The U.S. Department of Transportation (DOT) has decided to waive an $11 million fine against Southwest Airlines. This fine was part of a larger $140 million penalty related to the airline's operational failures during the 2022 holiday travel season. The decision was announced this week and is seen as a recognition of the airline's significant investments in improving its operations.

In an updated order, the DOT stated that instead of paying the fine, Southwest will receive an $11 million credit. This credit is intended to reward the airline for its $112.4 million investment in its Network Operations Control (NOC), which has led to improved on-time performance and completion rates. The DOT emphasized that this approach encourages airlines to enhance their operations, ultimately benefiting consumers.

The original $140 million penalty was the largest ever imposed on an airline for consumer protection violations. It was levied after Southwest canceled over 16,900 flights during a severe winter storm in December 2022, stranding more than 2 million passengers. The airline was found to have violated federal law by failing to provide timely customer service, notifications, and refunds during this crisis.

As part of the settlement, Southwest had already agreed to pay a $35 million fine to the U.S. Treasury and provide approximately $90 million in travel vouchers to affected passengers. To date, the airline has paid $24 million of the fine. The remaining $11 million, which was due by January 31, has now been waived.

In a statement, Southwest Airlines expressed gratitude to the DOT for recognizing its efforts to modernize operations. The airline noted that it has successfully completed an operational turnaround over the past two years, resulting in industry-leading on-time performance and a high percentage of completed flights without cancellations.

The DOT's decision reflects a shift in policy under the current administration, which has been more supportive of airlines compared to previous measures that mandated cash compensation for passengers affected by disruptions. The agency stated that the waiver is in the public interest, as it promotes investments in operational improvements that directly benefit consumers.

This development comes amid ongoing discussions about airline consumer protections, with the DOT previously considering rules that would require airlines to compensate passengers for significant disruptions. However, those proposals have since been abandoned under the current administration's approach to airline regulation.