The Trump administration has put a halt to a lawsuit against Southwest Airlines LUV that was initiated by the Biden administration over alleged persistent flight delays.
What Happened: A Southwest spokesperson told Fox Business that the company appreciated the Department of Transportation's decision to drop its lawsuit, adding that they believed it was the correct outcome in this case.
The lawsuit, filed during the final days of the Biden administration, accused Southwest Airlines of “illegally operating multiple chronically delayed flights and disrupting passengers' travel.” The two flights at the heart of the lawsuit were between Chicago Midway International Airport and Oakland, California and Baltimore and Cleveland.
The lawsuit claimed that the flights experienced chronic delays for five consecutive months, affecting 180 passengers between April and August 2022. The Biden administration also accused Southwest Airlines of “unfair, deceptive and anticompetitive” conduct by allegedly providing inaccurate departure and arrival times.
However, a spokesperson for Southwest Airlines told Fox Business that the flights in question took place during the COVID-19 pandemic, a period of unparalleled challenges for the industry.
The Department of Transportation (DOT) now maintains that the lawsuit should never have been filed. “Southwest has remedied the underlying issues and USDOT will work with them fairly, not sue them for political gain,” according to a DOT spokesperson.
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Why It Matters: The lawsuit against Southwest Airlines came at a time when airlines were facing a challenging start to 2025, with concerns centered around consumer behavior, domestic capacity and the effects of reduced government travel.
Southwest Airlines had also reported a volatile first quarter, with an adjusted loss of 13 cents per share, beating analysts' estimate of a loss of 18 cents per share. The lawsuit’s dismissal could provide some relief to the airline, which has been working to improve its operational reliability.
Benzinga's Edge Rankings place Southwest Airlines in the 74th percentile for momentum and the 67th percentile for value, reflecting its strong performance in both areas. Check the detailed report here.
Over the past one month, the shares of Southwest Airlines surged 35.19%.
- READ MORE: Top US Airports See Sharpest Drop In Arrivals As Business, Government And Tourist Travel Decline
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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