By David Shepardson
WASHINGTON, Dec 6 (Reuters) - The Trump administration said Saturday it will waive an $11 million fine imposed on Southwest Airlines as part of a $140 million settlement over the carrier's meltdown in December 2022 during a busy holiday travel period.
Southwest in December 2023 agreed to pay a $35 million cash fine and provide $90 million over three years in travel vouchers of $75 or more to passengers delayed at least three hours getting to final destinations because of an airline-caused
issue or cancellation over the airline's handling of the meltdown that stranded more than 2 million passengers.
The U.S. Transportation Department in a written order cited Southwest's decision to invest over $1 billion in its operations since the 2022 meltdown in its decision to waiver the remaining $11 million of the fine imposed by the administration of President Joe Biden that was due by the end of January.
USDOT said this approach was in the public interest "as it incentivizes airlines to invest in improving their operations and resiliency, which benefits consumers directly."
Southwest praised the decision, saying over last two years, it successfully completed an operational turnaround that resulted in "industry leading on-time performance and percentage of completed flights without cancellations."
Under U.S. President Donald Trump, USDOT has been moving to roll back some aviation consumer protection initiatives announced by the Biden administration.
In December 2024 under Biden, USDOT sought public comment on writing rules to require airlines to pay cash compensation to passengers when flight disruptions are caused by carriers - a move the department has since said it would abandon.
In May, USDOT dropped a lawsuit filed by the Biden administration in its final days that accused Southwest of illegally operating chronically delayed flights.
Southwest had rejected those claims, saying the flights occurred years earlier when the industry faced unprecedented challenges from the COVID-19 pandemic and were often delayed due to issues outside Southwest’s control.
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Deepa Babington)
