The U.S. Department of Transportation has agreed to waive the final $11 million installment of penalties owed by Southwest Airlines as part of a record $140 million civil penalty tied to the carrier’s operational collapse during the 2022 holiday travel period.
In an updated order, the DOT said the $11 million payment will be replaced by a credit reflecting Southwest’s $112.4 million investment in its Network Operations Control (NOC) and measurable improvements in on-time performance and flight completion rates. The agency said the credit approach is meant to encourage airlines to invest in resilience and reliability in ways that directly benefit travelers rather than simply sending money to the government.
The $140 million penalty, imposed by the Biden administration in 2023, is the largest civil penalty levied against an airline. It required Southwest to upgrade technology and operations and to provide stronger compensation protections for customers affected by future cancellations or long delays.
Under that settlement, Southwest was also required to send $35 million to the U.S. Treasury in three installments: two payments of $12 million and a final $11 million payment that was due Jan. 31. The DOT’s recent order waives that final $11 million in light of the carrier’s NOC investment and performance gains.
Southwest issued a statement thanking Transportation Secretary Polly Trottenberg Duffy and the DOT for recognizing the airline’s investments, saying the carrier has completed an operational turnaround that has produced industry-leading on-time metrics and fewer cancellations.
The penalty followed a massive disruption during a winter storm in December 2022, when Southwest canceled more than 16,900 flights and left over 2 million passengers stranded. In addition to the DOT action, the airline paid roughly $600 million in refunds and reimbursements to affected customers.