The United States Department of Transportation (DoT) has waived the last installment of a fine it imposed on Southwest Airlines following the serious operational disruption the airline experienced during the 2022 Christmas Holiday period.
In a notice it posted on its website on December 5, 2025, the DoT explains that Southwest Airlines will not have to disburse the $11 million tranche of this penalty, which was due for payment before January 31, 2026.
The decision, the DoT ruling states, is based on the fact that since the moment the fine was imposed, the airline has been able to improve significantly its on-time performance and completion factor and it has invested $112.4 million in upgrading its Network Operations Control (NOC) systems.
On December 21, 2022, adverse weather conditions combined with technical and operational failures to force Southwest Airlines to cancel thousands of flights across the United States during one of the busiest travel periods of the year. It took more than a week for the carrier to restore operations to normal, leaving over two million passengers stranded along the way.
As a result of this, the DoT hit Southwest Airlines with a $140 million civil penalty and it also required Southwest to pay a $35 million fine to the U.S. Treasury in three installments. The first two of these, worth $12 million each, were paid by Southwest Airlines on February 5, 2024, and January 31, 2025, respectively.
The DoT, therefore, expects that by waiving the penalty it will provide airlines with the right incentives to continue investing in their operational resiliency, with the subsequent benefit to the public.
Southwest Airlines is currently immersed in an internal transformation process which has seen it implement significant changes in its business and operational model. These changes were prompted by the purchase of a large equity stake in the airline by Elliott Management, an activist fund which has been very critical of the airline’s previous management.