Southwest Airlines sued for not immediately refunding stranded customers

Southwest Airlines sued for not immediately refunding stranded customers

  • Finance
  • January 5, 2023
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A passenger is suing the embattled Southwest Airlines over the airline’s alleged failure to compensate him and hordes of other customers for canceled flights.

The airline’s contract of carriage requires refunds for canceled flights, as well as reimbursements for expenses incurred such as hotels, meals and rental cars, Louisiana-based passenger Eric Capdeville alleged in the proposed class action lawsuit.

“Southwest’s failure to provide prompt refunds for canceled flights not only violates its own contract of carriage but also violates federal law,” the lawsuit, filed in the Eastern District of Louisiana, states.

Dallas-based Southwest owes customers more than $5,000,000 in refunds, according to the lawsuit.

The lawsuit stems from the cancellation of thousands of Southwest flights over the holiday, which the airline attributed to winter weather.

No “comparable accommodation” provided

In October, Capdeville purchased two tickets to travel from New Orleans, Louisiana to Portland, Oregon on December 27, 2022. The flight was canceled and he had to give up reservations he had paid for in Portland.

Southwest “did not offer comparable accommodations on any other flight,” the lawsuit states. Capdeville was also not offered a refund. Instead, he was offered flight credit towards a future flight.

According to the lawsuit, this violates Southwest’s own contract of carriage.

The contract generally states that if the airline cancels or changes the flight schedule, at the request of a passenger, the passenger will be rebooked on another flight or the passenger will be refunded the fare. The airline also promises to provide refunds within seven business days of a refund request for tickets purchased with a credit card, or 20 days for tickets purchased with cash.

“Neither provision provides for a ‘credit’ for use on a future Southwest flight,” the lawsuit reads.

Capdeville claims he was not offered comparable flight accommodation and was therefore owed a refund for the tickets he bought, which he was unable to use.

Efforts to “do the right thing” are underway

Southwest Airlines announced Tuesday it would be offering 25,000 frequent flyer points, worth more than $300, to travelers affected by the epic meltdown.

Southwest told CBS MoneyWatch that it was in the process of refunding passengers affected by the holiday debacle.

“Several high-priority efforts are being made to do the right thing by our customers, including processing refunds for canceled flights and reimbursing customers for expenses incurred as a result of irregular operations,” the airline said in a statement . “In fact on December 28th we launched a website to assist customers in applying for refunds and refunds and these requests are being processed and issued at www.southwest.com/traveldisruption.”

Regardless, experts expect Southwest will suffer long-lasting reputational damage and face lawsuits from various parties.

“There’s a standard pattern after a big reputation event. It is the event that is usually emotionally charged and leaves many people disappointed and after that all the different stakeholders will have their say. Customers will, of course, be disappointed, employees will be disappointed, and shareholders will be disappointed,” said Nir Kossovsky, reputational risk expert.

“Everyone has a piece of disappointment that will manifest itself in behavior — often litigation — that will cost Southwest a long time,” Kossovsky added. “A reputation event has a very long tail.”

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