Southwest Airlines Reaches Settlement With Department of Transportation (DOT)

DALLAS – Southwest Airlines Co. (NYSE: LUV) is announcing today that it has reached a global settlement with the Department of Transportation (DOT) relating to the DOT's investigation into the December 2022 Winter Storm Elliott disruption. A link to the full Consent Order can be found here, which includes Southwest's position relating to the DOT's investigation. Southwest shares with the DOT the goal of delivering the highest standard of service to the traveling public and is grateful to have reached a consumer-friendly settlement that both credits past compensation that went above and beyond requirements for Customers and incorporates a future commitment for Southwest Customer care with a new industry-leading compensation policy. The remainder of the agreement will be settled in a one-time $35 million cash payment to be paid across a three-year period to the DOT. Southwest appreciates acknowledgement that it moved expeditiously to care for Customers, learned from the event, and now can shift its entire focus to the future.

During the Winter Storm Elliott disruption, Southwest apologized for the inconvenience and immediately took action to care for Customers and Employees—endeavoring to meet its own high standard for Customer Service as well as regulatory requirements. Southwest confronted unprecedented operational, volume-related challenges yet acted with diligence and in good faith. It quickly launched efforts across the operation to take care of Customers:

• Customer Calls:The volume of inbound calls Southwest experienced during Winter Storm Elliott far eclipsed any previous demand. In response, the airline quickly increased call center capacity as it diligently worked to serve the exceptionally high volume of Customers seeking assistance. Southwest provided regular updates to Customers regarding the higher-than-average wait times and directed them to the many additional channels that could be used to reach Southwest representatives or to obtain information.
• Ticket Refunds and Expense Reimbursements: Southwest provided more than $600 million in ticket refunds, expense reimbursements and goodwill gestures both during and following the disruption. An all-hands-on-deck effort processed requests for refunds as quickly as possible, and the airline mobilized volunteers to complete the vast majority of requests within the seven-day timeframe prescribed by the DOT. It also quickly built and launched a microsite to serve as an additional channel for handling refund requests. Customers were able to rebook travel with no additional cost, and Southwest granted all reasonable reimbursement requests for out-of-pocket expenses (including costs incurred from circumstances beyond the airline's control). As a goodwill gesture, the Company gifted 25,000 Rapid Rewards points (a value of approximately $300) to all Customers who experienced cancelled or significantly delayed flights during the disruption.
• Flight Status Notifications: Southwest made every effort to promptly notify Customers of flight disruptions through its numerous Customer channels, including using its third-party vendors to expedite Automated Outbound Messaging (AOM). Due to the volume of messages triggered across a short period of time, many AOM notifications were temporarily delayed; although the majority of passengers still received flight updates at least four hours before their scheduled departure time. As soon as Southwest became aware of the delay in message delivery, the airline worked with vendors to increase capacity. Since the disruption, Southwest has upgraded Customer communication tools and phone system capacity designed to more easily handle significant increases in volume.

Since the disruption, Southwest has taken many steps to boost Customer care and operational resiliency, including operational enhancements that are reflected in the airline's Disruption Action Plan completed earlier this year. Throughout 2023, including Thanksgiving and other busy holiday travel periods, Southwest has delivered strong operational performances as its investments continue to enhance reliability for Customers and Employees.

Southwest also implemented a roadmap to transform its Customer Experience, which includes the successful deployment of efforts like: digital bag tracking to provide Customers real-time information on the journey of their checked items; flight credits that don't expire, allowing Customers to retain their flight credits to use toward future travel; enhanced digital self-service capabilities, including the ability to request a refund if Customers choose not to travel due to a Southwest-initiated flight cancellation; expanded rebooking options after flight cancellations; and new Customer notifications during weather events that proactively provide rebooking options. 

And as part of today's announcement, Southwest is introducing a new, industry-leading policy that provides additional compensation (in the form of a voucher of $75 or greater), upon request, during controllable cancellations and delays that cause Customers to reach their final destinations three or more hours after their scheduled arrival. The policy will be implemented by April 30, 2024. This new policy for compensating Customers leads the industry and underscores Southwest's dedication to its award-winning Customer care.

"We have spent the past year acutely focused on efforts to enhance the Customer Experience with significant investments and initiatives that accelerate operational resiliency, enhance cross-team collaboration and bolster overall preparedness for winter operations," Bob Jordan, Southwest Airlines President & Chief Executive Officer said. "Our commitment to Customers has been central to our success across our 52-year history and has helped us become one of the world's most admired and trusted airlines."

Southwest stands proud of the resiliency, perseverance, and Heart Employees demonstrated while taking care of Customers both during and after the Winter Storm Elliott disruption. For more than five decades, Southwest has been world famous for focusing on operational reliability, high-quality Customer Service, and legendary Hospitality—core tenants of an ongoing commitment that will carry the Company forward.

ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 121 airports across 11 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline¹. Based in Dallas and famous for an Employee-first corporate Culture, Southwest maintains an unprecedented record of no involuntary furloughs or layoffs in its history. By empowering its more than 74,000² people to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 126 million Customers carried in 2022. That formula for success brought industry-leading prosperity and 47 consecutive years³ of profitability for Southwest Shareholders (NYSE: LUV). Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship. As the airline with Heart, Southwest has set a goal to work toward achieving net zero carbon emissions by 2050. Southwest has also set near-term targets and a three-pillar strategy to achieve its environmental goals. Learn more by visiting Southwest.com/planet.  

1. Based on U.S. Dept. of Transportation quarterly Airline Origin & Destinatio Survey since Q1 2021
2. Fulltime-equivalent active Employees
3. 1973-2019 annual profitability     

Media Contacts: 
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