Southwest Airlines will receive an $11 million credit for the remainder of its record $140 million penalty for widespread operational issues during the busy 2022 holiday travel season, the U.S. Department of Transportation announced in an updated order shared this week.
“Southwest made one $12 million payment on February 5, 2024, and a second $12 million payment on January 31, 2025,” the DOT order states. The remaining $11 million is due and payable to the U.S. Treasury no later than January 31, 2026. In lieu of a payment of an $11 million civil penalty to the government, this order provides Southwest with an $11 million credit for significantly improving its on-time performance and completion factor1 through its $112.4 million investment in its Network Operations Control (NOC).
The DOT said it believes its decision to credit Southwest “incentivizes airlines to invest in improving their operations and resiliency, which benefits consumers directly.”
“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,” the order added.
Southwest Airlines issued a statement to ABC News confirming it had “agreed to invest the remaining amount due under the fine towards system improvements that directly benefit passengers.”
“This is a better solution than sending the money to the U.S Treasury because the benefits will go to the traveling public. This order does not impact customer refunds,” the statement added.
Southwest Airlines received a $140 million civilian penalty from former President Joe Biden‘s administration in 2023, which was the largest fine against an airline in history, requiring it to upgrade its technology and procedures amid widespread travel issues during the 2022 holiday travel season. The airline said it “is grateful to Secretary Duffy and the DOT Team for recognizing Southwest’s significant investments in modernizing our operations” in its statement to ABC News.
“During the last two years, Southwest successfully completed an operational turnaround that directly benefits our Customers with industry leading on-time performance and percentage of completed flights without cancellations,” the statement reads.
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