Trump Administration eliminates $11 million fine Southwest inherited from Biden era
The decision amends the 2023 directive, recognizes the airline's multi-million dollar investments, and gives up other amounts through passenger compensation.
Southwest Airlines plane
The Department of Transportation (DOT) decided to vacate an $11 million fine that Southwest Airlines still owed to the Treasury. That amount was part of the $140 million penalty imposed in 2023 after the airline collapsed operationally during winter storms.
The original directive stated that $35 million was to be paid directly to the government in three installments. Southwest complied with the first two, paying 12 million in February 2024 and another 12 million in January 2025, but the DOT determined that the last installment of 11 million could be waived after verifying sustained improvements in on-time performance and the percentage of flights completed without cancellations.
A turnaround from the previous regulatory approach
DOT also detailed how the remainder of the penalty is reorganized. Of the $105 million that remained in effect, a portion will be satisfied by providing $90 million in passenger vouchers between April 2024 and April 2027. The millions equivalent to that compensation - $72 million according to the order - will no longer be collected as a penalty. In addition, another 33 million had already been credited previously, after the company awarded 25,000 Rapid Rewards points to passengers affected by the 2022 outages.
Facts supporting the decision
Southwest said in a statement that it thanked Secretary of Transportation Sean Duffy and the DOT team for recognizing the improvements implemented and said it completed an operational turnaround that directly benefits passengers.
A change from actions taken under the previous Administration
The decision comes a few months after the Department of Justice dismissed a lawsuit that had been pushed by the DOT under former Secretary Pete Buttigieg. That lawsuit accused Southwest of publishing flight schedules it could not meet during chronic delays in 2022.
With the elimination of the latest fine payment and the dismissal of that lawsuit, Southwest closes a period of heavy regulatory challenges and gets formal recognition for the improvements it says it implemented in the wake of the crisis.
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