The Trump administration has let Southwest Airlines off the hook for paying the remainder of a fine for the airline’s 2022 holiday travel meltdown – a service disruption that left more than 2 million passengers stranded.
An order by the Department of Transportation issued late Friday said Southwest would not have to pay the last $11 million installment of the $140 million fine leveled against the airline by the Biden administration in 2023.
Southwest’s historic, 10-day schedule meltdown, resulted in 17,000 canceled flights over the very end of 2022 and start of 2023. The cancellations made up nearly half of the airline’s flight schedule during the buzzing holiday season.
While the exact cause of the travel catastrophe is unclear, Southwest’s CEO, Bob Jordan, told employees they were “suffering from a lack of tools” along with “a lot of issues in the operation” at the time.
Pete Buttigieg, the former transportation secretary said, “Their system really has completely melted down,” after speaking with Jordan.
A spokesperson for the airline blamed a winter storm for the thousands of canceled and delayed flights.
Nevertheless, no reason was enough to atone for the ruined holiday plans of the millions of passengers. Southwest paid $600 million in refunds and reimbursements to passengers who were affected by the travel nightmare, the transportation department said at the time.
Piling on customer compensation, the airline faced additional labor costs and lost revenue that continued into February. On an after-tax basis, it reported the service meltdown cost $914 million.
The $140 million fine from the federal government followed almost a year after the holiday meltdown.
The fine was set to create a new $90 million fund to compensate “future Southwest passengers affected by cancellations or significant delays caused by the airline,” and $35 million was to be paid to the US Treasury, according to the transportation department.
The last installment was due by the end of January, before the Trump administration extended the $11 million waiver.
The department says it made its decision because Southwest has made worthwhile investments in its operations control center and “the Department is of the view that it is more beneficial for the flying public to give Southwest credit for significantly improving its on-time performance and completion factor.”
In a statement, Southwest Airlines said it is “grateful to Secretary Duffy and the DOT Team for recognizing Southwest’s significant investments in modernizing our operations.”
“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 airline said.
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