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Southwest Airlines has settled a class-action lawsuit filed by a Chicago attorney over the discount carrier’s decision to stop honouring vouchers for free alcoholic drinks, which it had given to travellers who bought a premium ticket. The settlement could be worth $29 million or more.Adam Levitt, an attorney and the original plaintiff, said Southwest had for years awarded customers like him, who bought tickets through its premium-priced “Business Select” program, vouchers for drinks that otherwise cost $5 each. Vouchers did not include expiration dates.
On Aug. 1, 2010, Southwest, the third-largest airline in the Chicago market, changed its policy. It said Business Select passengers may use their vouchers only on the day of travel printed on them, essentially voiding all previously issued vouchers.
Levitt contended the policy change was a breach of contract. He filed suit on Nov. 16, 2011, on behalf of himself and all Southwest customers who earned eligible drink vouchers before Aug. 1, 2010, through their ticket purchase but didn’t redeem them. The settlement does not include passengers who earned drink vouchers through Southwest’s frequent-flier program, Rapid Rewards.
The settlement, approved this week by a federal-court judge in Chicago, entitles eligible fliers, even if they no longer possess the original paper vouchers, to new drink vouchers for each one they say they earned but didn’t redeem. Those vouchers will be good for one year. Eligible consumers will be notified, starting in a couple of weeks. Southwest is required to set up a website about the settlement, publish newspaper advertisements about the settlement and attempt to contact eligible customers via e-mail.
“This settlement is a grand-slam result for the class, as consumers are recovering 100 cents on the dollar,” said Chicago attorney Joseph Siprut, who represented the class against Southwest.
Siprut said his firm fought for a claims process in which physical possession of the old drink voucher was not required. “Class members just have to submit a form saying they had a certain number of vouchers that were never redeemed, and they can get replacement vouchers in equal number,” he said.
The settlement estimates that 5.8 million eligible vouchers, issued between October 2007 and August 2010, were not redeemed. Valued at $5 each, that makes the settlement worth $29 million. Separately, Southwest is on the hook for attorney fees that could range from $1.75 million to $7 million. The court will decide that later, Siprut said.
Southwest, known for being consumer friendly, did not respond to a request for comment.
“Airline customers are very savvy,” Siprut said. “They are sophisticated travellers and they don’t take kindly when airlines break their promises to consumers, or pull a bait-and-switch on people.”
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