Southwest Airlines received an early Christmas gift from the United States Department of Transportation last week. In a new order issued Thursday, the DOT announced it was waiving the remaining $11 million in fines levied against the budget air carrier following its operational unraveling during the 2022 holiday season.
Southwest was originally fined a record $140 million by the Biden Administration in 2023, with $35 million of that to be paid to the U.S. Treasury in three installments. The final $11 million payment is what the DOT canceled.
Southwest gets credit for good behavior
Southwest paid $12 million to the Treasury on Feb. 5, 2024 and another $12 million on Jan. 31, 2025. In its announcement, the Department of Transportation waived the last installment, due Jan. 31, 2026, instead providing Southwest “with an $11 million credit for significantly improving its on-time performance and completion factor1 through its $112.4 million investment in its Network Operations Control (NOC).”
The DOT believes handling the matter in this way will benefit the general public because it “incentivizes airlines to invest in improving their operations and resiliency, which benefits consumers directly.”
In addition to the $35 million it was ordered to pay the U.S. Treasury, Southwest was also required to put $72 million toward its special passenger compensation fund and $33 million towards passenger compensation the airline had already paid out.
Southwest ‘grateful’ for DOT actions
The 2022 Southwest holiday meltdown occurred from Dec. 21-30 during the peak of holiday traveling. During that time, the carrier canceled over 16,900 flights and stranded more than two million passengers, largely due to failures in the company’s antiquated technology system.
In a new statement, Southwest Airlines said it is “is grateful to Secretary [Sean] Duffy and the DOT Team” for acknowledging their “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,” the statement said.
