Southwest Flight Delay Compensation
You hear that? That is the sound of Southwest destroying whatever credibility they had built up with their customers over the course of decades. They did it in a matter of a week. I have been doomscrolling Twitter looking at the baggage piling up, the terminal long lines for the help desk and people sharing their horror stories. Many of our readers have been right in the middle of it, and that makes me terribly sad. This is the time of the year that should bring families together and be filled with holiday cheer. That has been replaced with stress, financial burden and a worst nightmare scenario for most people.
You know what really irks me though? It is the fact that they don’t have to give their customers anything even as their system has completely failed them. They are not required to give them a hotel room, food or compensation. They probably will give them some of these things proactively, but that is if the customers can actually reach someone. I compare that to winning the lotto right now. Nothing is guaranteed though and many won’t pursue it anyway. They will end up spending a ton more money to fly with someone else, Southwest has no interline agreements after all, or rack up PTO days and hotel bills waiting it out. They may have to eat their prepaid hotel etc. if they were on their way to a trip they saved up for and looked forward to all year.
All of this got me to thinking, what if Southwest was in Europe? How much would this cost them?
My Fuzzy Southwest EU261 Math
Let’s do some back of the napkin calculation fun here and see how unprecedented this would be, and how much the liability SHOULD be for Southwest. What would EU261 cost them if it were in effect? If anything comes of this hopefully it is the US Government growing a pair, and keeping the lobbyists at bay long enough to put in proper protections for their constituents. Yes, Washington…you actually work for US!
Yesterday, Southwest cancelled 2,909 flights and today they cancelled another 2,522 already (it is only 9AM). That doesn’t include everything they cancelled since Christmas and what they will cancel the rest of the week. Let’s call it 15,000 flights when it is all said and done. Since they have to take the time to do this whole reset thing, and are telling people they won’t get out till Saturday at the earliest. Dang, 15,000 in total may be low. Although, to be fair, some of these cancellations are people getting doubled up. I also don’t want to hear about weather causing this, this goes way beyond a two day storm.
The EU261 law gives compensation based on distance traveled. The amount ranges from $250 for anything less than 932 miles, $400 if between that and 2175 miles and $600 if above 2175 miles. The amounts are in euros but since they are pretty much equal right now I just swapped it over to dollars.
Crunching The Numbers
Let’s make this easy and average it at $325 per flight, since Southwest has a lot of shorter flights. Each plane can fit 156 passengers on average. So here is the very basic estimate math:
15,000 flights X 156 passengers per (averaged across their fleet) X $325 per passenger = $760,500,000
That is three quarters of a billion right there. We haven’t even gotten into lost baggage claims, incidental expenses and the rest that is required to be offered by airlines under EU261. That would have to push the number over $1 billion in total. Sit back and think about that for a minute, it is a massive number. That is what the DOT should fine the airline at and then send to everyone affected. Instead they will likely hit them with a fine that is a small fraction of that. Southwest will probably “take care of their customers” by sending out some $200 expiring vouchers as an apology. Just watch! I mean the DOT fined airlines $7 million for withholding refunds customers were due. And, that was after they got their government hand out. Don’t hold your breath here.
I hope something good comes from this. This meltdown has gone viral and mainstream in a way never before. It may actually get enough push back that the government has to finally seriously consider consumer protections for air travel. If it doesn’t happen now I have my doubts it ever will.
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