DOT Waives Final $11 Million of Southwest Airlines Penalty After 2022 Meltdown

By Blessing Nweke

The U.S. Department of Transportation (DOT) has waived the final portion of a record civil penalty imposed on Southwest Airlines for its massive operational meltdown during a 2022 winter storm. The decision, announced Friday, eliminates the last $11 million of a $35 million payment Southwest was required to make to the U.S. Treasury under a 2023 settlement.

The total penalty — $140 million — was the largest ever levied against an airline for violating consumer protection laws. Most of that amount went toward compensating travelers affected when Southwest canceled more than 17,000 flights and stranded over 2 million passengers during the December 2022 storm. The chaos escalated when the airline’s crew-rescheduling system failed to keep up with rapidly changing conditions.

Southwest had already paid $24 million of its Treasury obligation, with $12 million installments completed in 2024 and earlier this year. DOT said the remaining balance is being waived because the carrier has made substantial improvements to its operations.

“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,” the agency said. The department noted that the credit structure ensures the public benefits more from Southwest’s operational upgrades than from additional government penalties.

Federal officials previously concluded that Southwest violated consumer protection rules by failing to assist stranded passengers, many of whom were left searching for hotels and alternative flights while customer service lines became unreachable.

Southwest has said the meltdown cost the company more than $1.1 billion in refunds, reimbursements, and lost revenue in the months that followed. In a statement Friday, the airline said it was grateful for the department’s recognition of its improvements.

“During the last two years, Southwest successfully completed an operational turnaround that directly benefits our customers,” the company said.