DOT Waives $11 Million of Southwest’s Penalty Over 2022 Meltdown

The Trump administration announced Saturday that it is waiving part of the $140 million penalty tied to Southwest Airlines’ December 2022 meltdown. Under the decision, the Department of Transportation will grant the airline an $11 million credit. 

The DOT said, “In lieu of a payment of an $11 million civil penalty to the government, this order provides Southwest with an $11 million credit for significantly improving its on-time performance and completion factor through its $112.4 million investment in its Network Operations Control (NOC).”

According to the Transportation Department, the move aims to incentivize airlines to enhance their resilience and improve overall operations.

It added, “This credit structure allows for the benefits of the airline’s investment to be realized by the public, rather than resulting in a government monetary penalty.”

The DOT statement said, Southwest “agreed to invest the remaining amount due under the fine towards system improvements that directly benefit passengers.”

$140 Million Penalty

During a winter storm in December 2022, Southwest canceled more than 16,000 flights, triggering one of the worst operational meltdowns in US aviation history. In response, the Biden administration imposed a $140 million penalty on the airline in December 2023, the largest fine ever issued to a U.S. carrier.

Most of the penalty required Southwest to upgrade its technology and strengthen operational procedures. As part of the agreement, the airline committed to paying $35 million over three years, split into two $12 million installments and a final $11 million payment.

Southwest also distributed $75 travel vouchers, about $90 million in total, to passengers who faced delays of more than three hours or experienced cancellations during the 2022 meltdown.

Southwest said in a statement that it “is grateful to Secretary Duffy and the DOT Team for recognizing Southwest’s significant investments in modernizing our operations. During the last two years, Southwest successfully completed an operational turnaround that directly benefits our Customers with industry leading on-time performance and percentage of completed flights without cancellations.”