U.S. Waives $11 Million Fine for Southwest Airlines Over 2022 Travel Meltdown

Southwest​‍​‌‍​‍‌​‍​‌‍​‍‌ Airlines will not be required to pay the last installment of $11 million of a total of $140 million in fines imposed after its severe travel meltdown during the 2022 holiday period. The Department of Transportation (DOT) made the decision to waive the fine this week.

The original fine was imposed after more than 17,000 flight cancellations during the holiday period, an event that caused over 2 million passengers to be stranded. It is still the largest penalty ever imposed by the U.S. on an airline for consumer-protection violations.

The department of transportation justified the waiver as a reward for Southwest’s considerable contributions to the overhaul of its operations. The airline funneled $112.4 million into its Network Operations Control (NOC) system and has greatly improved its on-time performance and completion rates since the disaster.

Rather than a cash payment, the department of transportation gave Southwest an $11 million credit, thereby relieving the airline of its final payment of the fine. This was based on the grounds that the airline’s improvements are more beneficial to customers than a payment to punish them would be.

Southwest’s statement on the decision was positive, describing the operational changes as a return of reliability and better service of their customers. On the other hand, critics argue that the waiver of the fine negates the presence of accountability after one of the most disruptive airline failures in the U.S. history.

It’s interesting to note that this waiver represents a major change in the way the regulators treat such failures. It certainly raises the question of whether there should still be punitive measures or whether the focus should be on incentivizing corporate investment to prevent future ​‍​‌‍​‍‌​‍​‌‍​‍‌disruptions.