Southwest Airlines started issuing $75 vouchers on Tuesday to customers who had their flights canceled or delayed by longer than three hours. The refunds come at a time when the company is facing a huge shakeup following disappointing revenues in the first quarter of 2024, when it reported a net loss of $231 million—$0.39 per diluted share.
The vouchers, according to Southwest, are only being issued when the delay or cancelation can be considered the airline's fault—as in the case of a staffing or maintenance issue—while refunds won't be available in cases of weather conditions like rain, wind and fog. Flights must be canceled within seven days of the departure date for passengers to be entitled to the vouchers.
Read more: The Best Credit Cards to Save on Airfare
The airline was ordered to provide compensation for delayed and canceled flights by the U.S. Department of Transportation after the scheduling crisis of December 2022, when the company canceled more than 60 percent of its flights in the span of two days.
"The new voucher policy went into effect on April 16," a spokesperson for Southwest Airlines told Newsweek in response to a request for comment. For passengers who are not able to reach their destination within 3 hours due to a cancellation or delay under Southwest's control, the airline is "now proud to offer a voucher upon request via an all-new digital process," the company writes. Customers can request a voucher at southwest.com/delayform.
Like many other major U.S. airlines, Southwest struggled with the impact of a major winter storm in December 2022, which caused disruption in the aviation sector and caused cancelations and delays across the country.
While most airlines got back on track within a few days, Southwest had its biggest operations meltdown in its entire history in the same month, continuing to cancel thousands of flights. In total, the airline canceled 16,900 flights and left 2 million passengers stranded at airports.
The U.S. Department of Transportation described the rate of cancelations and delays by Southwest as "unacceptable." Roughly a year later, in December 2023, Southwest agreed to pay a $140 million penalty over the 2022 crisis.
Read more: How to Choose a Travel Credit Card
The settlement reached by the airline includes a $35-million cash fine and a three-year mandate obliging Southwest to pay $90 million in travel vouchers of $75 or more to passengers affected by delays and cancelations for which it can be considered responsible.
"If airlines fail their passengers, we will use the full extent of our authority to hold them accountable," said U.S. Transportation Secretary Pete Buttigieg at the time of the settlement.
"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."
While the airline has made significant updates to its technology and consumer service since December 2022 to improve its operations and has reported record first-quarter revenue of $6.3 billion this year, it has suffered a financial blow mostly due to ongoing problems with aircraft manufacturer Boeing.
Read more: Compare the Best Credit Cards for Travel
For months, Boeing has been experiencing incidents that have increased scrutiny on its work and the safety of its planes. As a result of the manufacturer's problem, Southwest is expected to receive only 20 new Boeing aircraft in 2024, against an initially planned number of 46.
In order to cut costs, Southwest announced earlier this month that it would end all services at Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, Houston's George Bush Intercontinental Airport, and Syracuse Hancock International Airport in New York. The airline will also cut capacity at Hartsfield-Jackson Atlanta International Airport and Chicago O'Hare International Airport.
Update, 5/1/2024 10:50 a.m. ET: This article was updated to include a comment from Southwest Airlines.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Giulia Carbonaro is a Newsweek Reporter based in London, U.K. Her focus is on U.S. and European politics, global affairs ... Read more
