That week, more than 2 million travelers were stranded, and while nearly every airline took some damage from the storm, most recovered within a day or two.

But Southwest? Oh man… things just got bad and worse from there. 📉

Over the course of just 10 days, the airline cancelled nearly 17,000 flights, triggering one of the worst operational collapses in US aviation history. And the root of the problem wasn’t just the weather — it was Southwest’s outdated systems, which many employees had been complaining about for years. But management (naturally) ignored the warnings… until the system collapsed in real time on national television. ⚠️

The financial fallout that followed was brutal.

The very next year, the Biden administration hit Southwest with a record $140 million civil penalty — the largest ever imposed on an airline. (That’s on top of roughly $600 million in refunds to stranded passengers.) So, between fines, refunds, legal costs, and operational disruptions, the meltdown became a nine-figure nightmare.

Fast forward to today, and things have taken a major turn — but for the better.

Southwest has since spent over $1 billion on technology upgrades and operational improvements, including a reported $112.4 million investment into its Network Operations Control systems. According to the Department of Transportation, those upgrades directly improved on-time performance and reduced cancellation rates. ✅

So much so, that in a surprise move, the Trump administration just forgave the final $11 million of the remaining fine that Southwest was scheduled to pay.

Instead of sending that money to the US Treasury, the DOT opted to credit it toward further system improvements — arguing that passengers benefit more from better infrastructure than from another government payment.

Honestly? Smart move and a lesson for any company that thinks cutting costs and being cheap is a smart financial move. 👏

From a financial perspective, this matters massively for Southwest’s future. The company has already absorbed the bulk of the damage, including the initial $35 million paid to the Treasury, the massive customer reimbursements, and the billion-dollar tech overhaul all hit earnings over the past two years.

Wiping the final $11 million liability off the books removes the last reminder of the crisis.

And investors clearly liked what they saw. 📈

Shares of Southwest (LUV) jumped 9.61% on Friday, and stayed green in Monday’s pre-market trading. That signals renewed confidence that the airline’s worst operational chapter is officially closed. ✈️