The U.S. Department of Transportation (DOT) has waived the final $11 million payment of Southwest Airlines’ $140 million penalty for the December 2022 holiday travel crisis.
The decision, announced Friday, credits the airline’s operational improvements and investment in network operations. Southwest had already paid $24 million of the $35 million owed to the U.S. Treasury, with the final payment originally due January 31, 2026.
A Southwest spokesperson told Newsweek on Sunday the airline is “grateful to Secretary Duffy and the DOT Team for recognizing Southwest’s significant investments in modernizing our operations.”
Why It Matters
The original $140 million settlement represented the largest penalty ever imposed on an airline for consumer protection violations, stemming from one of the most severe operational failures in U.S. aviation history.
The December 2022 meltdown stranded more than 2 million travelers during the holiday season caused by winter storm Elliott, with some passengers trapped in airports for days while Southwest’s overwhelmed customer service system left many unable to reach the airline for rebooking assistance.
The collapse prompted then-Transportation Secretary Pete Buttigieg to launch a federal investigation, determining the crisis had “clearly crossed the line from what is an uncontrollable weather situation to something that is the airline’s direct responsibility.”
What To Know
The penalty stemmed from Southwest’s operational collapse during a winter storm in December 2022, which paralyzed operations in Denver and Chicago. The airline’s crew-rescheduling system couldn’t handle the cascading disruptions, ultimately forcing Southwest to cancel 17,000 flights and strand more than 2 million travelers.
Former President Joe Biden administration’s determined Southwest violated federal law by failing to assist stranded customers. Many passengers encountered busy signals or spent hours on hold with the overwhelmed customer service center, while others struggled to rebook flights or locate missing luggage. At the time, CEO Bob Jordan apologized for the chaos, explaining that aircraft and flight crews were “out of position” across the airline’s extensive network.
Under the 2023 settlement, most of the $140 million went toward direct compensation for affected travelers. The airline reported the meltdown cost more than $1.1 billion in refunds, reimbursements, additional operational expenses, and lost ticket sales over several months.
The Southwest Airlines Pilots Association had warned management about system vulnerabilities prior to the collapse. Captain Mike Santoro, the union’s vice president, called it “the largest disruption” he had seen in 16 years at the airline.
Since the winter meltdown, Southwest has significantly improved its on-time performance and invested in network infrastructure to prevent similar disruptions.
What People Are Saying
Department of Transportation’s statement following the announcement: “DOT believes that this approach is in the public interest as it incentivizes airlines to invest in improving their operations and resiliency, which benefits consumers directly. 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.”
Southwest Airlines spokesperson told Newsweek on Sunday: “Southwest Airlines 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.”
What Happens Next?
Southwest’s performance metrics and continued operational investments will remain under federal scrutiny to ensure sustained improvements for passengers.
