Southwest will not have to pay the final $11 million installment of a penalty it received for wide-scale operational disruptions during the holiday travel season three years ago.
In a recent order, the U.S. Department of Transportation said it is providing Southwest with an $11 million credit in lieu of the payment “for significantly improving its on-time performance and completion factor” through a $112.4 million investment in its network operations control.
“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 order states. “This credit structure allows for the benefits of the airline’s investment to be realized by the public, rather than resulting in a government monetary penalty.”
Southwest canceled thousands of scheduled flights in December 2022 due to a massive technology failure. The outage coincided with a major winter storm that impacted much of the Midwest and East Coast and further hampered holiday travel. The news media, and later the DOT, dubbed the event a “meltdown.”
The federal government fined Southwest $140 million over the fiasco, with $35 million due to the U.S. Department of the Treasury. The carrier paid $12 million toward the penalty in February 2024 and another $12 million in January of this year, leaving $11 million outstanding until the DOT’s recent decision.
Transportation officials said Southwest has invested over $1 billion in its operations to improve performance and reliability since the winter of 2022.
