The U.S. Transportation Department announced it would waive an $11 million fine against Southwest Airlines, originally imposed for the airline’s widespread holiday meltdown in December 2022.
The waiver is part of a broader $140 million settlement, which included a $35 million cash fine and $90 million in travel vouchers for affected passengers, agreed to by Southwest in December 2023.
Driving the news: The meltdown stranded over two million passengers due to airline-caused cancellations and delays during one of the busiest travel periods.
- Eligible passengers, whose trips were delayed by three or more hours, receive $75 or more in travel vouchers over a three-year period.
The big picture: The Transportation Department cited Southwest’s post-meltdown investment of over $1 billion in its operations as the reason for waiving the remaining penalty, calling it a move that encourages airlines to improve operational resiliency and thereby benefits consumers.
- Southwest credited its turnaround efforts for achieving industry-leading on-time performance and reduced cancellations after the disruptions.
Go deeper: Under President Trump, the USDOT has rolled back several consumer protection measures initially announced during President Biden’s administration.
- In late 2024, USDOT solicited public feedback on rules for mandatory cash compensation for flight disruptions, but later abandoned the proposal.
- In May, USDOT dropped a separate Biden-era lawsuit against Southwest accusing the carrier of chronically delayed flights, which Southwest argued were mostly outside its control and tied to pandemic-era challenges.
