Southwest Airlines’ The holiday slump will “definitely” impact its fourth-quarter results, executives said Thursday, adding that working through reimbursement requests from affected travelers would take several weeks.
The chaos of the entire system stranded hundreds of thousands of customers over the holiday week and drew scrutiny from Washington.
The low-cost airline has reduced schedules over the past several days, flying about one-third of its planned flights, in a bid to stabilize its operations and get planes and crew where they need to go. Desperately tried
Southwest said it expects to operate a normal schedule on Friday. According to FlightAware, 39 flights scheduled for Friday have been canceled, down from more than 2,300 on Thursday.
CEO Bob Jordan said in a staff memo Thursday, “We have all hands on deck and tested solutions to support restored operations. I am confident, but I am also cautious.”
Passengers at Baltimore Washington International Airport deal with the effects of Southwest Airlines canceling more than 12,000 flights in and around the country over the Christmas holiday weekend on December 27, 2022 in Baltimore, Maryland.
Michael McCoy | reuters
The airline will resume ticket sales for Friday after stabilizing its schedule before it implements it, said Jordan, a Southwest veteran of more than three decades. became CEO in February.
Southwest’s operations ended after the holiday week Brutal winter weather sweeps across America When most airlines recovered late last week, Southwest’s problems only got worse. Executives cited challenges including an overloaded internal scheduling platform critical to matching crews with flights.
Officials vowed on Thursday to improve the crew scheduling platform, saying modernization efforts were already underway but such projects take years.
On a call with reporters Thursday, chief commercial officer Ryan Green said that “will definitely have an impact on the fourth quarter.”
But officials declined to estimate the total loss to the airline from the disruptions. The carrier said last year that a similar incident in October 2021 had caused the airline to lose about $75 million, but the incident was prolonged, with more passengers flying because of holidays and increasingly high fares.
The carrier previously said it expected quarterly revenue to rise 17% over 2019, when it brought in close to $6 billion.
‘Not much love’
Southwest faces significant customer service challenges in reimbursing passengers for costs related to canceled flights. Some passengers also bear other expenses such as replacement of toiletries and other essential items in addition to hotel and food.
Jack Lyons, a 34-year-old teacher who had planned to fly Southwest on Christmas Day, canceled his trip to Boston after several flight changes would have cut his holiday in half. Leon had to return to the airport on Thursday, four days after his trip was derailed, to secure reimbursement for his return flight after being unable to reach customer service via phone, email or online form.
“A company that talks about love and has hearts as their graphic didn’t have much love on Christmas day,” Leone said.
In an effort to woo its most loyal customers, Southwest said Thursday it would extend the qualification period for elite status that comes with perks such as free Wi-Fi, early boarding and, in some cases, a companion pass. Is.
Suzy Chism, a 33-year-old recording artist from Nashville, Tennessee, told CNBC that her Dec. 26 Southwest flight from Las Vegas was canceled, causing her to miss a week of work and her final concert performance of the year.
“My two-night trip suddenly became a week long,” Chism said. “The loss of income is crushing.”
Chism said she was able to book a new flight marginal for Friday night.
“I just don’t count on Southwest to get me there,” she said.
some contestants said they would Cap fares for some cities to help stranded Southwest travelers reach their destinations without increasing prices, but fare searches Thursday still returned some one-way flights for $600 or more.
The move came after Transportation Secretary Pete Buttigieg urged carriers to limit fares.
In a letter to Southwest’s CEO on Thursday, Buttigieg said he would hold Southwest accountable if it doesn’t immediately refund passengers for canceled flights, reimburse them for expenses and return lost bags.
Buttigieg wrote, “No amount of financial compensation can make up for those travelers who miss moments with their families they can never get back – Christmas, birthdays, weddings and more.” special event.” “That’s why it’s so important for Southwest to start by reimbursing travelers for costs that can be measured in dollars and cents.”
Buttigieg told NBC Nightly News that the Department of Transportation would put Southwest “under a microscope” and impose fines if necessary for passengers to correct the airline.
Several MPs also said they would look into what caused the South-West’s outdoor problems over the past week.
Shares of Southwest gained nearly 4% on Thursday, but the stock is still down more than 7% this week at $33 per share. CFRA Research earlier on Thursday cut its 12-month price target for Southwest to $41 from $47. Maintained strong buy rating on the stock,
CFRA analyst Colin Scarola wrote, “History shows that customers don’t permanently leave an airline, even after a terrible experience, because of the commodity-like nature of the product.”
Not all customers agree.
Alex Kane, 37, was scheduled to fly on Christmas Eve from Denver to Seattle, one of the airports most affected by the disruptions. Instead, after Cain’s flight was canceled at 2 a.m., he and his girlfriend drove 18 hours in a rental car to an airport in Redmond, Oregon, where they had a Alaska Airlines flight home.
At the very least, the couple plans to request reimbursement for the hotel, rental car, gas and Alaska Airlines flight. Ken estimated the total cost at $3,000.
“We don’t have any funds to fly Southwest again,” Cain told CNBC.