An Updated Compensation System for Southwest Airlines Under the New Transportation Enforcement Requirements and Its Role in Providing Customer Recommendation

“Taking care of passengers is not just the right thing to do — it’s required, and this penalty should put all airlines on notice to take every step possible to ensure that a meltdown like this never happens again,” Buttigieg said.

Southwest Airlines paid hundreds of millions of dollars in reimbursements to travelers who needed hotels and ground transportation because of the canceled flights. Payments for Southwest passengers who are stuck with delayed flights may be guaranteed by the new requirements of the DOT.

Under the agreement, Dallas-based Southwest is required to establish a $90 million compensation system for future passengers affected by significant delays and cancellations, which counts as part of the $140 million penalty.

“We have spent the past year acutely focused on efforts to enhance the Customer Experience with significant investments and initiatives that accelerate operational resiliency,” said Bob Jordan, Southwest Airlines President & CEO in a statement. We have become one of the world’s most admired and trusted airlines due to our commitment to Customers.

Southwest Airlines cost millions of travelers their flights when it stranded them during the holidays in 2022.