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U.S. Waives $11 Million of Southwest’s $140 Million Settlement After Airline Boosts Operations

U.S. Waives $11 Million of Southwest’s $140 Million Settlement After Airline Boosts Operations

The U.S. Department of Transportation has waived an outstanding $11 million portion of a $140 million settlement with Southwest Airlines tied to the carrier’s December 2022 holiday operational collapse. The December 2023 agreement required $35 million in cash paid over roughly three years and $90 million in travel vouchers for passengers delayed three hours or more. The DOT cited Southwest’s investment of more than $1 billion to improve operations and reliability as the rationale for waiving the remaining fine.

U.S. Department of Transportation Waives $11 Million Over 2022 Holiday Meltdown

The U.S. Department of Transportation said it will waive an outstanding $11 million portion of a $140 million settlement with Southwest Airlines that stemmed from the carrier’s operational collapse during the December 2022 holiday travel period.

Under the larger agreement reached in December 2023, Southwest agreed to a combination of cash payments and customer relief: $35 million in cash to be paid over just more than three years and $90 million in travel vouchers. Vouchers are worth at least $75 each and apply to passengers who were delayed three hours or more in reaching their final destinations due to airline-caused cancellations or operational issues. The December 2022 disruption stranded more than 2 million travelers.

In a written order, the Department said the decision to waive the remaining $11 million — which had been due by the end of January — was based on Southwest’s subsequent investments of more than $1 billion to strengthen its operations and improve on-time performance and reliability since the meltdown.

The waiver effectively reduces the remaining cash obligation while recognizing the airline’s significant operational investments. The DOT statement framed the move as balancing enforcement with incentives for carriers to invest in reliability and passenger service.

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