Government reduces a portion of the Biden-era penalty imposed on Southwest Airlines.
Written by Emily J. Thompson, Senior Investment Analyst
Source: Yahoo Finance
Updated: 11 hour ago0mins
Southwest Airlines Fine Waived: The U.S. Department of Transportation has waived the final $11 million payment of a $140 million fine against Southwest Airlines, originally imposed for canceling thousands of flights during a winter storm in December 2022.
Settlement Details: Under a 2023 settlement, most of the fine was allocated for traveler compensation, while Southwest paid $35 million to the U.S. Treasury, including two $12 million payments made in 2024 and 2025.
Improvements Acknowledged: The Transportation Department credited Southwest for enhancing its on-time performance and investing in network operations, stating that this approach benefits consumers by incentivizing airlines to improve their services.
Impact of the Flight Cancellations: The December 2022 storm led to the cancellation of 17,000 flights, stranding over 2 million travelers and costing Southwest more than $1.1 billion in refunds, reimbursements, and lost ticket sales.
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Analyst Views on LUV
Wall Street analysts forecast LUV stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for LUV is 34.00 USD with a low forecast of 28.00 USD and a high forecast of 42.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
2 Buy
7 Hold
2 Sell
Hold
Current: 35.810
Low
28.00
Averages
34.00
High
42.00
Current: 35.810
Low
28.00
Averages
34.00
High
42.00
Citi
Neutral
initiated
$38
2025-12-04
New
Reason
Citi
Price Target
$38
2025-12-04
New
initiated
Neutral
Reason
Citi initiated coverage of Southwest with a Neutral rating and $38 price target. The firm believes the setup is positive for the airlines with an "elongated mid-cycle" beginning in 2026. Citi sees the largest beneficiaries as being the "supermajors." The large airlines offer the most favorable risk/reward, the analyst tells investors in a research note. On the other side, Citi believes the legacy low-cost carriers will be underperformers through the cycle.
Bernstein
Market Perform
maintain
$31 -> $34
2025-11-20
Reason
Bernstein
Price Target
$31 -> $34
2025-11-20
maintain
Market Perform
Reason
Bernstein raised the firm's price target on Southwest to $34 from $31 and keeps a Market Perform rating on the shares. The firm is updating estimates for the U.S. airlines group coming out of Q3 earnings and adding in slight earnings hit isolated to Q4 due to the government shutdown. Bernstein lands about in line with consensus for Q4 for all names but Southwest, which it continues to believe has meaningful risk stemming from its business model changes and optimistic targets.
UBS
Neutral
downgrade
$35 -> $33
2025-10-24
Reason
UBS
Price Target
$35 -> $33
2025-10-24
downgrade
Neutral
Reason
UBS lowered the firm's price target on Southwest to $33 from $35 and keeps a Neutral rating on the shares.
JPMorgan
Underweight
maintain
$35 -> $36
2025-10-24
Reason
JPMorgan
Price Target
$35 -> $36
2025-10-24
maintain
Underweight
Reason
JPMorgan raised the firm's price target on Southwest to $36 from $35 and keeps an Underweight rating on the shares.
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About LUV
Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company's fare products include four categories: Wanna Get Away, Wanna Get Away Plus, Anytime, and Business Select to provide customers options when choosing a fare. It also offers ancillary services, such as EarlyBird Check-In, Upgraded Boarding, and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies. Its Rapid Rewards loyalty program enables program members to earn points for every dollar spent on Southwest base fares, also including purchases paid with LUV Vouchers, gift cards, or flight credit, with no portion of the purchase price paid with Rapid Rewards points. It operates over 803 Boeing 737 aircraft in its fleet and serves 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries.
About the author
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Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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