The U.S. Department of Transportation announced that it will waive a civil fine of $11 million for Southwest Airlines. The airline giant faced a $140 million penalty for its operational collapse during the 2022 holiday season, with $11 million being the final portion of this fine. The incident resulted in the cancellation of nearly 17,000 flights and stranded around 2 million passengers.
Last Friday, the U.S. Department of Transportation issued an order stating that Southwest Airlines is not required to pay the final portion of the hefty fine imposed by the Biden administration on the company.
During the historic operational meltdown, Southwest Airlines experienced a ten-day disruption which led to the cancellation of 17,000 flights from the end of 2022 to the beginning of 2023, accounting for almost half of the airline’s total flights during that busy holiday travel period, affecting millions of passengers’ holiday plans.
Nearly a year after the event, the Biden administration in December 2023 decided to levy a $140 million civil fine on the airline, marking the largest penalty ever imposed on an airline in U.S. history.
While the exact cause of the travel disaster remains unclear, Southwest Airlines CEO Bob Jordan at the time told employees that they “lacked tools” and faced “many operational issues.”
A spokesperson for Southwest Airlines attributed the cancellations and delays of thousands of flights to a winter storm.
The Department of Transportation stated that Southwest Airlines had paid out $600 million in refunds and compensations to passengers affected by the incident.
In the order submitted last Friday, the Trump administration’s Department of Transportation pointed out that Southwest Airlines had invested over $1 billion in upgrading technology and operational systems following the operational collapse, which was the reason for the agency’s decision to waive the remaining fines for the company. Southwest Airlines was supposed to pay the final installment of $11 million next month.
The Department of Transportation stated that waiving this fine would incentivize airlines to invest in improving their operational capabilities and risk resilience, directly benefiting passengers.
“This waiver mechanism ensures that the benefits brought by airlines’ investments can benefit the public, rather than resulting in the government imposing monetary penalties,” the Department of Transportation stated.
Southwest Airlines expressed its gratitude to the Department of Transportation and Transportation Secretary Sean Duffy for their decision.
In a statement released last Saturday, the company said, “Southwest Airlines appreciates Secretary Duffy and the Department of Transportation team for recognizing the significant investments made by Southwest Airlines in modernizing our operations. Over the past two years, Southwest Airlines has successfully completed an operational transformation that has directly benefited our customers through industry-leading on-time performance and zero flight cancellation rates.”