Washington, United States: The U.S. Department of Transportation (DOT) is rolling back aggressive enforcement of consumer-protection penalties against airlines, offering a reprieve on steep fines and signaling a broader shift in regulatory philosophy under the Biden and Trump administrations.
In a regulatory notice and enforcement restructuring published Tuesday, the department outlined changes that will reduce its reliance on large civil penalties and focus instead on compliance cooperation and operational improvements by carriers. The moves effectively soften the industry’s exposure to historically high fines tied to consumer protection violations.
A notable early example of the new approach is the waiver of a remaining $11 million civil penalty owed by Southwest Airlines for its handling of an operational meltdown during the December 2022 holiday travel period. The airline had been ordered to pay the amount by Jan. 31, 2026, as part of a broader $140 million settlement related to violations of U.S. consumer-protection rules following widespread cancellations and delays that stranded millions of travelers.
DOT officials said the waiver reflects substantial investments Southwest has made in improving its network operations, scheduling systems and overall reliability since the incident. By crediting more than $112 million in operational upgrades and performance enhancements, the agency concluded that incentivizing proactive service improvements would deliver greater benefits to air travelers than imposing the final cash penalty.
“The Department believes this approach is in the public interest as it incentivizes airlines to invest in improving their operations and resiliency, which benefits consumers directly,” according to the order.
The change comes at a time when DOT leadership is revising enforcement procedures for the Office of Aviation Consumer Protection (OACP), the unit responsible for investigating and penalizing airlines for consumer-rights violations. Under the updated framework published in the Federal Register, the office will emphasize compliance assistance, warning letters and negotiated settlements rather than immediate financial penalties where appropriate.
The regulatory filing states that enforcement actions will be grounded in clear statutory authority, with monetary penalties applied only where the law explicitly grants that authority. The department said the modifications aim to help airlines meet their obligations while creating a culture of compliance, rather than relying solely on punitive measures.
Industry analysts said the shift reflects a broader deregulatory agenda that has emerged as the current administration reconsiders several consumer protection initiatives advanced over the past several years. During the Biden administration, DOT had significantly expanded passenger rights, including rules requiring automatic refunds for cancelled or significantly changed flights and stronger disclosure of airline fees.
The proposed approach also aligns with a recent move to withdraw a Biden-era regulation that would have mandated cash compensation to passengers for delays and cancellations, and to scale back requirements for amenities such as meals and hotel accommodations when flights are disrupted.
