• The USDOT announced that it is looking into the allegations regarding Southwest Airlines.
• Southwest canceled more than 16,000 flights in the week ending December 29.
• USDOT also pledged to take action if Southwest did not adequately repay consumers.

The US Department of Transportation (USDOT) announced on Wednesday that it is looking into allegations that Southwest Airlines (LUV.N), which experienced a systems failure in December and had to cancel thousands of flights, participated in “unrealistic scheduling of flights.”

The government stated in a statement that a “rigorous and comprehensive investigation into Southwest Airlines’ holiday debacle that stranded millions” is in its early stages.

Southwest’s crew scheduling software was unable to accommodate personnel changes, leading to the cancellation of more than 16,000 flights in the week ending December 29. Congress is scheduled to hold hearings on the cancellations.

USDOT said on Wednesday that it is looking into whether “Southwest executives engaged in unrealistic scheduling of flights which under federal law is considered an unfair and deceptive practice,” despite the fact that the probe has previously been reported.

According to Southwest, it will “cooperate with any inquiry or request from government oversight or elected officials.” The airline defended its scheduling saying its “holiday flight schedule was thoughtfully designed and offered to our customers with the backing of a solid plan to operate it, and with ample staffing.”

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As it worked to recover, the airline stated, “while working to recover, our systems and processes became stressed by multiple days of flight cancellations across 50 airports in the wake of an unprecedented storm.”

Southwest has warned that the meltdown will result in a pre-tax impact of up to $825 million from lost revenue and is scheduled to announce profits on Thursday.

In addition, USDOT stated that it “will leverage the full extent of its investigative and enforcement power to ensure consumers are protected and this process will continue to evolve as the Department learns more.”

USDOT submitted thousands of complaints it received to the airline and pledged to take action if Southwest did not adequately repay consumers.

To hold airlines “accountable and deter future misconduct by seeking higher penalties that would not be viewed as simply a cost of doing business,” the department announced this month that it will seek stiffer penalties for airlines and other violators of consumer protection laws.

USDOT penalties for airline consumer breaches are frequently far less severe than the worst-case scenarios. After a USDOT probe concerning refund delays, Air Canada agreed to a $4.5 million settlement last year.

Air Canada received $2.5 million in credit for passenger refunds and paid just $2 million in fines, compared to the initial $25.5 million USDOT requested.

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