Trump Administration Waives $11 Million Fine for Southwest Airlines

WASHINGTON, Dec. 6 (Reuters) – The Trump administration has waived an $11 million fine against Southwest Airlines associated with the carrier’s significant operational disruptions during the 2022 holiday season. The service meltdown stranded over 2 million passengers and led to nearly 17,000 canceled flights.

The U.S. Department of Transportation (DOT) issued an order on Friday stating that the airline would not be required to pay the remaining part of a fine initially imposed by the Biden administration in late 2023. This decision comes after Southwest made substantial investments, exceeding $1 billion, in upgrading its operations and technology, aimed at improving its service.

In December 2023, the Biden administration fined Southwest as part of a $140 million settlement. This included a $35 million cash penalty and $90 million in travel vouchers for passengers who faced delays of three hours or more due to the airline’s issues. The DOT credited Southwest nearly all but $35 million for its efforts to compensate impacted customers.

“Southwest Airlines is grateful to Secretary Sean Duffy and the DOT Team for recognizing our significant investments,” the airline said in a statement. “In the past two years, we have turned our operations around, leading to industry-leading on-time performance and higher flight completion rates.”

During the severe disruptions, Southwest faced an estimated operational loss of $914 million and paid $600 million in refunds to affected travelers. Factors contributing to the holiday chaos included a winter storm, according to Southwest, but challenges were exacerbated by systemic flaws within the airline’s operation.

The DOT highlighted that easing the financial burden on Southwest was in the public interest, as it encourages airlines to bolster operational resilience, ultimately benefitting travelers.