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Southwest Airlines Melted Down. Now Its Passengers Are Waiting Again—for Reimbursements

Written by Kevin V. NguyenPublished Jan. 04, 2023 • 4:00pm
Afsaneh Z. sits with a Southwest Airlines plane behind her as she waits for boarding inside the Oakland International Airport on Nov. 30, 2022. | Camille Cohen/The Standard

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When Southwest Airlines completely melted down during the holiday season, it abandoned its customers twice. Once, was at the airport. The second time was at the customer service line, as stranded flyers await reimbursements for lost time and money. 

According to FlightAware, a flight tracking service, the second-biggest airline in the country canceled nearly 16,000 flights nationwide between Dec. 22 and New Year’s Eve. While Southwest spent an entire week “resetting,” its stranded customers were forced to spend their own money on hotel rooms, rental cars and flights on other airlines. 

Wait times to rent a car at San Jose International Airport were lengthy after Southwest Airlines’ computer meltdown. | Kevin V. Nguyen/The Standard

Yet, a week removed from the disaster, the only thing Southwest customers have gotten so far is 25,000 Rapid Rewards bonus points (roughly equivalent to $300) that they can redeem for future flights, merchandise or gift cards within the airline. 

“I’m not much of a traveler to benefit from vouchers,” said John Williams, who was stranded at San Jose International Airport (SJC) for three days en route to Oregon. “It was miserable. I would have rather been compensated with cash. I have bills to pay, not places to be.” 

In a letter sent to customers viewed by The Standard, Southwest CEO Bob Jordan said that the credits were only a “gesture of goodwill” and that the airline was still processing reimbursement requests. 

“No amount of financial compensation can fully make up for passengers who missed moments with their families that they can never get back,” Secretary of Transportation Pete Buttigieg wrote in a letter to Jordan. “That’s why it is so critical for Southwest to begin by reimbursing passengers for those costs that can be measured in dollars and cents.”

Those costs—the time spent sleeping in the cold airport terminal instead of Christmas at home, for long taxi rides, and expensive airport meals—are substantial. But is the airline legally required to cover them?  

Southwest Airlines saw more than 16,000 cancellations in a 10-day period, forcing passengers to cover auxiliary expenses like food and accommodations. | Kevin V. Nguyen/The Standard

U.S. Law Compared With Overseas

According to the Department of Transportation (DOT), airlines are only required to refund passengers for the cost of the canceled flights and, in some cases, for lost or damaged baggage with maximum liability limits.  

Airlines are required to deliver “prompt” refunds. DOT defines that as within seven business days if a passenger paid an airline with a credit card, or within 20 days if paid by cash or check. In 2019, Southwest also committed to processing credit card refunds within that time. 

In other words, passengers traveling within the U.S. are not legally entitled to anything beyond the price of the airplane ticket. 

If you live in the European Union, however, you have added protection through what is called the Air Passenger Bill of Rights. That law guarantees reimbursement or outright accommodations for meals and lodging, proportionate to the time lost because of delays or cancellations.

Canada goes a step further. In its passenger protections, it stipulates actual monetary amounts passengers are entitled to depending on the length of their delay—for example, $1,000 if delayed for nine or more hours at a major airline. 

When asked about its commitment to reimbursements, Southwest Airlines forwarded its CEO’s video response and would not confirm any payment timelines or respond to questions about the volume of requests it had received. 

Like other major airlines, it tries to accommodate passengers with vouchers and hotel rooms, but is limited to supply. In other words, if all available hotel rooms are booked, passengers may be out of luck.

On Christmas Day, a stranded John Williams twice approached the Southwest desk at SJC to ask for hotel and food vouchers. 

“They ran out,” he said. 

Asked for comment, Southwest said, “We’re truly sorry to hear of Mr. Williams’ plight.” 

San Jose International Airport saw many passengers stranded due to Southwest’s December meltdown. | Kevin V. Nguyen/The Standard

Return of the Travel Agent?

Jacques Martinet, a manager at Calparrio Travel Services in San Francisco, said that customers traveling domestically in the U.S. tend to have less options for recourse compared with their international counterparts. 

He said he has never seen a mass cancellation like Southwest Airlines’, and even though he lamented that the meltdown was “unfortunate,” he doesn’t foresee any wholesale industry changes as a result. 

“I look at it the same way as when people ask me if it’s dangerous to live in SF because of earthquakes,” Martinet said. “This sort of stuff happens.” 

The situation, Martinet said, reminded him of Murphy’s law, which says that anything that can go wrong will go wrong. To him, the situation highlights the benefits of using a travel agent—a profession that has diminished in importance in recent decades as most people prefer to book their own travel.

“When something happens, the agency that issued you the ticket owns it and therefore owes you,” he explained. “Otherwise, you can only wait and hope the airline makes it right.”

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