US DOT Waives $11 Million of Southwest Airlines' 2022 Fine Citing Operational

The U.S. Department of Transportation (DOT) has waived the final $11 million payment of a $140 million civil penalty previously imposed on Southwest Airlines. This penalty originated from a 2023 settlement with the Biden administration following the airline's operational collapse during a severe winter storm in December 2022. The widespread disruption led to the cancellation of 17,000 flights and stranded over 2 million travelers, prompting the DOT to declare it the largest fine ever levied against an airline for consumer protection violations.

The original settlement stipulated that most of the $140 million would be directed towards compensating affected travelers, with $35 million designated for the U.S. Treasury. Southwest Airlines made two $12 million payments towards this Treasury portion in 2024 and earlier this year, leaving an outstanding $11 million due by January 31, 2026. The DOT's decision to waive this final installment recognizes Southwest's significant investments in enhancing its network operations and achieving substantial improvements in on-time performance. The department stated this approach incentivizes airlines to invest in operational resiliency, directly benefiting consumers.

Southwest Airlines expressed gratitude to the Department of Transportation and Secretary Sean Duffy, acknowledging the recognition of its modernization efforts. The airline affirmed its successful operational turnaround over the past two years, citing industry-leading on-time performance and completion rates. The December 2022 meltdown, which saw the airline's crew-rescheduling system overwhelmed, cost Southwest more than $1.1 billion in refunds, reimbursements, and lost ticket sales, according to company statements made prior to the settlement.