Southwest Airlines has been fined $140 million by the U.S. Department of Transportation stemming from last year's holiday meltdown — a record fine. As part of the settlement, the government requires Southwest to create a $90 million fund for eligible Southwest passengers delayed by future travel disruptions between April 30, 2024, to April 29, 2027.
Here's what you need to know about when you qualify for the benefits and what you can do to protect yourself in the event of a trip delay with any airline.
Who qualifies for Southwest's future delay voucher
During its meltdown over the 2022 holidays, Southwest canceled over 16,000 flights and doled out over $600 million in refunds and reimbursements to customers. On top of that, it gave 25,000 Southwest points to passengers affected by the cancellations.
The $90 million fund provides an additional avenue for compensation to future Southwest passengers if their travel plans are interrupted. Southwest is required to issue you a $75 voucher if your travel is impacted by anything within Southwest's control and you arrive at your destination three hours or more after your scheduled arrival time. These vouchers are valid for "future use on the airline," according to the DOT's announcement.
Southwest's current standard flight cancellation policy doesn't have any change or cancellation fees. And you're eligible for a refund as long as you cancel at least 10 minutes before the scheduled departure time. If you book more expensive refundable fares, you can be reimbursed 100% of the cost to your original form of payment. For the cheaper non-refundable fares, you'll receive a 100% refund in the form of a Transferable Flight Credit, which can be used for a future flight or transferred (one time) to another Southwest Rapid Rewards member.
Credit cards with trip delay coverage
If your airline won't cover the additional costs you incur from a delay, you may be covered by your credit card's trip delay reimbursement benefit. The Chase Sapphire Reserve® (see rates and fees) is a premium credit card with one of the most generous trip delay coverages you can get with a credit card. When you pay for travel with the card, you can be reimbursed up to $500 per ticket for additional expenses caused by an eligible delay. This benefit covers costs not paid for by the travel provider or other insurance including, lodging, meals, transportation and toiletries. An eligible delay is a delay of six hours or more or one that requires an overnight stay.
The Chase Sapphire Reserve® is a standout premium credit card with luxury perks including, hotel credits, complimentary hotel elite status, travel credits, dining credits, rideshare and delivery benefits and much more.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 100,000 bonus points after you spend $6,000 on purchases in the first 3 months from account opening.
- Get $3,000 in annual value with Sapphire Reserve.
- Earn 8x points on all purchases through Chase TravelSM, including The EditSM and 4x points on flights and hotels booked direct. Plus, earn 3x points on dining worldwide & 1x points on all other purchases
- $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year.
- Access over 1,300 airport lounges worldwide with a complimentary Priority PassTM Select membership, plus every Chase Sapphire Lounge® by The Club with two guests. Plus, up to $120 towards Global Entry, NEXUS, or TSA PreCheck® every 4 years
- Get up to $150 in statement credits every six months for a maximum of $300 annually for dining at restaurants that are part of Sapphire Reserve Exclusive Tables.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Coverage, Lost Luggage Insurance, no foreign transaction fees, and more.
- Get complimentary subscriptions to Apple TV and Apple Music for a minimum of one year when activated by June 22, 2027, a value of $288 annually.
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
If you're interested in credit card travel insurance but would like a cheaper travel credit card, the Marriott Bonvoy Bold® Credit Card is a good choice. It has no annual fee and comes with trip delay reimbursement coverage when your travel is delayed for 12+ hours or requires an overnight stay. You can be reimbursed up to $500 per ticket for reasonable expenses.
The Marriott Bonvoy Bold® Credit Card has basic benefits and no annual fee, which makes it ideal if you occasionally stay with Marriott and don't need premium perks.
Rewards
- Earn up to 14X total points for every $1 spent at thousands of hotels participating in Marriott Bonvoy® with the Marriott Bonvoy Bold® Card.
- Earn 2X points for every $1 spent at grocery stores, rideshare, select food delivery, select streaming, and internet, cable, and phone services.
- Earn 1X point for every $1 spent on all other purchases.
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
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Bottom line
Southwest was fined $140 million by the U.S. DOT because of its 2022 meltdown which stranded millions of passengers over the holidays. With this fine, the airline is setting aside $90 million to reimburse Southwest passengers for future travel delays. If you'd like to have additional coverage that applies to any airline, consider paying for your flights with a credit card that has trip delay insurance.
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