Southwest Airlines: $140 Million U.S. Department of Transportation Fine Immaterial to $19 Valuation

The U.S. Department of Transportation levied a $140 million fine against Southwest Airlines, citing insufficient customer support in the wake of the airline's massive wave of canceled flights in the holiday travel rush of 2022. While the amount for such a fine is a new record for the U.S. DOT against an airline, on top of more than $600 million of customer reimbursements and other costs the airline has already incurred, it has almost no effect on our fair value estimate, which remains $19.