Southwest Airlines Will NOT Pay Final $11 Million of Record Fine for 2022 Christmas Chaos

Southwest Airlines no longer has to pay an $11 million fine to the U.S. Treasury for a disastrous holiday meltdown over Christmas 2022 that left an estimated two million passengers stranded when the airline lost track of its pilots and flight attendants after days of bad winter weather.

DOT says Southwest should be given credit for improving performance

After a nearly 12-month investigation, the DOT slapped Southwest Airlines with a record $140 million fine for its 2022 Christmas meltdown that resulted in the cancellation of nearly 17,000 flights and left nearly two million passengers stranded for days on end.

However, the DOT now says that Southwest should be given credit for “substantial investments” it has made to improve its operational performance in the last few years, and that it would be more beneficial to the flying public for Southwest to be recognized for the significant improvements it has made.

Specifically, the DOT says it is crediting $11 million because the airline ranked third out of the ten largest U.S. commercial carriers for both on-time performance and completion factor (the percentage of scheduled flights that operated as planned) for the first nine months of 2025.

In a revised consent order published by the DOT late last week, the department noted:

“We believe that these results can be attributed to the investments the carrier has made to improve operational performance and resiliency, particularly its $112.4 million investment.”

$11 million fine was the final installment of record penalty

The DOT fined Southwest Airlines a record-breaking fine of $140 million for its 2022 Holiday meltdown, although the money was divided into different pots:

• $72 million went towards a special passenger compensation fund.
• $33 million was credited towards passenger compensation that the airline had already paid out.
• $35 million was to be paid to the U.S. Treasury.

For the $35 million payment to the U.S. Treasury, Southwest was allowed to pay in instalments. The airline paid $12 million in January 2024, and a further $12 million in January 2025.

The final instalment of $11 million was due to be paid in January 2026, but this amount has now been credited back to Southwest, effectively nullifying that element of the fine.

Two million passengers were stranded during 2022 meltdown

In the run-up to the big Christmas holiday getaway in December 2022, severe winter weather brought chaos to airline operations across the United States. But as the weather started to ease, the situation at Southwest only seemed to grow worse by the day.

Planes, pilots, and flight attendants were out of position, but Southwest couldn’t get its operation back on track because it had lost track of where these resources were.

At one point, Southwest effectively stopped counting how many flights it was canceling because, as it described it, the situation had become so ‘dynamic’ that no one knew whether any given flight was going to take off.

Crew members tried to call the airline to let it know where they were, but the airline was in such disarray that staffers were left on hold for more than eight hours at a time.

It’s estimated that around two million passengers were stranded as Southwest struggled to get its operation back on track.

Southwest Airlines is now boasting about its operational performance

Southwest Airlines is clearly pleased with the results of its multi-million-dollar investment to upgrade the antiquated computer systems that were the root cause of the 2022 Holiday meltdown.

Last month, the Dallas-based carrier even boasted that passengers could rely on it to get them home for the Thanksgiving holiday – a bold claim given the embarrassing events of December 2022.

“We’ll get you home… When it matters most, choose the airline with the lowest cancellation rate in the industry–and count on us to get you home for the holidays,” the airline’s ad boasted.

Other elements of the DOT’s original consent order remain in force, and Southwest must still pay passengers a $75 voucher for any controllable cancellation or delay that causes passengers to reach their destination three or more hours after their scheduled arrival time.

Bottom line

Southwest Airlines is being credited $11 million by the DOT for the massive improvements it has brought to its operational performance in the last few years.

In fairness, the $11 million credit is a mere drop in the ocean compared to the other penalties and investments that Southwest has paid in connection with its 2022 Holiday meltdown.