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Southwest Airlines cancellations drop after holidays, but costs pile up

Pristine Floyd searches for her friend’s suitcase in the Southwest Airlines baggage drop area at Denver International Airport in Denver, Colorado December 28, 2022.

Michael Ciaguro | Getty Images

Southwest Airlines It stabilized its weekend schedule after about 16,000 cancellations, but a system-wide holiday meltdown could cost hundreds of millions of dollars.

Southwest Airlines has canceled 304 flights, or 2% of its schedule, since Friday. Most of that was on Monday as U.S. airlines faced severe weather and a ground outage in Florida related to an equipment outage at the Federal Aviation Administration. For comparison, between December 21st and December 29th, Southwest Airlines cut operations by about 45%, according to FlightAware. This is a much larger share than any other major airline.

Southwest has two more difficult tasks. Processing refund receipts for thousands of passengers and improving the internal technology that caused the meltdown.

“While we have plans to invest in tools, technology and processes, the lessons learned here and the work to understand how to prevent it from happening again,” said Bob Jordan, CEO of Southwest. It will be done soon,” he said. February’s helmsman told staff on Friday.

Jordan said employees from other departments volunteered to help customers and process refunds.

Bad weather caused problems and affected flights across the United States. However, the Southwest crew struggled to be automatically reassigned after all the changes, forcing them to wait hours at the crew scheduling service. Hundreds of thousands of passengers were affected, and Southwest Airlines is still working on its backlog of misplaced luggage.

The airline canceled about two-thirds of its flights for much of the last week to move crews and planes where needed before returning to near-normal operations on Friday.

The disruption could cost Southwest Airlines $600 million to $700 million, according to estimates by Bank of America airline stock analyst Andrew Didora on Tuesday. It includes both lost revenue and refunds to affected passengers. This could include expenses such as hotels and car rentals.

Didora lowered its fourth-quarter adjusted earnings forecast for Southwest to 37 cents per share from 85 cents.

southwest cadres said last week The cancellation will “certainly” affect Q4 results, but it will take several weeks to process customer refund requests.

Transportation Secretary Pete Buttigieg has vowed to hold Southwest accountable if it fails to provide refunds or refunds to its customers.

Southwest shares fell 3.2% to $32.60 on Tuesday, outperforming rivals. The Dallas-based airline plans to report results on Jan. 26, but may preview the costs of the meltdown before then.

https://www.cnbc.com/2023/01/03/southwest-cancellations-stabilize.html Southwest Airlines cancellations drop after holidays, but costs pile up

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