The U.S. Department of Transportation and Secretary Pete Buttigieg will require Southwest Airlines to give prompt refunds and reimburse extra expenses after its holiday cancellation meltdown, adding pressure from Washington to speed along a move the carrier is already making to placate customers.
The notice from Washington on Tuesday comes as Dallas-based Southwest Airlines is trying to dissect what actually happened to its crew scheduling systems that prompted more than 16,700 cancellations in late December and figure out how to prevent it from happening again.
“Since the Southwest meltdown, DOT has received thousands of consumer complaints about Southwest — including complaints about lack of ticket refunds and reimbursements for services when a traveler was stranded,” a DOT spokesperson said in a statement. “No amount of financial compensation can fully make up for passengers who missed moments with their families that they can never get back, but DOT will continue to work to ensure that Southwest takes care of its customers.”
Southwest has already promised to reimburse “reasonable” requests for reimbursement for people affected between Dec. 24 and Jan. 2 but said it will take time to process all of the claims, chief commercial officer Ryan Green said. The company has set up a website to process requests and has sent out vouchers worth about $300 in flight credits to customers whose plans were disrupted by the storm.
The company has blamed the meltdown on outdated crew scheduling systems that were not able to handle a large number of pilot and flight attendant reassignments after winter storms hit key airports such as Chicago and Denver.
Southwest said the operational breakdown will cost the company $725 million to $825 million in lost revenue, reimbursements and goodwill gestures, and analysts said there could be some hit to bookings early in 2023.
The department also says that Southwest must refund tickets bought on credit cards within seven business days and 20 days by cash or check for “flights that Southwest made significant changes to or canceled, regardless of the reason, unless the passenger accepted the alternative offered such as rebooking.”
It also said Southwest must provide reimbursements for hotels, meals and alternative transportation such as rental cars and flights on other carriers between Dec. 24 and Jan. 2.
The department is also pushing Southwest to give “substantive responses to all consumer complaints within 60 days or sooner.”
The notice from the executive branch department keeps the pressure on Southwest as it works to process reimbursement requests and faces scrutiny from other government branches in Washington as well. Congressman Colin Allred blasted Southwest for not participating in a call with lawmakers and the U.S. Senate Commerce, Science and Transportation Committee plans to hold hearings looking into the meltdown, chairwoman Maria Cantwell said in a statement.
Buttigieg has been a fierce critic of airline disruptions during the last two years since he took over the Transportation Department, going after carriers for summer delays and criticizing schedules that may have been too ambitious. He spoke with Southwest Airlines CEO Bob Jordan over the phone during the meltdown and sent a letter on Dec. 29 calling the disruptions “unacceptable.”
