers over the holidays.

The chaos began when blizzard-like conditions hit several cities across the nation, leading to a domino effect of canceled flights and crew rescheduling problems.

Southwest will pay a $35 million fine as part of that $140 million agreement.

Most of the settlement will go toward compensating future passengers, which the U.S. Department of Transportation considers an incentive for southwest to avoid repeating last winter's mess.

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

"Focus to the future"

Transportation Secretary Pete Buttigieg said, "This penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again."

The airline said it has learned from the event, and now can shift its entire "focus to the future."

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 and by failing to fulfill a requirement that airlines notify the public within 30 minutes of a schedule change.

In that consent order, Southwest disputed many of the transportation department's findings and said only a small percentage of refunds were issued late, but the company said it entered the agreement to settle the matter.