The U.S. Department of Transportation (DOT) has waived the final $11 million of a record civil penalty previously imposed on Southwest Airlines for its 2022 holiday meltdown, citing the carrier’s significant operational improvements and investments in system upgrades.
Under a 2023 enforcement action, Southwest was assessed a $140 million penalty for widespread customer-service failures during Winter Storm Elliott, which triggered the cancellation of 17,000 flights and stranded more than 2 million travelers. The airline was required to pay $35 million of that penalty to the U.S. Treasury in three installments — two payments of $12 million and one payment of $11 million.
Southwest made its first $12 million payment in February 2024 and a second $12 million payment in January 2025. DOT announced Friday that it will not require the remaining $11 million installment, originally due January 31, 2026, after determining the airline earned credit for extensive operational reforms.
According to the amended consent order, DOT concluded Southwest had significantly improved its on-time performance and completion factor through a documented $112.4 million investment in its Network Operations Control (NOC). Those upgrades included gate-optimization tools, enhanced flight-planning systems, a modernized movement-control platform, and new optimizers designed to accelerate aircraft and crew recovery during disruptions.
DOT said the investments led to measurable results. Southwest ranked third among the nation’s 10 largest carriers in both on-time performance and completion factor during the first nine months of 2025 — a substantial improvement over its 2022 rankings of sixth and eighth, respectively.
“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 agency said. “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.”
Federal officials noted Southwest has invested more than $1 billion overall in operational upgrades since the 2022 collapse. Those improvements span crew operations, ground operations, technical systems, customer-service functions, and the NOC.
Southwest said it was grateful for the department’s decision and credited its modernization program for stabilizing its operation.
Southwest, in a statement provided to the Associated Press, said, “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.”
Southwest also thanked Transportation Secretary Sean Duffy for recognizing its investments in system reliability.
Despite the waiver, DOT emphasized that Southwest remains formally assessed the full $140 million civil penalty and must continue complying with all consumer-protection obligations established under the earlier order.
