Southwest Airlines Hit With Record $140M DOT Fine, Consumer Protection Violations Highlighted
Portfolio Pulse from Akanksha Bakshi
Southwest Airlines Company (NYSE:LUV) has been fined a record $140 million by the U.S. Department of Transportation for consumer protection violations during the 2022 holiday season. The fine is 30 times larger than any previous DOT penalty for such violations. Southwest's operational issues led to 16,900 flight cancellations and over two million stranded passengers. The airline has already provided over $600 million in refunds and reimbursements and is now required to set up a $90 million compensation fund for future incidents. The total financial impact exceeds $750 million. LUV shares dropped 0.38% in premarket trading.
December 18, 2023 | 2:03 pm
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Southwest Airlines has been fined $140 million by the DOT for consumer protection violations, with a total financial impact exceeding $750 million. The company's shares have fallen slightly in premarket trading.
The record fine and the significant financial impact due to consumer protection violations are likely to negatively affect investor sentiment and the stock price of Southwest Airlines in the short term. The premarket trading already shows a slight decline in share price, indicating immediate investor reaction to the news.
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