US NEWS: The U.S. Department of Transportation has officially forgiven the final $11 million installment of a civil penalty against Southwest Airlines, closing the book on the massive operational failure that disrupted holiday travel for millions of Americans three years ago.
The penalty stemmed from the December 2022 meltdown that forced Southwest to cancel almost 17,000 flights over the Christmas and New Year period, stranding roughly two million passengers nationwide. Transportation officials determined that outdated crew scheduling software and inadequate recovery procedures turned a severe winter storm into a week long crisis unique to Southwest among major carriers.
In one of the largest consumer protection actions in aviation history, the Biden administration Transportation Department announced a $140 million civil penalty against the Dallas based airline in December 2023. After giving Southwest credit for more than $600 million in refunds, frequent flyer miles, and direct payments already provided to affected customers, the remaining cash obligation was reduced to $35 million, payable in installments.
On Friday, Transportation Secretary Sean Duffy signed an order granting the airline full credit for the outstanding balance, citing substantial improvements made since the incident. Department officials highlighted Southwest’s investments exceeding $1 billion in new technology, winter operations planning, and system reliability upgrades as evidence that the carrier has addressed the root causes of the 2022 failure.
Southwest issued a statement Saturday expressing gratitude to Secretary Duffy and the Transportation Department team for acknowledging the company’s turnaround efforts. The airline emphasized that it has achieved industry leading on time performance and the lowest flight cancellation rate among major U.S. carriers over the past two years.
The final payment under the original agreement had been scheduled for next month. With Friday’s decision, Southwest will make no additional cash payments to the government related to the 2022 operational collapse.